What to Do About Commissions? Agents Sound Off

Technology advisers are working to diversify and safeguard their sales commissions.

Commissions are the lifeblood of the indirect business technology sales channel; however, they have always come with challenges. Reporting commissions is an age-old problem, but now agents are also seeing price compression shrink what they’re earning on sales.

Hyde Group founder Michelle Hyde, Top Speed Data Communications vice president of technology Allan Jaffe and StratoNet principal owner Christopher Scott will discuss this topic during their “Outlook for Commissions” session at the upcoming Channel Partners Conference & Expo, April 11-14.

Hyde and Jaffe shared some of their perspectives on commissions in this session preview.

Channel Futures: To you, what is the biggest challenge associated with commissions in the agent channel?

Hyde Group’s Michelle Hyde

Michelle Hyde: The biggest challenges are tracking commissions and assuring billing accuracy. In addition, partners struggle with aging tools, inferior or inconsistent reporting from distributors and suppliers. Moreover, there are no “best practices” in the industry.

Distributors are rarely allies and are less incentivized than you would think to chase down the errored/delayed money. If the commission isn’t five figures, they don’t want to tackle the issue.

There is also attrition and write-down of revenues on some products. Lastly, varied and fragmented commission models exist in today’s landscape based on various channel partners that are in the marketplace today.

Top Speed’s Allan Jaffe

Allan Jaffe: I think the biggest challenge hasn’t changed in my 22 years in the channel. It’s confirming the details and accuracy of commission statements. Not all providers and billing systems are equal.

CF: What’s one way you’ve seen partners (or you personally) try to deal with the problem of shrinking commissions?

MH: The short answer here is “sell more stuff”: sell more sticky, sell more term deals, sell more to existing clientele or new ones.

Other approaches to deal with shrinking commissions are renegotiating splits, taking business to a direct contract with suppliers and adding complementary business lines (consulting, support, installation/project management services). Other solutions include aligning/selling with tech-adjacent partners, aligning/selling with competitors that don’t offer what you specialize in, and developing a systematic marketing approach.

AJ: Commissions for voice and data transport services have been declining for several years. The best way to combat shrinking commissions is to pivot to cloud services; SaaS, DaaS, SECaaS, DRaaS, CCaaS, etc.

CF: What’s one thing you hope people take away from your session?

MH: There is a patchwork of solutions here and oftentimes various components and creativity are needed to retain and thwart loss of revenue, commission issues and spur business growth.

AJ: The channel has always been about being the client’s trusted adviser. As long as we don’t lose sight of that, we can continue to earn a living in this industry.