Peter Radizeski is Founder and President of RAD-INFO INC. He is an accomplished blogalyst, speaker, author and consultant. He has helped many service providers with sales training, marketing, channel development and business strategy. He is a trusted source of knowledge about the telecom sector. His honest and direct approach make him a refreshing speaker.

Look for his innovative ideas and analysis of current technology on his blogs.

Meet him at one of the many conferences he attends and speaks at.

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More Master Merger Mania

Avant bought PlanetOne today. I didn’t see this coming, but from a culture it fits: Beer Pong meets Jaeger machine. The march to Bigness continues.

It leaves just three major independent brokers: TBI, TCG and Sandler. There are also a host of smaller brokers like COLOTRAQ and the members of TSX.

As a partner still feeling the ripple effects of three of my brokers being acquired, I hope the PlanetOne partners don’t have to go through this mess. Yet I am pretty certain they will. This is the first merger for anyone at either company. They have no idea what is coming.

Synergies make these things possible, but that usually means RIF people that are redundant or won’t play ball or are expensive. I figure Ted will be there 12 months (unless the terms state longer).

Scansource released quarterly numbers this week.

Intelisys revenue was $19M for the quarter, $55M for 9 months of fiscal year; compare with 1 year ago it was $16M and $47.7M.  That’s about 16% year over year growth for the only public broker (TSB).

[Aside: in the SEC filing for the quarter, with all of the notes, it was a challenge to tell if growth was 15% or 18%.]

Let’s say that Intelisys is below average and the others are doing 25%. I know a few have said 30+% of growth but I find that unlikely as pricing has dropped for network and connectivity as well as for UCaaS. So if prices depress, the number of transactions would need to increase substantially in order for 30% growth.

Let’s say 25% growth in top line. They pay out 80% of that top line. For that $19M for Intelisys this quarter, they keep $3.8M.

What is shocking is that Intelisys “had 2015 gross commissions of $120 million” when it was acquired by ScanSource. In 6 years, it dropped to less than $80M?

Intelisys has over 200 employees on LinkedIn. No idea how many of those are 1099, since a common practice for TSBs is to “Hire” people on as 1099 not W-2. 1099 means as a contractor – and usually that means that a big chunk of the pay is commission. Even marketing people come on as 1099, getting a piece (1-4%) of the MDF from vendors.

The top TSBs make upwards of $3M in MDF**. That money helps to make payroll, rent and events.

At 200 employees making an average of $50K is $10M per year in payroll, not including benefits, bonuses, etc. That is a hefty payroll on $3.8M per quarter!

Back to the growth. Avant said that their organic growth was great but they needed the boost from an acquisition. So that 30% YoY was NOT enough for Pamlico Capital. They needed more lift to get a healthy return on their investment (my guess was $90M for 55% of Avant, but I heard today it was $200M*).

Let’s go back to one more thing: since Intelisys was acquired, their top line decreased!!!

As partners are making M&A decisions, they are not producing for at least 4 months (and as long as 9 months). That isn’t a lift in top line either.

All of this is a march to Bigger, not Better – just Bigger.

These mergers only work with Synergies, which is banker speak for getting rid of people. There will be too many VPs, National This and National That. There will be too many Channel Managers, so people will be let go. This will cause some Partners to go elsewhere because this is a Relationship business.

There was likely an overlap in partners so this isn’t 1+1=3 — but more like 1+1=1.5 because partners don’t want all their eggs in one basket. Also, partners don’t like risk in commissions or hiccups in business. I just don’t know where the safe haven is.

Where does a Partner go to find a commissions safe haven in a broker who is NOT PE owned??

What will be the next deal? My wild card is Bridgepointe and Sandler merge. (5/11/2022)

One partner thinks that Ingram or Tech Data will buy a TSB.  TBI is working to put its SKUs into the Ingram database now. Years ago, both XO and Microcorp tried to work with Tech Data but it so much harder than you think. It is so much more than just putting SKUs into the catalogue.

**MDF of $25K x 40 vendors is $1M; but they all have 200+ vendors AND $25K is the minimum. Platinum can be $250K per year.

*** Upstack got $50M plus $100M in debt equity. Bridgepointe got $100M+. Telarus got VC money (guess $50M). Lightyear.ai raised $13M in series A. Bluewave grabbed $75M. AppDirect, parent of AppSmart, raised $465M including $185M for App Invest. Avant $200M. ~$750M so far invested in brokers.

**** Intelisys had $120M in top line revenue and was acquired for $83.6M upfront and earn out of $100M to $150M – max of $233.6M.  PlanetOne is around $50-60M in top line, so about $100M for acquisition. Agree?

I stuff a lot of data in these posts.

Sales Math

Well there is math in sales. Ratios, KPIs. They say sales is a numbers game. That may be true, but it is really a daily habit game. If you do your daily sales activity, you will make your numbers.

Most managers believe 100 dials per day will get you quota. In the beginning, it will be a grind. Over time, with inspired research, smarter targeting, better opening questions/lines and astute questions, your Prospecting will improve.

Those 100 dials will get you more conversations.

It is really about over 100 touches – dials, emails, follow up, plus social media comments, tweets, posts, replies and likes. It is valuable follow up. Insightful drip marketing. Savvy objection handling.

Improving each step of the sales process results in better math.

REGISTER now for sales training by RAD-INFO on May 13, 2022 HERE!

Don’t Sell, Tell: a book review

I posted a book list a few weeks ago HERE.  I have had this one on my kindle for a while: Don’t Sell Me, Tell Me by Greg Koorhan. Basically, tell an engaging story about your company and product in order to brand it.

For word of mouth to work effectively, the story has to be concise and memorable to be repeatable.

Acronyms, tech terms and other useless jargon get in the way of explaining your services and the value your company provides.

It isn’t about pushing product on people like fries from McD’s. It is about explaining the benefit that a business gets from your services.

Over 2000 providers offer UCaaS in the US: Why your company over any of the big name brands? Have a really good story about the impact your provide to your customers.

Studies show that we are wired to remember stories much more than data, facts, and figures. However, when data and stories are used together, audiences are moved both emotionally and intellectually.”

“If you want to rebuild trust and connect with your audience in a meaningful, lasting way, you need to stop saying the same things everyone else is saying. Stop sounding like everyone else and tell your own, unique story.”
― Greg Koorhan

During training, one thing I repeat is to ask an unusual question. Ask something different that gets the person to pause.

Sales is emotional. It is the transfer of enthusiasm from the salesperson to the prospect. It is also the prospect realizing that there was an emotive response to the story about the service or company.

Death of the Agent

Keynotes have been saying the channel is dying a long time — back to Boston CP Expo in 2015(?).  Channel Futures has an article about Agents and what they need to do to stay relevant HERE.

In this article, Schijns said the small agency will go the way of the VAR and Dodo BUT she also said “many small agencies will survive”??? Which is it? And this coming from someone who was going to #savethechannel?! (From what?)

The article gives perspective from a few partners (no idea why a consultant to vendors was giving input).  Jeter thinks Agents should become MSPs of a sort. That requires talent and capital and building out a managed services business. It also sounds like Jeter wants agents to rebill. Agents don’t have that BSS in place. Plus collections for telecom is a PITA!

Agents selling to Enterprise have access to budgets for project management and consulting. Even at mid-market – if you can prove your value – can tap into the budget for PM or consulting or management.

Enterprise orgs are used to hiring Consultants; but even those big firms are morphing. Have you seen how many companies Accenture has acquired in the last three years? 109 companies!

Agents in the real SMB space (under 300 employees), probably look at things differently than others. If those agents listen to their customers, they can see where the path is. But you have to have conversations with your customers. You have to be more than just the telco guy or the bandwidth slinger. You have to ask great questions! Provide Value! There are different ways to do that.

What should an Agent do? Consider this:

What segment of the market do you play in? S-M-E or other? Government? Verticals? All this plays a part in how this works out.

What part of the job do you like?

Can your TSB add some value for you? How about a peer? Or a strategic alliance with another type of company that has expertise to add to yours?

What do your customers want or need (but not know)?

Do you want to build a business with talent, systems, etc.? Would you rather partner or in some way contract for the talent and systems instead of building?

Is there a segment of emerging tech – AI, cybersec, quantum or edge computing, low code, etc. – that interests you?

What is holding you back? What hurdles get in your way?

Are you just hustling just to keep your head above water?

Need a sounding board to figure this out? Call me or another partner or your TSB or someone in your peer group or a mentor – and talk it out.

 

Hey I am the 62nd UC Provider!

Recently, Intermedia announced they had joined the portfolio of vendors at Scansource/Intelisys. By my count, Intermedia is the 62nd cloud comms provider in the portfolio (that is viewable publicly). Also, by my count, from publicly available info, TBI has 58 and TCG has 53.

How would a partner know which to quote?

How would a channel manager (CM) at any of these Brokers know which to recommend?

Some of it is personal experience, but that means the newer members of the portfolio have to figure out how to provide “experience”. Some of it is relationship with personnel at a service provider — the CM or the Partner worked with the SE or the CM or the VP elsewhere.

But if that UCaaS aisle looks like the potato chip aisle at the grocery store to Buyers, Partners and CM, what happens?  Do price and SPIFF come into play?

It depends on the Buyer. What are they looking for? Some don’t know because they don’t know what is available. It is up to the Partner to do sufficient Discovery to understand what the Buyer needs. Replacing like for like is not only Lazy, but a disservice to the Buyer. So much functionality is available today for an affordable price. The Partner should be educating Buyers on the enterprise class functions that all SMB can now afford and leverage.

On a coaching call with a sales manager discussing a deal for a retirement community, the questions are about What is working, What is not working and What is Possible.

Now the what is Possible is only if the Partner knows the functionality available. Eating the dog food provides user insight. Use cases can be helpful. Vertical collateral that explains benefits and specific features that a vertical takes advantage of can be actionable.

I have tried for years to get SP’s to create, define and verbalize their Target Market and their Value Proposition. Well, with 62 vendors, the ones that are most clear about that will win business.

There are a bunch of companies in the Partner Marketing space. Marketing to Buyers is different that marketing to Partners. And marketing through Brokers is a different animal as well. The key to marketing to partners is clear, concise messaging that can be remembered and repeated.

What help with your Value Proposition? Or with Partner Marketing? Call RAD-INFO INC Today @ (813) 963-5884!

Best Techniques for Selling UCaaS – live webinar on May 13, 2022! REGISTER NOW!