The Channel Scores: American Express Teams With PlanetOne

By Khali Henderson

Most telecom agents relationship with American Express, if any, consists of paying off their charge card balance every month. But for one agency, PlanetOne Communications Inc., that changed on Dec. 1, 2010, when it became the exclusive master agency for the financial giants new offer, American Express telecom services.

In fact, PlanetOnes CEO Ted Schuman nearly missed the invitation to bid on the opportunity by assuming the e-mail from American Express was a customer service inquiry. What stood out in the e-mail was that [the author] wanted to coordinate a meeting at Channel Partners [Conference & Expo] in Washington, D.C., at the Gaylord National,” Schuman said.

That e-mail and four others sent to the nations top master agencies marked the beginning of a whirlwind race to win what is one of the most prestigious partnership opportunities to come the telecom agency channels way in its 20-year history. At the face-to-face meetings, each master agent was given an RFP with 48 hours to turn it around.

I was very concerned that I would not meet the time frame,” Schuman said I still had to fly across country [from D.C. to Scottsdale, Ariz.], get home … after being exhausted from the Channel Partners event and then put together a very, very in-depth and comprehensive review of PlanetOne from the professional and financial perspective and submit it by 5 p.m. ET on that Friday.”

Schuman hand-delivered his proposal to the American Express offices in New York and presented it to Jay Cary, American Expresss vice president of global interactive and Business4Business, and his team in person. I literally did a U-turn here in Scottsdale,” Schuman said. I flew back from Channel Partners and was on the ground and had three hours of sleep over a two-day period, got back on a jet and headed to Manhattan to present a piece of my offer that I hoped would stand out and make a difference. Hindsight being 20/20, I think it did.”

Schuman won the bid and signed the contract in mid-November. Cary said a combination of PlanetOnes 17 years of experience, broad carrier portfolio and business approach sealed the deal. Ted and team had a good fit with the American Express culture and values, which was fundamental in a choice of partners,” Cary said.

Under the unprecedented agreement, American Express is providing marketing services to generate sales leads among midmarket companies, which it provides to PlanetOne, which, in turn, works with the prospect to determine their telecom needs and identify the appropriate carrier solutions. The services are marketed as American Express telecom solutions powered by PlanetOne under the new American Express Business4Business portfolio. Terms of the deal were not disclosed.

Its a dream come true for a small business owner,” Schuman said. I am honored. I am committed to working hard and making this a huge success.”

For PlanetOne, the deal clearly is like winning the lottery, but it also is significant for the telecom agency channel as a very high-profile validation of the model.

When a company like American Express reaches out to the channel, it demonstrates the independent consultant approach that partners bring to businesses and providers alike,” said Blake Wetzel, vice president of sales for the Qwest Business Partner Program. As the only Tier 1 provider in PlanetOnes program, QBPP is excited to see the innovation that a deal of this nature represents.”

In addition to its customary pre-sales support, Qwest has made available four compelling solutions-based bundles that include a range of data-networking and voice solutions to meet customers business needs,” Wetzel said. Qwests and other carriers attention to the American Express deal is one testament to its significance.

I think its an eye-opener for carriers on a certain level because this adds a large sense of legitimacy to a channel that has been looking for a validation stamp for many years,” Schuman said. He also said its a door-opener” for the channel since American Express will be creating awareness of the consultative agency model among midmarket companies across the country.

A centerpiece of the American Express Telecom Solutions offer is the traditional agency value proposition: free expert telecom consulting. If we are doing our jobs, we are a client advocate and carrier agnostic,” Schuman said. Sometimes the value proposition and the marketing will be about having a single point of contact or a free bill analysis  thats playing to the strengths of any agent in the channel.”

Cary, who leads the Business4Business initiative at American Express, confirmed this intention:  We are looking at industries where we can bring support in the purchasing process, where we can be a navigator and advocate.”

That is an overarching goal for the Business4Business portfolio in general and telecom solutions in specific. Business4Business is a new initiative within American Express Corporate Services division, which offers expense management and business products as well as commercial cards and travel services to medium and large corporations.

Telecom is the first non-financial service to be offered through Business4Business though others are planned, Cary said. Presently, expense management and payment services are offered. (Some non-payment products are offered to small businesses through another division.)

American Expresss interest in telecom was not by whim or accident. The company fielded a research study in August 2010 that found that telecom services  landline phone, wireless phone and data/Internet  are one of the top pain points for middle market companies. Specifically, it learned that selecting and managing telecom services can be confusing and time-consuming, and pricing can be unclear (see Making the Business Case, following conclusion of article).

We started to understand that the executives in those companies were very good at running their businesses, but they were also being tasked with making purchasing decisions and they had limited experience in that,” said Cary. More often than not, they were just Googling suppliers and not going into the level of comparison shopping research that we can bring to the party. When they did have a deal in place, they were too small to negotiate the kind of pricing we thought we could help with.”

Telecom started emerging as one of the more confusing and time-consuming services to buy. We also started to see that the costs for telecom were lacking in clarity. Also, the industry is fairly complex. Coming from outside, its a little confusing for us  or it was at the beginning  to understand MPLS or T1. There is a lot of terminology that doesnt talk to the non-professional. We wanted to see if we could come in and simplify things, act as an advocate for middle market companies and act as a navigator.”

So why not become a telecom agent? Cary explained that American Express did not and does not want to be an agent. But, its also legally barred from doing so because it is a bank holding company. To that end, its relationship with PlanetOne is not as a subagent.

American Express is responsible for the marketing with the end prospect or customer,” Cary said. We pass the lead to PlanetOne. PlanetOne is fully responsible for working with the customer to determine needs and finding the right carrier for them and walking through that sales process.”

PlanetOne has dedicated a team  presently three people  that will be handling the American Express program exclusively in-house. No subagents will be engaged in the program at least initially. As this expands and grows, we are certainly not closed to the possibility of bringing in a subset of the subagent network who we can trust to meet our level of service,” Cary said.

However, he noted that PlanetOnes proposal to manage the business entirely in-house was a differentiator. Ted proposed a model that was very good model for getting us up and running very quickly and it differentiated him, frankly, from a lot of other people in the industry,” Cary said.

I felt from a quality of service and a process and a control mechanism, it would be best to completely manage the program in-house  at least to get the program off the ground,” Schuman said, noting American Expresss reputation for service.

In fact, Cary said maintaining a high level of service is critical to the company as it works with partners. It has gone so far as to put PlanetOnes team through American Express training. And, Schuman said his contract specifies SLAs with details on turnaround times for answering calls to turning around proposals. It might sound silly to most people, but its the basic things like that that make them such a fantastic customer care organization,” Schuman said.

PlanetOnes systems and processes already are being put to the test. American Express initiated a mailing and telemarketing campaign to select customers Dec. 1. Two weeks later when Cary spoke to Channel Partners, he said that appointment setting was exceeding expectations. Schuman said the prospective deal size also is coming in at three and four times what they planned. Cary noted that the program targets companies with monthly telecom spend of $500 or more.

Given the fact that we are doing this at the end of the year around the holidays and getting this kind of excitement is testament to the brand and the market opportunity American Express identified,” Schuman added.

Cary said that American Express will measure the success of the program by surveying customers about how well their pain was resolved, the number of customers helped and the revenue numbers. Of course.

Making the Business Case

In advance of marketing telecom solutions, American Express fielded a research study that found that telecom services  landline phone, wireless phone and data/Internet  are one of the top pain points for middle market companies. Specifically, it learned that selecting and managing telecom services can be confusing and time-consuming, and pricing can be unclear.

The survey polled senior leaders from approximately 600 U.S. middle market companies (with annual revenues between $4 million and $250 million) and asked them about a range of purchasing decisions and business issues. Participants did not know American Express was sponsoring the study. It found:

American Express also interviewed a number of decision makers to obtain more in-depth insight into their buying processes and how middle market companies feel about purchasing telecom services. Interviewees indicated major challenges buying telecom services, and described it as a time-consuming and complex process that normally takes them months. In particular, they said pricing for telecom services is often confusing and unclear. Those interviewees also said they often resort to using search engines to source providers, as they don’t have time to navigate the complexity. Finally, they said they feel lost in the shuffle among vendors  they’re too large to be a small business account and often too small to garner enterprise-level treatment.