Agents Face Carrier Quota Quandary

Considering that even a small percent reduction in commission can cripple a telco agent, it makes sense that many of them now feel the need to diversify their services offerings and branch out even further into VoIP and wireless technology.

Verizon and Qwest Communications International—and to a lesser extent AT&T—set increased sales quotas for their agents under the changes to their 2007 partner contracts.

In the case of Qwest, the Denver-based carrier now requires agents that serve its 14-state network to hit a minimum incremental sales requirement of "$40,000 in new booked monthly recurring charges over a rolling three-month window," according to a Dec. 19, 2006, letter to Qwest agents from Tom McGrath, vice president of Qwest Alternative Channels.

If agents don't hit the new minimum incremental sales quota each quarter, they lose 2 percent of all new and recurring revenue on top of a 1 percent across-the-board decrease. The 2 percent reduction stays in place until an agent hits the $40,000-per-quarter quota, according to the letter. Previously, Qwest agents had no quotas to hit.

The 2007 Verizon Solution Provider Program also requires agents to take as much as an 80 percent reduction in residual commissions, and in some instances ends residual commissions altogether when a legacy customer contract is renewed or modified under the 2007 Verizon Solution Provider Program, according to Verizon agents familiar with the program. Also, under the 2007 Verizon Solution Provider Program, agents must increase the size of new service contracts in order to get on-site assistance from the New York-based carrier, agents said.

AT&T, San Antonio, also increased quotas for its partners in their 2007 contracts, said Scott Strochak, CEO of Xtelesis, a Burlingame, Calif.-based master agent for AT&T and other carriers.

To illustrate how even a small percent reduction in commission can impact an agent, take Qwest, for example. If a Qwest agent has a Qwest customer income base of $1.5 million annually, the carrier's new terms can reduce the agent's income by $15,000 a month, or $180,000 a year, according to a Qwest agent that requested anonymity.

Verizon, Qwest, and AT&T declined to comment for this story.