Chasing the Points

Peter : On Rad's Radar?
Peter
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

Chasing the Points

Sometimes being an agent is embarrassing. There's the whole discussion on Phone+ about Ethics in the Channel. When I first got in the channel in 1999, I wouldn't do business in Miami, because you had to buy the business. Agents would pay up to 90% of the commissions back to the customer (or the customer's wife) to get the business. 

Then there's the whole: I'm going with whoever gives me the most points. (I have blogged about something similar before). An agent today asked me for a VoIP provider. The question was not: What hosted VoIP provider would you want to work with? Nor was it: I am looking to work with a VoIP provider that is reliable and dependable. Who would you recommend? The question boiled down to who was paying the best commissions.

To me, that's dumb. I have been in the VoIP sector since 2004. (I was a beta tester for Primus' Lingo service). I have seen so many companies disappear. POOF! A cloud of smoke. 

There was a Tampa-based CLEC that offered exclusive agent contracts paying 22%. No agent I know ever collected. 

With all the channel changes and financial troubles of this industry, do you really think a sweetheart deal (20% with evergreen) is actually going to be met? 

I understand that SIP has more margin than TDM, but the truth is that VoIP has the same basic costs as TDM: LNP, 911, CNAM, SS7, softswitch, collocation, labor/payroll/benefits, taxes, trunking, bandwidth, equipment leasing, and origination and termination charges. So thinking that there is margin left for 20% to an agent - unless the agent was going to be doing marketing, sales and implementation - in which case they earned every penny. And that is a Partnership with a capital P. 

I have been complaining since 2006 about the fact that Partner is a misused word in the channel. I look for a win-win every time. I look at lifetime value of my client. I want referrals. I want my vendors to be healthy financially. 

Commission points is not what comes to mind when I'm thinking partner. In VoIP, especially in Hosted PBX sales, the onboarding process is the most important. By that I mean, the cut-over; the number porting; the extension mapping; and the whole provisioning and installation process. This is the customer's first experience with the carrier (and the agent maybe). It needs to be well handled and smooth. It requires project management. It demands frequent communication among the carrier, agent and client. This is way more important than an extra few points. Because the on-boarding experience predicates whether or not you get WOM (word-of-mouth) or referrals. (You can't blame it all on the carrier -- it's your recommendation). 

Well, those are my thoughts any way. What are yours? Leave a comment.

By the way, the TCA is finalizing a Code of Ethics for Channel Partners. Feedback would be greatly appreciated.


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