Master Agent Recovers Millions In Lost Commissions For Solution Provider Partners

The age-old issue of lost or underpaid commissions still plagues partners, but some master agents are taking proactive steps to uncover payment errors by carriers. To date, master agent Sandler Partners says it has recovered more than $2 million for its solution provider partners.

Telecom solution providers or agent partners frequently face compensation issues with their monthly recurring revenue through no fault of their own. Payments sometimes fall through the cracks because of vendor acquisitions, new services being added to existing accounts and misunderstandings about renewed contracts. Partners then have to bring these errors to the attention of their master agent partner or to the carrier directly.

Instead of focusing on consulting and selling, solution providers big and small often are tasked with having to work for their commissions twice -- first when selling to the customer, and again when they have to track down the lost or underpaid commission, according to Alan Sandler, founder and managing partner of Sandler Partners.

[Related: CRN Cloud Services Roundtable: Where Is The Biggest Cloud Opportunity For Solution Providers?]

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Hermosa Beach, Calif.-based Sandler Partners put in place a formal program to remedy the commission error issue in 2013. The master agent's Commissions Integrity Program consists of eight dedicated, in-house commissions department staff members that are each responsible for tracking different carriers. These Sandler employees run monthly audits on commissions, open up trouble tickets and follow up on missing payments for its agent partners.

The Commissions Integrity Program has so far tracked down more than $2 million in commission and SPIFF payment errors and has returned those dollars to about 1,000 of its solution provider partners, Sandler said.

One Sandler partner that has benefited from the program is telecom agent Network One Solutions. Sandler recovered several thousands of dollars owed to the Newport Beach, Calif.-based solution provider from one of its large customer accounts, said Michael Stevens, president of Network One Solutions.

"Sandler reached out to us and told us they found back commissions we were owned from a carrier. It was just pennies from heaven for us, [and] it's good to know Sandler has our back," Stevens said.

Network One also has its own network of subagent partners, so lost or incorrectly paid commissions affect its partners, too, he said.

In the past, Sandler Partners would follow up on a partner's request to investigate a lost payment or commission error after the solution provider discovered the mistake, a practice that many master agents and distributor partners have in place today, Sandler said.

"We were noticing that as carriers get larger, they sometimes have trouble with provisioning, and have trouble on the backside with commissions. As we started to open these trouble tickets, our team noticed some trends," Sandler said.

These trends include carriers' not tagging an agent to the account or not paying a partner when the account auto-renews, or partners' upselling a new service within an existing account, but then not receiving payment for the additional service. Today, when Sandler's commissions department notices any of these conditions when an order is turned in by a partner, the account is tracked.

In addition to these trends, Sandler said, there are still a large number of channel partner accounts that are simply underpaid, paid incorrectly or dropped entirely by carriers for seemingly unexplained reasons.

Network One has a very large client base, making incorrectly paid commissions on the part of the solution provider's carrier partners a common -- if not monthly -- problem, Stevens said.

"This service is valuable, and it's provided at no charge to us, which makes this a true partnership with Sandler," he said.

Several competing master agents today are also uncovering commissions errors for their solution provider partners. Malibu, Calif.-based WTG; Petaluma, Calif.-based Intelisys; and Sandy, Utah-based Telarus have systems in place to actively monitor and look back at accounts and commission flows.