One Source Communications CEO: Ops Focus an Edge in Agent M&A

One Source Communications leaders say agents who sell their businesses to them can solve the ever-present challenge of customer retention.

Greenville, North Carolina-based One Source captured media attention for its publicly announced acquisition of technology advisor Sumo Communications, but CEO Tim Meng said One Source has been quietly moving forward with agent M&A for multiple years. And in a time where multiple strategic buyers are vying for the attention of technology advisors, One Source leaders say their model compares very differently.

One Source Communications’ Tim Meng

Specifically, they say the company tends to emphasize upfront, one-time purchases of an agent’s book of business. These deals typically don’t involve the agent owner joining as an employee. One Source seeks to quickly take on an agent’s customer base, allowing the seller to retire or start rebuilding a new base. In the meantime, One Source leans on its operations resources to maintain those monthly recurring commissions and potentially layer in its own billable services.

“For us, buying the agent is not the endgame. Buying the agent is a step so we can better serve the customer that comes through that acquisition,” Meng said.

Operations Focus

One Source in many respects defies categorization. The company provides managed IT services, but executives lean away from lumping it in with the traditional managed IT services provider. The company also possesses a sizable agent business, but its emphasis on life cycle management and day-two support make it different from the traditional agency.  Meng said about 90% or more of One Source’s approximately 300 employees work in production or operations.

One Source’s Zach Kahane

“We are a customer-first, and, frankly, an operations-centric organization,” Meng told Channel Futures. “We realized that in order to be a prominent and successful agent – or any evolution of agency – simply selling is not enough. You’ve got to do the real work to keep the customer.”

Meng and Zach Kahane, director of corporate development for One Source Communications, sat down  with Channel Futures to explain One Source’s business model and acquisition strategy. They also shared their research on the challenges agents face in retaining customers. The conversation is in the slideshow above.