Are Carriers Stepping on Agents Toes?
Josh Anderson, founder and CEO, Telephony Partners
Retention is a critical component to the success of every distribution tier in our industry. Carriers, master agents and subagents all have a vested interest in maintaining business that they fought hard to acquire. That said, the agendas of these three entities can sometimes clash. The carrier naturally wants to retain the business on its network. The master agent and subagent want to retain the business in their base, irrespective of the network.
These potentially conflicting agendas create a question of protocol that may become more salient as our economy slows further and retention becomes more important. To wit, are carrier retention efforts, even if such retention would maintain the customer in an agent’s base, fair play? Or is retention the exclusive right of the selling agent?
The fear many agents feel when learning of a carrier’s proactive retention and renewal efforts likely is driven by stories or experiences of customers (usually the big ones) being renewed and, in the process, removed from the agent’s base. However, it’s clear that only a select few agents have coherent retention plans. Most are so focused on acquiring new business that they don’t pay much attention to business that’s falling away.
Nevertheless, agents are fiercely protective of their customer base and rarely want anyone to initiate dialogue without their oversight. If the carrier isn’t respectful of this relationship, a well-meant attempt to renew a customer could upset the agent, the customer, or both, and result in the business being moved out of spite.
We should all be able to understand the logic behind a carrier wanting to have a hand in retaining business it has, but too many carriers try to pursue renewals under the agents’ radars; without a doubt, there is fact behind agents’ fears that these renewals will end up removing the business from their base.
I would like to see some written ground rules, perhaps even integrated into the agent agreements, governing retention efforts. Even if the carrier says agents only get paid on what they renew, I would rather understand that policy clearly at the outset rather than have to battle it out with a carrier after the business disappears.
While I think that master agents and subagents have common interests in this regard, I think there is definitely value that a master agent should be bringing to its subagents in the way of retention management. A good master agent should clearly communicate with its agents the rules governing retention and should talk with the agent if it chooses to proactively perform retention efforts of its own. A good master/sub relationship should involve enough explicit protections and implicit trust that these efforts would be welcomed by the subagent.
What do you think? Are proactive retention efforts by carriers or master agents out of line? Would ground rules make them better or just spark conflicts? Is it ever legitimate for a carrier to remove a renewed customer from an agent’s base?
Josh Anderson is the founder and CEO of Telephony Partners, a telecom master agency he founded in 2002 leveraging engineering and software expertise. He also is a member of the 2008-09 PHONE+ Channel Partners Advisory Board.
