Agent ‘Shopping’: Too Much Talking, Not Enough Listening
By Adam Edwards
**Editor’s Note: The following is part of an ongoing conversation among Channel Partners readers about what’s turned out to be a highly controversial Channel Partners Zone, an invitation-only event at the Spring 2012 Channel Partners Conference & Expo in Las Vegas. The author’s thoughts below were originally posted in our reader comments section. Click here for more blogs from readers who are fired up about the issues discussed in the video at the end of this blog.**
Why is it offensive to receive advice from an employee of a master agent? Is it because they aren’t qualified (i.e. they are the receptionist and not engaged in the operations) or is it because they are not a business owner?
I understand that advice from an unqualified person is not appreciated, but I also believe that as a business owner you always seek insight from others around you. I’m a business owner and I’ve hired multiple experts to advise us. I’m at the disadvantage of only owning and operating one business for the last decade, but the consultants I engage have worked with and helped hundreds of companies like mine. They have a vantage point I do not because of their exposure to so many other companies.
Likewise, I think employees at a master agency do have quite a few things to say that are valuable. Our employees can tell a new agent how long it takes to create their target income based on the history of many new agents with whom we’ve worked. We can advise those agents of the success we’re seeing in the marketplace, the failures we’re seeing, and offer many other insights because of the fact that we work with so many agencies. I suppose if this is delivered in an arrogant or condescending manner, it could be offensive. I also understand that unwanted advice is often ill-received, but I don’t think employees at a master agency are unqualified to offer help and advice just because they’re not business owners. As long as they’re speaking in their area of expertise, I think they have some great insights.
The balance of [TelecomMedic Bill Leutzinger’s] post, [“Masters Gripe About Their Agents,”] focused on “shopping,” which was also a big topic in the video [below]. I see both agents and master agents acting rationally in the video and in [Bill’s] post but I think both sides are speaking past each other. I believe that when we talk about “shopping,” we’re talking about seeking a better commission on a particular one-time deal, or a source for the best commission on a specific carrier. I think this is perfectly rational. A commodity is defined as a good that is supplied “without qualitative differentiation” across the market. A bushel of wheat is a bushel of wheat, so why not get the best price? The same goes for commission. Why not maximize your commission (i.e. lower the price) if there is no differentiation in quality?
In addition to maximizing commission, [Bill] also makes a case for diversification. I agree with this as well. In my previous life as an auditor we would fault companies that had too much income coming from a single source. I also believe it can become counterproductive. Robert Kiyosaki, author of “Rich Dad, Poor Dad,” calls diversification “deworsification” because you can become so diverse you are no longer able focus. Having many master agents and direct contracts is not like having many mutual funds. The former require active relationship management, the latter require only passive investment. I believe that most master agents are working hard to increase the value they deliver to agents. We’re trying to offer marketing help, engineering help, training, and an increasingly diverse set of solutions. It’s hard to dig deep with an agent and invest in the relationship if the agent’s attention is spread across four master agencies and a smattering of direct contracts. I believe this is a valid reason for master agents to ask for volume commitments or exclusivity and it’s perfectly rational.
I believe the solution to the points raised is to match the participants with the value they seek. If an agent is simply “passing paper,” and does not need or want any additional service, the master agent should identify the agent as such and treat them accordingly. It would be silly of Walmart to place a personal shopping assistant with each shopper, not just because of the cost incurred, but because of the intention of the customer. The customer knows what they want, is seeking a good price and does not value the assistance. Conversely, if an agent values additional support, consulting efforts, marketing help, etc., the master agent should identify the agent as such and treat them accordingly. Agents come in many shapes and sizes and their requirements vary. Master agents also come in many shapes and sizes. It seems to me that everyone would be better served if agents could align themselves with master agents who offered what the agent values.
Adam Edwards is president of master agency Telarus Inc.
Looking for more on this channel conflict? Click here for more blogs from readers who are fired up about the issues discussed in the CPZ video.
