10 Reasons Why Companies Are Moving from OEM Reps to Independent Telecom Agents
By Pat Halliday, Carrier Services Specialist
In our business, companies are increasingly choosing to get their telecom services from Independent Telecom Agents instead of from the provider’s direct representative. What’s behind this growing trend?
We’ve identified 10 reasons.
1. The Proliferation of Mergers and Acquisitions
Sales is already known as a high turnover profession, and the recent rash of mergers and acquisitions in telecom makes it highly unlikely the representative who signed you to your term agreement will still be there to assist you a year from the date you signed it.
Following deregulation, we saw many telecom bankruptcies that led to mergers and acquisitions within the industry. In the past couple of years alone, we’ve seen such major mergers as Level3/CenturyLink; XO Communications/Verizon; Earthlink/Windstream; and Electric Lightwave/Zayo, to name a few.
When you use an Independent Telecom Agent, you can be sure that, regardless of continued merger activity or bankruptcies, you won’t need to keep editing your contact list: Your Independent Telecom Agent will not only continue to have the same contact phone number and email address, but the Agent will not be laid off or fired, and will continue to supply you all the services and options you may need.
2. The Ability to Work with a Single Point of Contact
Regardless of whether your Independent Telecom Agent recommends a single carrier solution or a multi-carrier solution, you will still be dealing with a single point of contact, a person who knows you and your account well.
There’s also a time factor involved. During the pricing and evaluation process for a new carrier, businesses typically obtain at least three bids and schedule at least two appointments with up to three carriers. Before your company can make a well-informed decision on a communications provider, you may have had to schedule at least a dozen appointments! The good news is that when you use a qualified Independent Telecom Agent, you can spend one appointment determining the best course of action, and just one more evaluating the best options available in your market.
Having a single point of contact is a huge time saver!
3. The Benefit of Working with Someone Who Understands You
Once they understand your business needs and preferences, Independent Telecom Agents act as assistant buyers. They get to know your organization, including goals and long-range needs, and how and why you make decisions. Do you really want to repeat that process every couple of years?
4. The Importance of Being Told the Truth!
Perhaps this should be ranked #1!
When you use an experienced Independent Telecom Agent, you tap into a wealth of knowledge and experience of someone who has been in the field for many years, most likely with many different carriers. Your agent will typically have experience dealing with multiple carriers in your market and can tell you how they really perform—not the rosy picture they all want to paint for you. Who has the most reliable network? Who has billing problems? Who is going bankrupt? Who can make the desired install date? When using an Independent agent, you don’t have to listen to “The Company Story” for each carrier, as they always tend to dress up their deficiencies. With an Independent Agent, you will hear the truth.
5. The Value of an Unbiased Opinion
Getting stuck with a carrier that can’t meet your future requirements can be crippling to your operation. Whether your business is expanding, streamlining, or even contracting, your Independent Telecom Agent can help you find the right solution. Why purchase a solution that can’t grow with you, creating the need to upgrade sooner than expected?
Decision-makers need to “future proof” the services they purchase so they don’t find themselves locked into a term commitment with services that don’t meet their needs. It is vital to get set up with a carrier that has services that are sufficiently flexible to meet your needs. Do they offer MPLS/SD-WAN? Do they do SIP trunking? Can they offer an IP-VPN solution for your remote sites? And what about the ever-changing security landscape? Your Independent Telecom Agent makes it a point to know most carriers’ products and limitations and will find the right flexible solution for your company.
6. Independent Telecom Agents Are Invested in Your Long-Term Success
This “independence” benefit of working with an Independent Telecom Agent is an incredibly important concept to understand! The direct sales representative for a telecom company, one that may be here and gone tomorrow (rep or company), is paid only when he or she brings in the sale.
As we all know in the world of corporate sales, comp plans drive behavior, and sales reps are specifically told, “If the customer has a problem, send them to the Help Desk. Do not get involved. You are paid ONLY to bring in new business.” There is absolutely no motivation, despite the direct representative’s best intentions, for them to ever speak to you again after you sign the dotted line. It’s sad but true. On the flip side, because Independent Telecom Agents are commission-only and residual-based, earning a small percentage of the monthly bill, it takes them, in many cases, up to 24 months to get paid what the direct representative will get paid the first month after the sale.
The motivation for becoming an Independent Telecom Agent is simple: to build a book of business of happy customers that don’t have to find and deal with someone new every couple of years. This relationship only makes sense for the agent if you stay with them for over 24 months, so they are very motivated to help you solve all of your service issues. Good Independent Telecom Agents aren’t just “another business associate”; rather, they become part of your team.
7. They Don’t Have to Make a Quota
One of the biggest issues I have with the Direct Sales Carrier Business Model, is that if you call in to the call center to order new service, you will only be told about what they want to sell you and not what is best for you.
It is very common for Independent Telecom Agents to uncover up to 10-20% of pure fluff on your bill when conducting an audit of your current services. Why does this happen? Simple. The direct representatives you buy from have a quota to make and will often sell you what is good for them, not what is good for you. They are directed to sell what is profitable for the carrier they work for, and are paid accordingly based on their ability to do so.
On the other hand, top Independent Telecom Agents, almost without exception, do not carry quotas with any carrier. Because they do not “carry quotas,” you will not be pushed towards a solution that doesn’t fit right, just so the rep can hit his or her numbers.
8. Extra Incentives and Promotions
Increasingly, the Telecom Industry is moving towards the Independent Agent channel.
What’s behind this trend? There are several underlying factors.
Independent Telecom Agents are typically more knowledgeable, better trained, and know how to set the right expectations with their clients. As a result, their clients tend to remain clients longer (since they were sold the right solution in the first place), and it is more cost effective for carriers to deal with Agents. They do not have to pay base salaries or benefits on top of commissions.
Strangely enough, where I have seen this benefit the customer most, is in the form of special incentives and promotions offered only through the Agent channel. It is not uncommon for agents to compete head to head with a direct representative for one of the carriers they are representing. It is also not uncommon for the agent channel to have promotions or incentives that the direct representative has not been given for the customer, and the agent will typically win the customer because of that fact.
If the direct representatives have promotions available, they are often given additional compensation to not use them. Independent Telecom Agents will pull out any promotions available in an effort to gain your business for the long haul, as they are typically not incented or penalized for using promotions.
9. Identical Pricing
It may not be widely known, but when it comes to pricing, the Agent channel and the direct channel offer identical pricing. In spite of all of the additional knowledge you can tap into with Independent Agents, you can be sure you are not charged any extra for it. For large projects, special pricing is available to both Agent and direct channels at the same amounts. It’s an incredible model that serves as a win-win for the customer and the agent alike, ensures that all clients are treated equally.
10. Agents Understand Next Generation Technology
Finally, one of the most important benefits from buying from an Independent Telcom Agent is his or her understanding of the many offerings that carriers present. This is largely because Agents spend the time learning about industry technology offerings, rather than specific products and services offered by any one particular carrier. Direct representatives may know minor aspects of their individual limited product line, but they will not have the overall understanding of all that is coming with new technology.
No single carrier can master all technologies and product niches. So, it follows that it is nearly impossible for a direct representative to have the same awareness of exposure to the various solutions you are evaluating. Business is fiercely competitive, and the correct implementation of some of the newer technologies can literally save larger companies hundreds of thousands of dollars.
That savings may be the exact edge your company needs to gain the competitive advantage in your marketplace, whether that edge includes security, marketing, recruiting, or even retention.
Pat Halliday is Continuant’s Carrier Services Specialist.