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CX Effect has taken a specialist approach, keeping a smaller supplier portfolio than its peers in brokerage and distribution.
October 29, 2021
SaaS-based customer experience (CX) vendors are increasingly approaching the agent/broker channel about partnerships.
CX Effect’s Andrew Pryfogle
So says CX Effect CEO Andrew Pryfogle, who says CX vendors are not only signing more agreements with partners and, most importantly, offering competitive commissions for the first time.
“We now have an increasing number of very innovative, very disruptive SaaS players in the world of customer experience technologies that are recognizing the long-term value that the partner community can provide,” Pryfogle told Channel Futures. “Not only the access to the initial customer relationship but the long-term growth of that relationship.”
Pryfogle, who made a name for himself in cloud services at Intelisys and more recently preached agent/MSP convergence at Pax8, founded CX Effect last year to corner the customer experience opportunity. CX Effect holds contracts with suppliers that provide customer relationship management (CRM), business process outsourcing (BPO) contact center as a service (CCaaS) and similarly focused software providers. It works with a group of customer-facing brokers to investigate, sell and implement CX offerings.
In some ways, CX Effect reflects the business models of the tech solutions brokerages/distributors where he previously worked, but with two key differences.
First, CX Effect plays a more active role in the sales process. Pryfogle said the company often joins its adviser partners in selling to the end users.
“More often than not, our partners are leveraging us in customer-facing roles. They see us as valuable in being in front of their customer as subject matter experts around many of these new disruptive solutions,” he said.
And that expertise comes from narrowing the technology focus. Although CX Effect does list offerings like UCaaS on its line card, the company has embraced a niche role as a CX specialist.
“We can effectively do that with a very targeted and highly curated portfolio. We can’t do that with 220 suppliers in our portfolio like other distributors have. When you get that big and broad, you can really only afford to be an inch deep and a mile wide,” Pryfogle said.
Those suppliers include mobile-first contact center provider Ujet, intelligent workforce platform Observe.ai and workforce marketplace provider Shiftsmart. Intriguingly, recently signed customer service platform vendor Kustomer has agreed to an acquisition by Facebook (Meta). If the deal goes through, it would represent a fascinating team-up between the channel and one of the world’s largest tech companies.
Some of these vendors have never engaged in a commission-based indirect sales model before.
“With newer technology startups, many of them aren’t even aware that the distribution channel that we all know and love even exists,” Pryfogle said.
Consider that Justin Robbins, who now serves as CX Effect’s strategic adviser after working in the CX industry, didn’t know what the channel was when he joined.
CX Effect’s Justin Robbins
“I actually said to Andrew when we first started talking that I was willing to place a really good beer bet that, by and large, most customer experience types of leaders had no idea what the channel was and what it could do for their business,” Robbins said.
And he was right. Sure, most of them know what a reseller does, but brokers (agents) were a mystery.
“They often think about the conventional ways of sourcing technology. They just don’t realize it’s there. And that’s been affirmed through a number of conversations with our partners,” Robbins said.
However, CX Effect executives said these emerging software vendors are seeing the value of the channel. For example, Shiftsmart pounced on the opportunity to …
… harness the agent channel for the first time. Pryfogle said Shiftsmart founder and CEO Aakash Kumar warmed up to the idea.
Shiftsmart’s Aakash Kumar
“We started to talk about our business, the partner community and how it works,” Pryfogle said. “They got very excited. They had never heard of this channel before. Now they’re seeing tremendous amounts of very rapid adoption in this channel.”
Kumar said Shiftsmart is using its contact center offerings to expand globally with the help of partners.
“Our focus is to continue creating more access to flexible work and improve workers’ lives with our tech-driven platform and global marketplace of work opportunities. Working with the CX Effect team enables us to combine our innovative platform with their leadership and expertise to serve contact center leaders with a highly compelling labor solution as an alternative to traditional BPOs,” Kumar said.
However, some these companies have contacted the channel before — albeit unsuccessfully. Pryfogle said some vendors have been approaching telecom brokerages about accessing an agent salesforce for some time. However, they wouldn’t invest in evergreen commissions and contract protections.
“They had very little appetite in doing that,” Pryfogle said.
Pryfogle said countless conversations with a supplier started with a promising technology demo and a disappointing business discussion.
“They would take us through the tech stack and the problems they were solving. But when we would get into the commercial discussion, they were only willing to pay typically less than 10% and only on the first year of revenue,” he said. “They never really appreciated the value that a partner could bring long-term.”
But Pryfogle said this conversation changed when CX Effect came to the table as a subject matter expert.
Mike Schulman, director of global channels and alliances for Kustomer, said his company works with a variety of referral partners. However, he said Kustomer jumped at the opportunity to work with a partner that knows contact center well.
Kustomer’s Mike Schulman
“It’s like we found the needle in the haystack. The reason why that’s super important for us is, that’s where we play. We are different than some of our competitors. We are a B2C customer service platform that does solely focus on internal help desk. For us, getting into the right accounts, getting into the right opportunities and meeting with the right people [was important]. Our odds have gone up tremendously working with a partner like a CX Effect, because that’s all they’re focused on,” Schulman said.
Schulman said Kustomer wouldn’t be working with a traditional solutions brokerage (master agent).
“They do cover every product under the sun; a ton of commodity products. We either wouldn’t see much, or they weren’t really focused on having the expertise to speak to CX and those players,” Schulman said.
He said customer experience offerings vary significantly from selling a box or bandwidth.
“There is a nuance of expertise and experience needed for somebody to be able to have those conversations and actually architect the right solutions and bring in the right vendors,” he said.
Brokers that work with CX Effect haven’t jettisoned the rest of their portfolios. But they are starting to lead with CX in their customer conversations, according to Pryfogle.
“I think the partners that we’re seeing have more and more success are not ones that are saying, ‘I’m going to ignore everything else,’ but they’re saying ‘I want CX to be the tip of my spear,'” he said.
Vince Bradley, a longtime leader at WTG and AppSmart, recently founded Abundant IoT, a brokerage/distributor that focuses on IoT, mobility and energy. Will we see other partners take the specialization route?
Read more about:Agents
Senior News Editor, Channel Futures
James Anderson is a news editor for Channel Futures. He interned with Informa while working toward his degree in journalism from Arizona State University, then joined the company after graduating. He writes about SD-WAN, telecom and cablecos, technology services distributors and carriers. He has served as a moderator for multiple panels at Channel Partners events.
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