Halloween Special 2 - The Nightmare on Channel Street: Disappearing Commissions

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Convey MicroCast Series

This is Carolyn Bradfield and you’re listening to the Convey MicroCast audio series.

This week is our Halloween MicroCast series and yesterday we gave Freddy Krueger a shout out by entitling our first episode, the Nightmare on Channel Street. We identified nightmares in the channel that keep you up at night, ruin your channel program and destroy revenue. Today we’re going to focus how you wake up from the nightmare, run away from the monsters chasing you to not only survive on Channel Street, but to thrive.

Let’s focus on the problem of the disappearing commissions. We’ve seen the rapid pace of mergers and acquisitions in the channel, many of those deals financed through debt, saddling the company with large debt-service and interest payments. Take Windstream as a prime example. They snapped up smaller companies like Earthlink and went into debt to do it. You know the rest of the story; this year Windstream had to file bankruptcy in order to survive and protect itself.

Now, enter the bankruptcy court, and that channel program lost a level of control over how partners got paid. Commissions became at risk, especially to those partners that stopped selling new Windstream accounts years ago. So how do master agents and partners protect themselves from this nightmare on channel street? Here are some ideas.

First, diversify your provider portfolio.

The first rule of business is not to put all of your eggs in one basket. Companies that have a top-heavy revenue stream tied up in only a few customers are those at most risk. Although you have your favorite providers, putting most of your revenue in one place elevates your risk. Beyond that, you may be missing new services, new strategies and new opportunities other providers might represent to you and to your customers.

Next, upsell existing customers with additional services.

If you’ve sold big network deals, you are likely making good commissions from those relationships. However, those companies have evolving technology needs that you can fill. If you affiliate with a master agent that is part of a master agent association like the Technology Solutions Exchange or the Alliance Partners, those master agents very likely own Convey Partner Portals. Inside their portal is a world of other cloud and technology services you can offer your customers to upsell to your customer base and continue to diversify your source of commissionable revenue, reducing your risk.

And third, stay abreast of channel developments.

Most of the struggles that vendors are facing in the channel are often reported on in the variety of channel publications and websites. Make sure to access those sites and read the tea leaves so that you are not surprised. If you know what might be coming with suppliers you work with, you can make more intelligent decisions about where to place your business so that it is in less jeopardy.

The nightmare of being blindsided by changes in your provider’s business is one that can be avoided. Plan now to diversify the providers that you place business on, diversify your portfolio by upselling customers with new services, and stay informed about developments with the suppliers that you are working with.

This is Carolyn Bradfield and you’ve been listening to our MicroCast in the Convey Channel Partner special Halloween series.