PHONE+ Asks: Should Channel Partners Diversify or Focus?

The industries of service providers, computer support and telephony equipment have effectively merged into a single industry. Channel partners, VARs, system integrators, interconnects, phone system dealers, structured cabling companies and other related businesses now are having to cross over the once clear lines of business. There will likely always be specialists in every industry including ours, but for many channel partners the question is not should they diversify, but how can they effectively diversify. In order to survive, channel partners will need to do more than circuit slinging to stay in business tomorrow.
Clark Atwood, vice president, Concierge Communications, master agent

I believe agents/channel partners should diversify and expand their sales portfolios through partnerships, mergers or acquisitions. It is no different than a large corporation merging, acquiring or partnering as they realize as does any good business person that the decreased opportunities based on businesses failing versus succeeding means less opportunity, e.g., cash. With that said, agents as a whole need to embrace change, which is reflected through an increase in per-client revenue, streamlined back-office support and expanded footprints. Many agents/channel partners might ask why not stay with what your good at (WAN consulting, LAN consulting or equipment sales)? Its simple: through partnerships and the right merger or acquisition, they will have a much stronger sales organization/position and support staff than if they kept moving along as a standalone agent or small agency.
Randy Jeter, partner and lead consultant, Premiere Worldwide, broker

The most successful channel partners I have known have a core expertise and focus their energies on that. The focus may not be a particular product; it may be a philosophy such as providing great service or being a one-stop resource for all things telecom, but in todays world expertise is valuable. That being said, I believe that diversification is also possible within that context either through successful collaborations with other experts or by taking on a new product or service that has clear alignment with the core competency. When the vision is clear, its easy to make these distinctions and serve both ourselves as well as our customers.
Nancy Ridge, vice president, Telcombrokers, master agent

Agents owe it to their customers, employees and themselves to continue to evolve through diversification, as the business environment changes. At Outreach Telecom and Energy (formerly KeaneTel), our year-old metamorphosis is driven with an eye on product diversification. While we’ve expanded our product types, its been crucial to our successful growth that we expand into new product areas that are complementary to our core. This prevents us from doing things such as offering products and services for which we have incomplete knowledge and abilities to service. If we go too far from our core services position, we risk offering something that we may not deliver as well as we would like. So, yes, diversify, but do so prudently such that the expansion enhances rather than detracts from the mission.

One last point: an agent, like all businesses, needs to have a mission. If they don’t have one written down, they should do that first. To diversify must be a decision that supports the agents mission. Not just diversification for diversifications sake. Above all, an agent should never diversify because of a single opportunity to sell something. If it doesn’t support the mission, don’t do it!
Peter J. Keane, President, Outreach Telecom and Energy LLC, master agent

Partners should not only consider if they should diversify, but consider what should have laser beam focus. Most partners should look at their customer list very closely and look for trends. Is there a certain vertical we are good at, or over the years have we built a strong base in a vertical? Is there a technology that we really understand or one we should? Now there is an opportunity to dominate that space and be the true expert. With a little market research and some determination a partner could be the go to company for whatever is the focus. Most of us can service just about any type of business, but very few can claim to own a specific target.
Edward Terry, founding partner, owner and LINC director, Expert Technology Associates, agent and phone system dealer

Up Next: Is cloud computing a viable opportunity for the channel? Send your answer to Khali Henderson at [email protected] by Aug. 25, for possible inclusion in the October edition of PHONE+ Asks. Any answer submitted is eligible for publication and may be edited for clarity or brevity.