New exclusivity rules, reduction of commissions worry sales team
A proposed contract that could force Verizon Business agents to represent the carrier exclusively has some legacy MCI agents worried about the future of their businesses.
Six master agents who spoke to CRN on condition of anonymity said the new contract is due within a month, and it will likely pack more than just a requirement that top-performing agents sell only Verizon products. The new rules of engagement also will reduce commissions paid to agents when their customers renew service by as much as 60 percent of what was paid when the customer originally signed, and it will raise the sales quotas that must be met to remain a Verizon agent and maintain residual earnings, each of these sources said.
Moreover, the proposed new contract will require agents to hand over accounts that bring in more than $20,000 a month to Verizon Business’ direct sales team, the sources said. Language that traps sub-agents into exclusivity also could be part of the new agreement, sources said.
A Verizon Business spokesman said in an e-mail that the carrier could neither confirm nor deny the preliminary details of the pending new contract as outlined to CRN by the master agents.
“Verizon is working with agents who want to represent us on the terms of our working agreements. This is part of our continuing effort to maximize the value in our relationships with the agents and the delivery of our services to our end-user customers,” the spokesman said.
Verizon has traditionally required many of its Platinum Level agents to be exclusive in return for granting them higher commission rates, said a top-selling legacy MCI agent, who explained that being pushed outright into this model would amount to “taking away our right to work.”
An exclusivity clause is unnecessary because Verizon’s “superior network and superior products” are reason enough to lead with Verizon services, one master agent said. The planned increase in sales quotas could achieve the same effect as an exclusivity requirement, he said. “If you tell me I have to sell $500,000 a year, you are pretty much making me near-exclusive,” he said.
One master agent said it is considering a possible legal response to the new contract terms under discussion. Another said it has considered partnering with a second master agent. Under such a partnership model, one agent would agree to exclusivity and the second would take a role as a sub-agent and transfer all existing contracts to the master agent, which could use them to meet increased quotas. The sub-agent would continue to work on non-Verizon orders on behalf of both.
The master agents that spoke with CRN said they are in crisis mode because they believe Verizon Business is not listening to their feedback. As the contract discussion continues, Verizon Business has severed hundreds of agent agreements in the past several weeks using termination letters that one
master agent said were worded in a way that made it clear the fired agents’ residual compensation was being cut off.
Indeed, sources said the partner-friendly attitude that MCI brought to Verizon
following the merger of the two carriers has disappeared now that the last of the MCI channel group, director of channels Tony Bloom, has been reassigned. Bloom did not return calls to his office or cell phone. Verizon Business’ partner program is now run by Rose Kirk, but Verizon Business did not provide information about Kirk or her background. Some partners who attended a recent Verizon Business event held in Miami for its top master agents of 2005 said Kirk left a bad first impression.
“She runs her program by authority. And she’s in over her head. Now that Bloom is gone, it’s all Verizon, and when has Verizon ever been good to agents?” said one source who attended the Miami event.
Frank Moynihan, president of Gryphone Telecom Consultants, a legacy MCI master agent in Braintree, Mass., who was at the Miami event, said he should not be faced with making an exclusivity decision because he processes Verizon orders through another master agent as a non-registered sub-agent.
But there was wide disagreement between the master agents who spoke to CRN as to how sub-agents will be dealt with under the new contract. One source said Verizon Business plans to word it to require that sub-agents also be exclusive. Another source, however, believed that sub-agents could sidestep that requirement.