When Worlds Collide: Telco Agents Selling Managed Services

**Editor’s Note: This session preview originally posted ahead of the scheduled Channel Partners Conference & Expo in March. After the world’s largest channel event was postponed due to COVID-19, we repurposed this session for Channel Partners Virtual, Sept. 8-10. TPx’s Jared Martin will present this program with a panel of industry experts, Tuesday, Sept. 8, at 12:10 p.m. ET.**

Telco agents and MSPs seem, on the surface, to operate in completely separate worlds. They have different financial models, sales compensation strategies and client conversations, not to mention different approaches to IT. 

But many agents are looking toward managed services to up their recurring revenue and create ongoing stickiness with their customers. This pivot sounds great in theory, but in practice, it can be almost impossible to figure out on your own. Fear not, it can be done, even in a COVID-19 world.

TPx’s Jared Martin

At the upcoming Channel Partners Virtual, agents who have “been there, done that,” will explain how. Jared Martin, vice president, MSx managed services at TPx Communications, will lead these experts in a discussion entitled “Agents Can Sell Managed Services. Here’s How,” Sept 8, to lay out how to integrate managed services into your existing agent business model.

Last February, Channel Partners spoke to two of the three original panelists scheduled to speak at CP Expo: Matt Kanaskie, vice president of sales operations at Marco Technologies, and Nancy Ridge, founder and president of Ridge Innovative, as well as moderator Jared Martin to get the scoop. Though only Martin is confirmed for the Channel Partners Virtual panel, all have great insight into managed services and the agent community.

We have edited the answers for length and clarity.

Channel Partners: What are the two or three biggest takeaways you’d like to be conveyed in this discussion? 

Jared Martin: Agents not selling managed services are leaving money on the table. Managed services is where it’s at – for instance, the majority of TPx revenue now is from it, even though traditionally we were telecom only. The second part is that real growth begins at the end of your comfort zone. Managed services offer higher margins, thus higher revenue. And third, It is critical you choose the right partner.

Marco Technologies’ Matt Kanaskie

Matt Kanaskie: It will be important to convey the different methodologies of offering managed IT services, the definition of managed services in general, and the value of consuming managed IT services to customers.

Nancy Ridge: Regardless of what our particular circumstances are, or where we are in our digital transformation journey, the key is developing a growth mindset. With that, any hurdle can be overcome.

CP: Can you elaborate a bit on the differences between telco agents and MSPs, and how agents are looking toward managed services to up their recurring revenue and create ongoing stickiness with their customers?

JM: Customers nowadays want a one-stop shop, so agents are forced to get outside their comfort zones and add managed services to their portfolio. It is also a fast-growing field with good margins, so it is a no-brainer for agents to start offering it. The best agents know to sell the benefits – not the technology – to go to their existing customers first, and not be afraid to ask questions.

MK: Telco agents traditionally have focused on and sold products adjacent to telecom and ISP services. MSPs traditionally have focused on and sold products adjacent to IT infrastructure and hardware/software. 

As for agents looking toward managed services, there are a few key reasons: guiding client wallet share and mindshare of addressable IT budget; increased MRR capture rate per transaction, higher ARPU (average rate per unit); defensible strategy for long-term client retention; future lead source for enhancements and technology road map; and to gain insight, analysis and data to drive better solution outcomes correlated to their sales efforts.

NR: Telecom partners are comfortable with using technical resources from service providers to sell and support services to their customers. MSPs are much more independent and are comfortable when …

… they are fully knowledgeable about and can control how their customers interface with a product or service. From this perspective, the telecom partner has an advantage, as selling managed services can be added to their existing portfolios. Yet from another perspective, the MSP often brings knowledge and experience as to how viable a managed service solution is; they can also more quickly qualify the providers, so from this perspective they hold the advantage.

Ridge Innovative’s Nancy Ridge

CP: Can you elaborate on how the pivot can be difficult, but that it can be done? 

JM: Agents may not ask themselves the right questions before getting started, or not properly define their strategy, or they may choose the wrong vendor. They need to be able to determine what they can and want to handle in-house instead of outsourcing. Oftentimes, agents start offering managed services only to find out it’s too time-consuming or cumbersome to handle on their own. Many are also reluctant to sell what they don’t feel 100% confident in, believing they have to be experts. 

But, the right partner can assist where they don’t feel as confident. We often hear “it is easier than I expected to make money with managed services” after the initial sale. We have worked with many agents who have made smooth transitions from being telco-only agents and who now primarily sell managed services.

MK: The pivot is difficult, admittedly, but it is possible. I have a higher success rate converting telecom sellers to IT than vice versa. By knowing telecom, they already understand the more nuanced industry and IT becomes more clear. Focusing on client outcomes, business challenges, technology relevance and IT efficiency is really the transition in the sales process. 

There is less focus on product and features, as well as on pricing and cost reduction/savings. Generally, managed service providers don’t save money, they add efficiency and deliver outcomes so the customer makes more money at their core business. We also enable the customer’s IT staff to focus on strategy and elevate their business acumen, while taking care of the redundant and rudimentary tasks that don’t generate revenue. Telecom has traditionally focused on saving money, increasing speed, offering more for less.

NR: The pivot can be difficult if one maintains a fixed mindset, i.e., “I’m a telco agent” or “I’m a hardware guy.” Once the growth mindset is embraced, it becomes a matter of education, network expansion and taking some risks. As in any new endeavor, change is easier when undertaken with others who are going through the same thing so it’s good to be a part of an active peer group and willing to ask for help. Understanding that many customers are in the same situation with even greater pressures due to internal politics and set corporate cultures that in themselves can be difficult to pivot from, can set better expectations and offer a framework for being a true resource to our clients.