The Struggle of the Channel Managers

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

The Struggle of the Channel Managers

One big struggle of the channel managers is to get agents to sell deeper into accounts. The providers would like more than Internet and Voice to be sold.

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If you have been at a master agent roadshow or conference, you know that what we will call fringe or non-mainstream vendors are looking for attention. Also, the most popular brands are looking to push new product lines. [In this picture, Dave Montgomery of Level3 is at a Microcorp road show to discuss Level's security services. Jay McClure is discussing BCN's position. MicroCorp's Chris O'Brien moderates.]

In the current SPIFF war, it is an escalation of the cost of customer acquisition (basically providers are buying market share, not mind share) for Hosted VoIP customers. It really has become a commodity now. Telarus has added UC to GeoQuote, so now the only distinction will be price. [see VoIP price comparison here]

As an aside here, UCaaS providers were already having a problem with both differentiation AND Positioning (where they fit best in the marketplace). Now any special benefits of a platform will be lost in the quoting process. Customers won't be too happy unless all they want is POTS replacement or something basic. Quoting out UCaaS like network is going to create a lot of extra work and lower closing ratios. But this way anyone can sell UCaaS like it was a PRI replacement, which it is not.

In the UC pricing comparison chart, 5 out of 6 are proprietary systems - home brewed VoIP platforms. (Nextiva is Broadsoft.) Hard to know what the feature differences will be. At least, if they were all one platform - Metaswitch, Netsapiens or Broadsoft, the price comparison would make a little more sense. Yet then you would be discounting mobility, portals, analytics and other deployment differences. It reminds me of shopping for a new smartphone last week at a Sprint store. That store didn't have a feature list for each phone, so I had to either buy it on price or rely on the salesperson (who was clueless). Not the best way to buy a business tool that you are stuck using daily for two years.

Anyway... Carriers would be wise to use SPIFFs to get partners to first notice other types of services (and hopefully sell them). Some newer services are gateway drugs for more services, more ARPU, more commissions via upsell and cross-sell. Bandwidth is a replacement product that is a transaction. Email, conferencing and backup are low churn but sticky sales that are small with seemingly low risk. However, they are the lever towards building trust and getting in the door to build an account up.

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This is an edit I did on TelePacific's SPIFF flyer this month. These are some of the sticky services. These are different conversations, but they also lead to more conversations with the client. And right now you can take advantage of all the noise and hype around Microsoft. Leverage that brand and press to get meetings, get a small sale, prove yourself.

Yet getting partners to sell services like hosted email, cloud, conferencing, backup and SAAS is the struggle. I have written before why partners are reluctant to sell these services. Chief reason is that they are heads done just trying to sell enough to stay afloat. Price compression on DIA, T1, broadband and voice means that you have to sell two or three times as many deals to make the same as you did a few years ago.

This same price pressure will slow cook some master agents and quota.

I have noticed that deals under $500 are SPIFF free. Providers are pushing sales up-market. Oh, they will take deals under $500, they just won't compensate the partner the same way.

Everyone is heading up-market. It will be a bigger struggle to get attention, to change partner behavior. It might get costly too.



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