Agent Exclusivity

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

Agent Exclusivity

There is a lot of talk in the Channel about Agent exclusivity to Master Agencies. Most of the talk is from Masters.

Telecom is an industry of short memory. We forget everything.

We forget that MCI left many agents high and dry when they filed the largest BK in history (up to that time).

We forget that telecom companies have a history of BK - Cogent, Above.Net, MCI, XO, Integra, Williams, Global Crossing, Birch, MacLeod, Winstar, Adelphia, Covad and the other DLEC's (see here and here and here). Over 60 companies have filed BK in our industry since 1996. We may yet see another round of that soon.

Now Master Agencies have not gone BK as far as I know. However, with the increasing pressure from carriers to hit quota quarter after quarter or lose commission points, it is only a function of time before Master Agencies have to "re-adjust" the commissions they pay agents.

Agents learned in 2002 that you cannot have a single source of income. Period. Look what happened with InterNAP just recently!

There are reasons to use more than one Master Agency - other than shopping commission points. I use one for AT&T only - and I have since I parted ways with my BellSouth agent. 

My current Masters do not have a contract with MegaPath. MegaPath seems to have an offering that my clients might like. Should I ignore that or find an agency with a contract for MegaPath?

At the end of the day, I have to think about my business, my revenue and my customers. I don't put my revenue above my customers, but I do put it above my vendors and partners.

No one is making certain that my business is doing well except for me.

One other memory loss: there was a time that carriers had exclusive agreements (at least the ILEC's did). What did the Agents do? Set up a different LLC for each contract. There have always been ways around exclusivity. Do you we really have to play that game again?

Better than forcing exclusivity, how about giving your agents enough reasons (VALUE) that they won't look elsewhere? That's the real answer - for Masters and Carriers.

FINAL THOUGHT:

It is funny that this conversation comes at a time when traditional agents are largely being written off for VAR's as the future of the Channel.


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