Agency vs. Direct Sales Model

By Greg Howard, Co-Founder, US Telecom Group

It’s funny to think I have been in this business since 1991. I first started out selling New England Telephone 800 service and Centrex and WATS lines for SNET. Now, I can represent any carrier out there through my own agency, US Telecom Group.

When I worked for the direct sales force side, I was highly trained on the products and services of that particular company and its products. I was given a desk, computer (sometimes) and a phone (always). I was then sold on the value of our products and services over the competitors. I was given the juice. And like all good direct sales people, I drank the juice. Our company’s products and services were superior to the competitors.

Fast forward 13 years to 2005 when my partner and I started US Telecom Group. We now have the ability to sell any carrier we choose. This ability to sell multiple carriers feels so refreshing and gives us the ability to do what is right for the customer. This newfound feeling gives me the hindsight to understand how it really worked as a direct sales rep.

Looking back, as a direct sales rep, I usually had a monthly quota and a manager always on me to get that “nut” done. My quota rolled up to the manager who then had to answer to someone else and so on and so forth. It was a never-ending battle. Our product was always the best because I had no other choice. I would bash the competition because I wanted that sale.

Toward the end of the month, extra cash was always thrown at the customer if they bought this month. Customer care issues during the last week of the month would go close to untouched because we had a quota to make. If I did handle those care issues and our manager found out, it was not going to be pretty because the manager would then use the “your job is on the line if you don’t make your goal” line. It was a gut-wrenching time.

Then when I came through and made my quota – usually a few days after the end of the month – the cycle started all over again. The slate was wiped clean and I would be in sales meetings committing to the next month’s sales forecasts — forecasts that could always be increased but never lowered.

Then came commissions. I usually got paid upfront commissions only, so when I finally got paid on the sale, the customer care ended. I referred customers to the 800 number — not quite the personal attention I once promised them.

Why would I do this? Because it was a new month and there was nothing on the board yet. I didn’t want to get fired, so I needed to get out there and sell something new. The cycle began again.

This is the life of a direct sales rep.

I truly believe the above is no fault of mine or any direct sales rep. It’s the result of the direct sales force business model of always hunting for new business.

If more carriers would adopt a residual-based commission model on the direct sales side, they may retain sales reps longer and allow for much lower churn. If coupled with an obtainable quota, this may allow for a very powerful business model. Until the carriers change their business model on the direct sales side, my agency – and others – will continue to have the advantage of carrier-neutrality and personalized customer care. Happy selling!

Greg Howard is co-founder of US Telecom Group, a telecom agency, that offers a full portfolio of voice, data, internet services and wholesale electric. The company focuses is on government, non-profit, educational and enterprise accounts and specializes in managing multilocation, multibill, multicarrier accounts. Prior to co-founding US Telecom Group in 2005, Howard spent 15 years in various positions in the telecom industry. He started his telecom career with CTC selling RBOC products nationwide, then held both sales and management positions with Network Plus before running Nextel’s Government Sector as a senior government sales manager in the New York market. He also is a member of the 2009-10 PHONE+/Channel Partners Conference & Expo Advisory Board.