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April 15, 2009
The rules of engagement, as they are called, form the basis of a productive channel relationship. And while there certainly are some commonalities among such rules, there is no best practice established. So, when I was a channel manager, our team set out to draft what was deemed to be the quintessential document outlining the guidelines for direct and indirect sales representatives to avoid or resolve channel conflict.
What follows is the draft I implemented with three different carriers. I am sharing it in hopes that it will offer others a head start in creating their own ROEs and also in hopes that it might fuel conversation about best practices.
Situation: Account Assigned — Opportunity Being Worked
Account assigned to a selling entity (agent or direct sales representative)–current customer or account assigned in the CRM system
Opportunity is in SFA
Opportunity is not old–expected close date is within 90 days; or opportunity has been updated within the last 90 days; or sales stage is moving forward within the last 30 days as determined by vice president of sales
Guidelines: If another selling entity tries to sell to the account, they will be asked NOT to bid on the opportunity. Caveat: If the account was originally sold by an agent as a referral partner and compensated a 1x upfront payout, then reassigned to a direct AE, and the agent still maintains a good relationship with the customer, as determined by the vice president of sales, then the agent may be allowed to work the opportunity on a case-by-case basis.
Situation: Account Assigned to a Direct Sales Representative — Opportunity NOT Being Worked
Account assigned to a direct sales representative–current customer or account assigned in the CRM system, e.g., SFA
Opportunity is NOT loaded into SFA
If an agent tries to sell to the account, they will be provided pricing and allowed to bid on the sale.
Unless the direct AE asks for pricing to provide a bid to the customer, the management team shall not engage the direct sales representative and alert them as to the possible sale.
If the direct AE requests pricing, then the “consistent pricing guidelines” as listed will apply.
Whoever gets ink first, wins.
If an agent wins the business then the account will be transitioned to the agent module.
The agent will only be paid for services they sold, and/or incremental new revenue for upgrades to existing services.
Situation: Account Assigned to an Agent – Opportunity NOT Being Worked
Account assigned to an agent–current customer or account assigned in the CRM system, e.g., SFA
Opportunity NOT loaded in SFA
The direct AE CAN NOT prospect into account using ABC Carrier information. They had to find the opportunity by a referral or other similar means.–A call-in handed to the direct sales representative is not an applicable means for a lead to come in. In the instance of a call-in, the channel manager should be engaged to involve the agent.–If a direct sales representative prospects an agent account utilizing internal ABC Carrier information, the account and any sale made would remain with the agent.
If a direct sales representative tries to sell to the account, they will be provided pricing and allowed to bid on the sale.
Unless the agent asks for pricing to provide a bid to the customer, ABC Carrier management team shall not engage the agent in the sale.
If the agent does request pricing, then the “Consistent Pricing Guidelines” as listed apply.
Whoever gets ink, wins.
The agent will continue to be paid residual commissions on any services they sold in the past.
The direct AE will be paid for new sale and incremental new revenue on upgrades of existing service.
Situation: Prospects (Not Existing Customers)
A new prospect is defined as an account that is not currently an ABC Carrier customer and does not have any signed sales orders with ABC Carrier pending installation.
Two selling entities (agent and direct or two agents, etc.) want to propose ABC Carrier services to a new prospect.
Both selling entities may bid on a new prospect.
“Consistent Pricing Guidelines” will apply.
Whoever gets ink, wins.
Consistent Pricing Guidelines:
Where there are multiple selling entities in a deal bidding ABC Carrier services, ABC Carrier will strive to provide the same pricing for the same solutions whenever possible.
Pricing discounted below standard rates requires an entry into SFA.
ABC Carrier will discount pricing only when necessary to beat a competitor, and will not discount pricing to allow selling entities to sell against each other with the same ABC Carrier products.
If the solutions being bid are different, then carrier will try to keep the pricing for the individual items fair and equitable. However, carrier cannot guarantee identical pricing because the solutions may be different.
IN GENERAL, ABC CARRIER WILL PROVIDE THE SAME PRICING REGARDLESS OF SELLING ENTITY.
We value the direct and indirect (agent) channels equally, as both provide a critical interface between the company and our customers. Each of these groups has access to the same level of sales engineering, customer service, marketing, management, executive management and operations support.
James O. Warren, is general manager for RDM Communications, a telecom agency he founded in October 2007. Previously, Warren was a channel manager for Electric Lightwave, as well as a small re-seller in Seattle and also at Speakeasy. He began his telecom career in 1998 selling midmarket accounts for Sprint Business.
Read more about:Agents
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