Is this a Master Agent Dilemma?

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

Is this a Master Agent Dilemma?

From the carrier side, Channel executives are looking to the VAR space for growth? Why is that? Has the Agent contribution to channel revenue hit a plateau?

At dinner last night, I was talking about the magic number of a tribe. For consultants, it's 100. For an ISP, it's 1000 - when they get to 2000 customers they are comfortable and profitable. IF that magic number is a good customer -- that is, one that values your services, pays a rate that affords a profit, and stays with you.

Here's the problem: everything is sold on price! PRI, T1, broadband, voice and TV. These are all flat consumer markets. Even in the B2B space, voice and Internet Access are a flat market. It's all a game of take away.

So the carriers are looking for indirect channel partners who can get them new accounts (take-aways from other carriers) and partners who can solution sell more advanced services than MIS, broadband and voice.
The carriers think that Cloud and Managed Services are where the growth is. Agents have not shown a preference to learn SIP, MPLS, Conferencing or Managed Services; hence, carriers are chasing VAR's.

Where does that leave the Agent Channel?

Where does that leave Master Agents?

Every year,Master Agents have to sign a contract for (usually) higher quota. Meanwhile, organic revenue for most carriers is dipping (hence, all the M&A to juice up the balance sheet for The Street). The price for DIA and T1 are at an all time low -- so how do you sell stuff cheaper but hit a higher quota?

What happens when you can't hit that quota?

Selling the same products (or commodities) at a lower rate requires an Agent to sell a lot more just to maintain the same lifestyle. All of this happening in a slow economy with tight budgets in a marketplace that is hyper-competitive.

Sure VoIP is growing but at the expense of wireline voice.

So markets aren't growing; quotas are increasing; revenue is dipping; customer acquisition costs are rising. It's a perfect storm.

Carriers and Masters have to find more people to sell services, preferably newer, higher value services that bring in more ARPU and more margin. It's one reason that you see M&A in the VAR and master space. It's also why you see some newer masters, like COLOTRAQ, appear with a specialty or niche.

Microcorp's slogan for their agent confab is Invest in Yourself. At TCA, our main goal is to educate the Channel to be valuable to the carriers. The TCA CTP is about education for the agent community so that we can continue to provide value and make a living in this new telecom space.



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