What to Do When The Big Three Beat Your Price

Channel Partners

December 1, 1997

7 Min Read
What to Do When The Big Three Beat Your Price

Posted: 12/1997

What to Do When The Big Three Beat Your Price

Part Two

By Dan Baldwin

As you’ll recall from last month’s column, our long distance
superhero "Dan" was trying to pick up the pieces of a
supposed "slam dunk" $1,500-a-month long distance deal
in which he was saving his prospect an easy 30 percent over a Big
Three long distance carrier (sound familiar?). The deal had come
apart with a one-two "sucker punch" –first from the
customer, who wanted a more detailed proposal and then from the
long distance carrier, which came back with monstrously low

The long distance carrier had quoted rates from its Option S
tariff that were just plain scary because they pretty much
equaled the rates I was proposing that would earn me about 30
percent commission. (Lowering my price more to undercut the long
distance carrier a measly 10 percent didn’t set well with me. I’d
rather sell through for my full 30 percent or not have it at
all!) To truly understand the long distance carrier’s proposal, I
needed to get the entire text of the tariff that was producing
the deal, since the customer contract from the long distance
carrier states that by signing, the customer agrees with the
entire tariff.

The long distance carrier was all but useless in providing the
tariff. Here I was representing the customer with my letter of
authorization, and Ben, the long distance carrier representative
assigned to the customer, could not produce a copy of the tariff
he was expecting the customer to abide by. (In all fairness to
Ben, he did seem to be doing as much as he could given the
limited resources the long distance carrier had given him to work
with–a laptop computer, a phone line and a folding table to turn
his bedroom into his "virtual office.")

It didn’t really matter if Ben did supply a copy of the
tariff, since I was going to need my own independent copy, which
I ordered from ITS (the Federal Communication Commission’s
(FCC’s) contracted distributor of long distance company FCC
tariff filings).

What I got from ITS was exactly what I ordered: "The
current text of section 6.13.4 of the long distance carrier’s
Tariff FCC No. 1, and all applicable promotional sections of that
tariff, and contract Tariff No. 6272 or its successor on file
with the FCC," (as read from the long distance carrier
summary contract the customer was being asked to sign) on a
CD-ROM. (I don’t recommend this exercise for the squeamish, since
it took literally hours to pull the correct information regarding
the specific tariffs off the 100,000 or so pages that are in the
complete FCC No. 1 tariff filing.) Thankfully, the entire text
that supposedly gives the customer such killer rates was only
about 20 pages long.

What I guessed after sifting through all the
"whereases’" and "wherefores" was that the
long distance carrier offered seven different levels in its
Option S tariff, which defined minimum monthly usage requirements
from $0 to $7,000. These seven different levels then could have a
term attached to it from 0 to 36 months. There was one set of
actual rates for any Option S customer, which was then discounted
depending on which minimum usage level or term the customer
selected. (Simple enough so far, right?)

Initially, Ben’s best offer came with a $1,000 monthly minimum
and a 24-month term contract. What I requested no fewer than a
dozen times was the long distance carrier’s best prices that came
without a term or a monthly usage requirement. Ben finally
offered a $200 minimum for 12 months, which, surprisingly enough,
was almost the same as the $1,000/24 contract. When I asked about
the reason for the difference (or lack thereof) between his two
offerings, Ben said that the majority of the discount from the
$200/12 or the $1,000/24 came from the 17 percent and 4 percent
extra discounts (for "Competitive Advantage Offer" and
"International Maxi-mizer") he was throwing in on top
the 30 percent to 37 percent base discount.

"Well Ben," I said, "that all sounds pretty
good, but what I really want is your Level 6 pricing, which says
my monthly minimum commitment is $0."

"Level 6?" was his reply.

"Sure Ben," I answered. "It says right here on
page (Revision 6 effective 6/30/97) that with Level
6 I don’t need a monthly commitment or a term to get 30 percent
of the 37 percent base discount. So what I want is the two extra
discounts of 4 percent and 17 percent you offered with the base
discount of 30 percent and no minimums or terms."

"Well, but why would you want to give up the 7 percent
discount?" Ben responded.

"Well, the difference between 51 percent and 58 percent
isn’t all that great when you consider the fact that we’re
keeping all our options open, wouldn’t you agree?" I asked.

Our little dialogue gave Ben quite a bit to think about. He’d
never played the game this way before. Of course, he said he’d
have to get back to me after he’d talked to his boss or bosses.
Over the next several weeks (I had a lot of other stuff going on
as did the customer, so I didn’t force the issue right away) I
got a lot of ‘That’s not what it means,’ and ‘I don’t think you
can have it that way.’ Ben even pulled me in on a couple of
conference calls with his company’s tariff experts. At every
roadblock I simply asked them to show me specifically where in
the tariff it says I couldn’t have what I wanted (which seemed
reasonable, since I was showing them exactly where in the tariff
it said that I could have what I was asking for). Their last
argument was that they were offering us a "non-tariffed
promotion," which I countered with the argument that
non-tariffed promotions didn’t exist because their company adds
any and all promotions to the tariff on a daily basis (which is
why the thing is more than 100,000 pages!).

They finally agreed I could have what I was asking for.
However, "it" was offered only through the long
distance carrier’s "general market business office" and
Ben was with the "priority market branch," but he could
get it taken care of dated retroactively to our first
conversation. Another week went by before Ben called back to say
the plan we agreed on had a $500 "cap" on it, which
meant that no discounts would be applied to amounts in excess of
$500. I faxed over to Ben the paragraph that clearly said the cap
was $6,000 and not $500.

Finally, Ben faxed over a piece of paper that said he was
happy to announce he’d switched the customer over to his
company’s "Model T" program, which was saving the
customer a considerable amount of money over his previous
contract, with no term or monthly commitment.

I then called the customer with the good news. I said that the
long distance carrier had agreed that the rates were too high and
I was able to have the long distance carrier change the rates
such that the customer was saving at least 25 percent without any
obligation while we concluded our telecommunications evaluation.
The customer was quite happy and I had a little extra time to
construct a viable argument for the customer to switch to my
service. Coming soon – "The Viable Argument."

On a different note: I’m happy to announce that the AgENt
Trade Fair in Chicago was a complete success. The One Plus Agent
Association (OPAA) and Virgo Publishing Inc. (the publishers of
PHONE + magazine) are to be commended for creating the industry’s
only agent trade show. Not only is the show specifically tailored
to the needs of agents alone, this quarterly show comes to you!
Plan to attend one coming to your area and learn "How to
Sell Long Distance & Whose Long Distance to Sell." The
first show was in Philadelphia this past July. The next show will
be in Houston in February, then in San Diego in May. BE THERE!

Dan Baldwin is a board member of the One Plus Agent
Association (OPAA), a nonprofit corporation dedicated to agent
professional development. He can be contacted at [email protected].
Support the agent marketing channel by joining OPAA as an agent
or vendor member. Call (619) 685-3465 or surf http://www.opaa.org today.

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