These were my thoughts on the 2011 CPZ that I was a panelist on. These are my thoughts as a reaction to the latest CPZ.
Surprisingly, not everyone read my post about how the whole telecom eco-system is shifting. Agents, Masters, Carriers and Cloud Providers are all going to experience a Shift.
Did you ever see Shift Happens?
Considering all these factors - Quota, Debt, declining revenue, pricing pressure, and flat markets - the future looks bleak for telecom.
Most of the people who were talking on the CPZ 2012 video about transactional agents are not actually agents. Many are not agents and to my knowledge never have been.
Does a subset of Agents shop masters? Probably.
On the other hand, I know masters who shop to sub-agents with "I'll give you another point or two to go with me." Part of this is due to the weight of quota on the Master Agency business. Master Agents are under a tremendous pressure to hit quota to keep the support level and sustain the commission revenue at its current level.
Value and Telecom
The whole Industry talks about VALUE, but can they describe it? Or is it really all a bunch of me-too companies at every level? UNE-P, Integrated T1, SIP Trunking, etc. It's all just a bunch of me-too similar looking and sounding services.
Branding is non-existent in our space, except for the Duopoly of ILEC and MSO. Some value comes from branding. Other value comes from benefits and differentiation.
An example would be how telcos painted cable broadband as a shared service. Yet cable won the broadband war. Without value, it becomes a commodity. Commodities are price shopped. Tell me the difference between any two Internet T1's or any two SIP Trunks.
Carriers are Unhappy with Agents
Just because Agents don't act like you want them to doesn't mean they are all in the wrong. You built this current eco-system. Now you want the ship to turn on your say so. Easier said than done, pal.
And really have you done all you can to give Agents the tools they need to sell your product? Not to be repetitive, but have you established your value statement? Do you know who the target market is? Do you know what triggers the sale? Who is the actual buyer? Answer those questions first.
The Industry wants the Channel to go upstream, except they don't. By that I mean, the carriers want revenue. Period. We all have quota. While they might want an Agent to sell MPLS, they aren't turning away T1 business either.
Keep in mind that it might be that the marketplace doesn't want to go upstream either. Cable is doing an excellent job of disrupting the market and stealing business with cheap loops.
At a CLEC training, it stated that cable would own the sub-$500 business. It was almost like they were ceding it. Yes, the MSO will become the de facto ILEC, while the ILEC's cede that business for more fertile ground (like cellular).
In the training, the CLEC stated that they want Multi-site, multi-access business. Unfortunately, again, they all compete for that same business with the same exact tool. Masergy, Smoothstone, EarthLinke, Megapath, Netwolves, Wind, CenturyLink - just to name a few, compete for that exact business of Multi-site, multi-access. To hear carriers talk, I guess, MPLS is the new Integrated T1 (in every way).
No one buys the way most service providers sell. That's why we are always searching for Consultative Sales Professionals. Because the whole industry sells what they want - and it is followed up by a series of me-too. ... Just because one CLEC is selling Managed Security does not mean that the marketplace wants it or will buy it or that it will want it delivered that exact way. It also doesn't mean that the next eight CLEC's or service providers need to market that same offering. Do we know what the marketplace is expecting?
How Things Can Shift
One thing that could cause a big shift is if Tech Data became a Master Agent. With TDMobility, they already have the platform and are selling cellular in a Master Agent model. Plus by selling mobile device management, a kind of TEM and all that hardware, they have caught up to the big Masters. CDW could become a Master Agent if they wanted to - and they might have to in order to sell more hardware.
Dell could become a Cloud Provider. As it stands now, they are an MSP Enabler - and Dell is selling CDN! It will be interesting to see what Ingram and SYNNEX - both betting on cloud services for their future - do to not have to compete with Dell head-to-head, while also competing with Tech Data.
I don't think that most telcos will make the shift to managed services and cloud successfully. It's labor intensive. It doesn't scale like telecom. They think they can automate everything, but that only works for cookie cutter stuff. I think MSP's will win this war. Cloud system integrators will win if they partner with VAR's who can handle the on-going maintenance and support that all this technology will require.
Can the Channel change to become Trusted Advisors? Probably not all of them. Selling Cloud is different than selling telecom. Period.
The Channel basically sells replacement services. Here are some examples: VoIP for POTS: SIP Trunk for PRI; Ethernet for T1. Each transaction is replacing like for like. Even MPLS is just a replacement for Frame Relay, ATM and IP-VPN.
That is why selling Hosted PBX and other cloud services are so challenging: It is not a simple replacement. It's not like for like.
The sales process for selling replacement services is pretty easy. When the sale becomes about business process change or fork-lift upgrades (like Hosted UC or Virtual Desktop), the sales skills are different. The sales cycle is different - and longer. Provisioning takes longer. Ultimately, commission payments are much later.
This is really important to remember.
Selling Cloud and Managed Services will not just be more of a challenge, but it may be less satisfying. Why? Transactional sales types are motivated and driven by quick hits and a lot of ink in a month. Extended sales cycles are less motivating to this type of sales person.
Moreover, as commissions decline with the price decreases, agents have to sell more and more to maintain their revenue goals. Shifting to new products, new sales skills, and a different sales approach will be a huge leap, especially without training, a financial cushion, a deep desire for change, and vendor support.
Agents are not FARMERS! They are Hunters! They do not do Account Management, cross-sell or upsell to the base. Smart agencies will higher a couple of farmers to work the customer base and perform account management.
All of this makes me wonder who will be the Agent of tomorrow, who will be grooming accounts and performing consultative selling of complex solutions to their customers?
