When you’re in the market for business phone or internet service you can work through a telecom consultant or with a sales rep employed by a phone or cable company.  Many people believe there’s less risk working with a direct sales rep or that they would pay more if they went through a telecom consultant, but that shouldn’t be the case. 

This is the second addition of a multi part series comparing direct reps to telecom consultants or agents. 

In this article, I’ll discuss why agent channels exist.

mpls and sip service providersAlmost every carrier has an agent program.  There are a few that don’t, but they’re the exceptions.  Phone and internet providers want to maximize the opportunity to secure new business, so having two separate sales channels makes sense.  Also, some businesses lean on outsourced phone vendors and tech support professionals because they don’t employ company staff to fulfill those job responsibilities directly.  These vendors service and manage the company’s entire phone and computer equipment and all that’s connected to it.  They earn maintenance and service fees but almost always end up working more hours than they bill for.  They expect to be compensated for their time and the residual commissions that a telecom agency pays them helps supplement their income and cover the gap between time served and time paid.

I worked on both sides: direct sales and with an agency.  As a direct rep, the businesses described in the previous paragraph referred me to their I.T. or phone vendors when I approached them about my services, but the vendors were not interested in what I had to say if I couldn’t compensate them.  Any business phone or internet service provider should understand why they need an agent channel to capture this type of business.

Agents tend to be more experienced and possess a network of contacts that refer them new business.  A carrier without an agent program turns its back to this new business stream.  They’d also be passing on experienced professionals that are able to apply sophisticated telecom solutions, like MPLS or SIP trunks.

Why an agent channel and not a mechanism for direct reps to compensate phone vendors and tech professionals for referred business?  It wouldn’t make economic sense.  A company is already paying a direct sales rep a salary, commissions and benefits.  Why do that if you’re going to give them the ability to go out and buy new business?

Telecom consultants, or agents, are only paid when a sale is made; they’re independent contractors.  Other than the expense of the limited staff to support an agent channel, there are no other costs until deals are completed.  And because the costs are mostly variable on the agent side, a carrier is better able to adjust to changes in the market economy versus managing the fixed costs a direct sales staff requires.

In next weeks article I’ll how agents and direct reps are compensated.

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