Monday, October 08, 2007

Independence, Huge Limits

Until 2003, all Master Agencies were pretty much the same. Each of them had (and still has) the self-proclaimed job description of acting as in intermediary between agents and carriers. Many of them have tried to distinguish themselves by providing a “back office” which is comprised of dozens of people who push paperwork, follow up with vendors on order status, and provide the necessary accounting support to provide agents with accurate and on-time commission payments.

Since then there have been a few companies who have taken a different approach to being a master agent. One Master Agent cut out all “back office” personnel in order to offer the highest commissions possible, selling “subscriptions” to agents to obtain these high commissions. Some agents jumped at the idea of super-high commissions and paid the gateway fee while others passed on the opportunity to make a higher gross commission in favor of the status quo.

The Master Agency that Adam Edwards and I started in 2003, Telarus, Inc., was one of the few (if not only) Master Agencies born of non-telecom veterans. Our naiveté was both a blessing and a challenge which ultimately led to the creation of the “next generation” Master Agent. Coming from an aerospace engineering and big-5 accounting firm background, we saw the entire telecom agent setup as a big “mess”. Agents needed Master Agents just to sort out all of the disorganization coming from the carriers, each one with their own rat’s nest of paperwork, pricing, and commission plans. Add to that the “island” approach to working in the telecom business, ergo agents dealing with a Master Agent on a one-to-one basis, competing with one another for business, and you have a recipe for independence.

That independence comes with a price, however. There is only so much a human being can do in a day. There are only so many customers an agent can call in any 24-hour period. As agents grow to around 200 clients, the work required to maintain the base of customers becomes a full-time job. Agents hit a saturation limit and their income growth is artificially capped. Granted, 200 clients should equal over $15,000/month in commission, which is nothing to sneeze at – but the glass ceiling exists nevertheless.

All of these things entered into our planning of Telarus. We could only succeed if we could figure out at way to get most of the people in the “back office” to go away through automation (we were funding the business with our savings accounts, which forced us to automate). We could only provide value to agents if we could get price quotes to them in 5 seconds, again, through automation. We could only allow agents to break through that “glass ceiling” by creating an in-house CRM system that actually allowed them to work together on deals, and to split up the lead generation and sales pieces of the sales process, and to interact with VARs. Likewise we would need to create a system to allow agents to grow beyond themselves, to hire administrative staff, and to eventually mature into master agents themselves.

Not coming from the 1980’s and 1990’s telecom crowd, things like this just made logical sense to us. We did not have decades of old dinosaur telecom logic engrained into our consciousness and thus, our business plan was and remains radically different. But even with what we thought was a great plan, we always let our agents guide the ultimate shape and form of Telarus. Each week we meet will ALL of our agents on a conference call to discuss what’s working and what’s not about our program, our software, our vendors, and our staff. Our agents are painfully honest in their feedback, but we see it as our job to create the software infrastructure they need to succeed as agents, and eventually as master agents.

So which kind of Master Agent is right for you? Here is a quick checklist that you may consider when making your choice:

A “traditional” Master Agent is for you if:

- You have no problem finding leads.
- You have no desire to speak to carriers directly about special pricing.
- You do not have a need of speaking to a technical sales engineer who works for a carrier.
- You want someone else to handle all of your order paperwork.
- You do not require instant pricing for your customers and can wait a few days for a quote.
- You have no desire to partner with other agents on sales opportunities.
- Your VAR partners send you telecom leads without requiring reciprocal equipment leads.
- You don’t mind using off-the-shelf, on-size-fits-all software like MasterStream and RPM Software.
- You are already a Master and would like to combine your book of business with a Master who has met their volume commitments.
- You are happy with your web site and online marketing strategy.
- You require the maximum commission, whatever the cost.

A “next generation” Master Agent is for you if:

- You don’t mind taking a lower commission in return for warm leads being assigned to you on a daily basis.
- You have no problem earning your way up a commission scale.
- You find it an advantage to obtain instant pricing for your clients.
- You don’t mind working directly with a Channel Manager who works for a carrier.
- You don’t mind helping your customers fill out paperwork.
- You don’t mind acting as a main point of contact for your customer, where carriers send you order status updates.
- You are happy to receive maximum commission on your own deals.
- You would like to upgrade your web site with value-added content (like xml-enabled real-time quotes).
- You like the idea of receiving marketing web site code that you can modify and use as you see fit.
- You would like to introduce your VARs to a system that feeds them equipment leads every time they feed you a telecom lead.
- You want to hire administrative staff and give them limited access to your customer records for follow-up and up-sale.
- You want to eventually graduate into a master agent of your own, with free software that enables you to do just that.
- You would like Search Engine Marketing coaching and mentoring by people who actually do it (successfully) for a living.
- You think that having a sales CRM, real-time quotes, and accounting system in one back office will help you be more productive.
- You like the idea of having a team of software engineers that can modify your back office interface, marketing web sites, etc. in a matter of hours.
- You like the idea of being part of an agent community, working as a team, communicating on a live bulletin board system.
- You want to make your opinions and suggestions heard on weekly conference calls.
- You are already a Master and are in need of a back office for your sub-agents, but don’t mind sharing contracts.
- You are already a Master and would like to combine your book of business with a Master who has met their volume commitments.

As you can see, there is a wealth of differences between the two main types of Master Agent. When making a decision about which one is best for you, keep in mind your own goals and end-game. Figure out where you would like to be in five years and then align your goals with the Master Agent that makes the most sense. Are you looking for a solid income stream that will afford you a comfortable living, or are you looking to create a system and employ people in hopes of building a substantial book of business? Independence is good, but interdependence is the only thing that can help you shatter the glass ceiling that hangs over the head of every agent in this business.

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