3 Big Mistakes New Agency Owners Make

People launching a channel partner business can cost themselves thousands of dollars in mistakes.

So says Ashley Rowland, founder of the agency Adaptiv Advisors and the partner education platform Recurring Raise. Rowland, who left direct telecom sales in 2019 to form her own business, launched Recurring Raise to help new agents avoid the pitfalls she encountered.

Recurring Raise’s Ashley Rowland

Rowland said many of her peers from the direct sales world tell her they would love to launch their own firm. The vendor-agnostic agent business model appealed to her when she was selling for a carrier.

“You’re really excited to jump in and go sell from all of the different vendors. You have unlimited territory. You can sell anywhere, and an unlimited solution set to offer. And so you jump in, and you’re all excited about that,” she said.

But entrepreneurs who enter the agent channel find the industry more convoluted than they expected. They must sort through constant messaging bombardment from prospective vendors and distribution partners and determine where to focus their time and energy.

Rowland shared three costly mistakes that she and other agencies make.

1. Not Interviewing and Negotiating with TSBs

Technology solutions brokerages (formerly known as master agents) play a necessary role in providing agents a line card of technology suppliers. Some partners view them merely as a clearing house for their commissions, while others count on them for sales enablement and back office support.

Rowland said new agency owners often don’t do their due diligence in selecting the right TSB for their business. Rowland, who holds agreements with five different TSBs, encourages partners to interview prospective TSBs. You’re interviewing them — not the other way around.

Rowland suggested several key questions.

The first revolves around supplier agreements. Which agreements does the TSB hold? Moreover, do they partner directly with the vendors, or are they themselves subagents?

“Are you a middleman? Or are you direct to the vendors?” she said.

Second, ask the TSB about its tools. For example, Rowland said she couldn’t do business without her fiber lookup tool.

Third, who are the people that comprise this TSB?

“A lot of times a channel manager will recruit you, but they’re just a recruiter,” Rowland said. “So you want to know, who’s your point person? Who are you going to be talking to? Do you even vibe with them? Are they an experienced person?”

Privacy is another differentiator for Rowland.

“Do you give out your agents’ phone numbers and emails without their permission? Because that happens to me, and it’s really annoying,” Rowland said.

In addition, it’s good to ask the TSB for a referral from one of their agents.

Agents should also be negotiating with prospective TSBs. That means ensuring evergreen commissions and even negotiating higher commission rates. Remember that your services …

… are in high demand. What is the TSB going to do to earn your business?

“Agents don’t know that they have the power to negotiate,” Rowland said. “They do. It’s competitive.”

2. Talking to All the Vendors

Rowland said vendors take an aggressive, and at times borderline predatory, approach to sales outreach. Vendors will call her saying that a TSB gave them her information. In other cases, a vendor will simply send a calendar invite for a meeting. The sense of entitlement is palpable.

Many agents oblige and run the full gamut of meetings. In some cases, they do so because they want to do everything they can to grow their technological expertise. In other cases, they’re looking for free stuff.
“We all know which agents are not going to be successful. It’s the agents that show up to every vendor presentation,” Rowland said. “They know there’s like a free iPad and Amazon gift card giveaway. They’re there to try to try to win the free stuff. They show up to every single meeting. Those are not the heavy hitters.”

Rowland came to the conclusion that she couldn’t give her time to the endless parade of channel managers. She needed to focus on her business and her customers. That meant saying no.

“It’s actually difficult to reject people at first, because you want to be kind, and you want to be generous with your time, and you understand the hustle that they’re going through. But I make it really simple. I just say, ‘Sorry, I can’t meet with you. This is a decision that I’ve made for my business. It may be different in the future, but at this time, I’m not meeting with any vendors,'” she said.

Rowland said this is where the TSB comes in to help. When her customers need a technology that she doesn’t know well, she’ll ask a channel manager to recommend a few suppliers.

“It’s their job to be the expert on the vendor,” she said. “It’s not my job to be the expert on the vendor.”

Rowland said many agents enter the channel anticipating that they’ll maintain dozens and dozens of ongoing, direct relationships with vendors. During early days of her business, she debated signing direct agreements with them. But ultimately, the protection TSBs provide around supplier agreements cemented their value to Rowland.

“Their legal team is better than my legal team. They have already ironed out all the agreements. It would be much less likely that a vendor would stop paying them than stop paying me. It would be easy to stop paying me, especially if I have one or two deals with that vendor,” she said.

3. Getting Distracted from Your Core Business

Rowland added subagents during the early days of Adaptiv Advisors. She bought an advertisement and hired 11 contractors to do cold calling.

However, the vast majority of them didn’t do the work. Rowland said she realized she was trying to grow before she was ready to grow. New agencies can’t afford to put the cart before the horse. And that horse is the relationships you build with your customers.

“I should have been spending my time automating my sales funnel, building relationships with people that can refer business to me and really just focusing on my customers.”