Master Plans: Top Master Agents Address Evolving Role

Allen: There are three ways to look at it. One is your contracts on the street. Another metric we use is how many checks that we cut. But that doesn’t even get all the way to it. The third metric we look at is how many agents give us at least one deal a quarter. Whereas I can tell you we have 1,000 contracts out there, it gets down closer to 100 when you talk about consistent producers.

Bommer: It's interesting because Telesis and PartnerTEL merged two years ago now. And we really took last year and cleaned up. We cut roughly about half the agents that were just “toe dipping” as I’ll call it. We did either a buyout of their contracts or agreed to pay them for a number of months, etc. We cut our agents in roughly half. We have about 150 agents right now. We are big on the direct model as well. About 60 percent of our revenue comes from our direct sales efforts, not our agents. We are looking to grow that number, but we are not looking to grab an agent and sign them up. We are putting requirements on them to produce. If not, they can go somewhere else.

Bommer: I think it was true a while ago. Anyone who didn’t sell an order for 12 months, we have the ability to cancel them. Our intent is to motivate them to sell. That’s why we gave them options to buy out. Of the 150 on the books right now, I would say we look more like 50/50. Were we like an 80/20? Absolutely. … We are going to address the ones that are still not producing. We will continue on that game plan. We took care of the easy ones right off the bat and we will start moving up the ladder from there.

Jay Bradley: As Gene said, we went through that change several years ago and really cleaned up the roster. We manage agents in the 300 range. Because we have commitments in our agreements and we enforce those agreements, we have a small group of people that are transitioning through at any one time — somebody that’s new, a partner that’s building their base or their circumstances changed and they are on their way back out. I would say we are in the 70/30 or 65/35 range in terms of where a majority of the revenue is coming from. I would agree that the big measurement is not how many you have, but who is producing in a given time period — a given month, quarter or year. We are probably even closer to a 50/50 if you measure who is producing in a given time frame.

Vince Bradley, president and CEO, World Telecom Group: I completely agree with the sentiments of everyone else. What we also look at is how many agents comprise the revenue. It’s a conversation of revenue and also sales. Whereas the agent may sell every month, they may be selling smaller deals. Or we might have an agent who sells every quarter, but he brings a $40,000 account every quarter. It’s kind of hard to gauge it, but I would agree with what is said. I think our shop is 70/30. We have a contracted base of 1,200 agents. Quarterly, we get deals from about 400 agents, and monthly, it’s more like 300.

Edwards: We do the same thing. We measure by month and also by year. We do about 70 active agents per month. During '07 we had 140 agents that sell, so they are selling every other month or sporadically.

Edwards: It’s absurd. It’s 99.9/0.1. We have literally 30,000 agents signed up because we have a lot of online affiliates. We are big into affiliate marketing. Some of these people are Web site owners that send us a lead or two. They are not true telecom agents. They funnel leads into our system and we refer it to another one of our agents to sell through. In terms of signed agents, the numbers are way out of whack.

Kinney-Mantione: We also purged all of our agents at the end of last year. We are getting ready to do it again. We also look at number of quotes to sales. We really manage people out of working with us if they are not producing and selling. We are not going to waste our time with people who aren’t productive based on services we are providing to them. We are pretty up front and clear with them on that. I still think it’s 80/20 of active agents. We look at the whole gamut of number of quotes, revenue of those quotes and the revenue and number of orders they got.

Raue: The 80/20 rule is generally a good number but the “20” changes every month. We do a lot of work for other master agents on the AT&T side of our business as well as work with partners that have subs underneath them as well as individuals, VARs and referral partners. Our revenue growth over the last few years has been primarily due to larger end data applications, such as MPLS and Internet products. So the “20” differs every month depending on which agents “hit a homerun” every month.

Jack Knocke, COO, MicroCorp: 80/20 is probably a good number. We take our agent base and try to categorize them — regular producers, high performers and high potentials. We’ve got a group of active agents. We have a group we’d like to coach up to get into that area. We also have a few deadbeats that need purging as well. We are really trying to focus on coaching up to get agents into that top tier because that creates value for both of us.

Geoff Shepstone, president, Telecom Brokerage Inc.: We are probably the exception in that we don’t cancel agents and we never have. Realistically, the cost to have an agent as a line item on your list of agents doesn’t cost anything. They get an e-mail distribution; there is not really a cost to a non-producing agent. If they want to bring us a deal every other year, that’s OK with us. … If they put business on us, we’ll pay them for as long as we get paid regardless of what they do in the future.

We do stratify agents as A, B, C. A agents get a channel manager assigned to them. B agents get a vendor specialist. C is just on the roster. We try to support them appropriate to their level of productivity. As far as the 80/20, I would tighten it up a little more consistent with what the other guys are saying.

Jay Bradley: We have a company that is in startup mode and they have an interesting product in voice over messaging. It’s not a big part of what we do, but it’s interesting. Partners can use it as a way to sell their wares. It came out of the voice processing world. Basically, it’s a document that you put your voice over and send it as an e-mail. It’s actually quite interesting.