CenturyLink Partners Get New Incentives as McBain Evaluates Recession

CenturyLink partners can tap into more incentives as 2020 nears an end.

The carrier says it is extending its incentives from the first half of 2020. CenturyLink partners can earn additional payouts by selling in five specific categories. Those qualified opportunities include the CenturyLink Engage communications portfolio, SD-WAN services and the CenturyLink Digital Business Bundle. They can also earn an incentive from selling to new customers in target markets or through deals over $25,000 in monthly recurring revenue.

CenturyLink executives shared the information during their keynote at the TBI Big Event virtual conference.

The company has juiced up its large-deal incentive, doubling the payout. CenturyLink partners can earn $40,000 on qualified billings of more than $100,000 in monthly recurring revenue. The increase fits well with what CenturyLink channel leadership has been communicating about scaling. The company’s vice president of North America and public sector recently vowed to drive “larger strategic deals” on the partner side.

CenturyLink’s Sam Sundstrom

“We want that large deal business,” said Sam Sundstrom, a CenturyLink marketing director. “We’re putting our money where our mouth is, doubling those incentives.”

Partners can also stack incentives. For example, they could earn three incentives by selling a large deal that includes SD-WAN and the Digital Business Bundle. The payouts require a two-year contract minimum.

Recession Projections

The COVID-19 recession could mirror the 2008 recession, says Forrester’s Jay McBain.

Forrester’s Jay McBain

McBain shared two forecasts about how economic recovery will impact the channel. Scenario A anticipates a V-shaped recovery, in which pandemic-related and economic circumstances improve in the fourth quarter. That scenario sees just 10% of partners entering “unrecoverable financial distress.”

However, the chance of that “best-case” scenario is now just 10%.

On the other hand, Forrester’s second projection of a mid-2021 recovery anticipates 25% partners going into the red. 2020 technology channel revenue would drop 11.8%, according to Forrester.

McBain compared scenario B (which has a 70% probability) to the 2008 recession.

Yet McBain says channel impact varies drastically depending on where you look. While hardware sales are hurting, recurring revenue models have declined less than 2%..

“Twenty years ago we thought [recurring revenue] would be a resilient business model, and through a pandemic it’s proving true,” he said.

Customer verticals make a big difference as well. McBain says partners focused on retail and hospitality clients could be struggling, while those serving government and technology customers are enjoying an uptick.

“It is a tale of multiple cities here,” McBain said. “It’s a very personalized thing. It’s not across-the-board in this industry.”

He outlined Forrester’s scenarios in a blog earlier this year.

New Normal

McBain said March and April formed a “triage stage,” in which customers turned to the channel for short-term help. Seventy-two percent of the channel saw an uptick in business during the triage stage.

But now many major projects are on pause as customers try to rationalize their budgets.

“No one is going to sign a multimillion-dollar managed services agreement at the moment. No one is signing multimillion-dollar transformations with Accenture or Deloitte at the moment,” McBain said. “But there are very focused areas where they are looking to spend money, not only in survival mode, but looking to thrive through the second part of this crisis.”

He pointed to automation, digital transformation initiatives, tactical business consulting, and security and compliance as opportunities.

McBain serves as principal analyst of channel partnerships and alliances for Forrester. We covered his presentation at the Wildix UC&C Summit earlier this year.

Read our report from day one of the TBI Big Event.