"Thanks! (I Think)": Two Big Commission Changes Announced to Qwest's Partner Program

Posted 5/24/10 By Dan Baldwin, TA Executive Director, 951-251-5155 email

Qwest today announced two partner program changes that will affect commissions of their direct agents - in a good way - in the short run at least.

I had an opportunity to speak with Blake Wetzel, Dale Tucker & Ted Wietecha this morning and drew the following from the discussion.

Change 1:  Beginning with new commissions posted after June 1, 2010, Qwest will rescind the 2% commission deduction imposed a year or so ago on renewed Qwest contracts for existing Qwest customers. While Qwest will not "make good" the "missing 2%" since the deduction was imposed, the two commission points will be paid on all existing accounts going forward where the deduction is currently in place without the Qwest partner having to do anything.

Change 2:  Qwest is creating a new "super" Premier Master Partner level called "Premier Elite". Of the 35 Premier Master Partners currently listed on Qwest's web site, fewer than five currently qualify for the "Premier Elite" level. The revenue commitment to achieve the new Premier Elite status is "significantly higher" that the Premier Master level. Qwest indicates that another five or so current Premier partners may achieve the level within the year.  The benefit of Premier Elite status is higher commissions for in-region Qwest services and other "protections". The increased in-region commissions will be paid only on new contracts and renewed contracts signed after June 1, 2010.

The identity of the new "Premier Elite" partners is not yet public knowledge but the new Premier Elite partners will be authorized to identify themselves publicly as such soon. 

Qwest states that the reason behind these two changes is to "recognize and reward" those partners that have played a key role in Qwest's partner program success as well as to create proper incentives for Qwest partners to maintain and increase their commitment to the Qwest partner program.

My Thoughts on the Matter...

(Note: While I was a Qwest agent many years ago as a result of Qwest buying LCI & USLD, I'm not currently a Qwest agent. Most of my own business is in California where Qwest is not a LEC.)

In an industry of three 800-pound vendors (AT&T and Verizon being the other two), Qwest is by far the most telecom agent and channel partner friendly. That being said, like AT&T or Verizon, they really don't need to be all that friendly - especially in those competitive business situations where they're really the only game in town (where they own the local loop).

So are these two Qwest announced commission changes good?

"Yes!", "Sure" and, "If you say so" depending on your current status as a Qwest Premier Partner.

Free Money is Good!  Giving back the 2% commission deduction agents suffered at the last announced commission change a year or so ago is like getting free money. Period. This is a no brainer. 

More Money is Better!  Stand by for a Qwest in-region renewal avalanche. Let's say you have Qwest customer that you renewed and got the 2% deduction. Not only will you get the 2% back, but if you're a Premier Elite Partner you'll get another 3% if it's an in-region customer. That's a 41% pay raise for getting Qwest in-region customers to renew.

The Rich Get Richer?  The only bad part of all this good news is for existing Qwest Premier Partners that are competing for in-region Qwest sub-agents on commission points alone and are not even close to qualifying for Premier elite status. All things being equal, Premier Elite's will have a 21% "higher commission advantage" over regular Premier Master's when it comes to competing for in-region sub-agent orders.

What's Better Than "More Money"?  That's the question that both Qwest sub-agents and non-Premier Elites will be asking. Fortunately several things are better - so long as the Qwest network that's being sold is only a part of a bigger solution.

As more and more deals being closed are bigger and bigger, the network service that makes the solution desired becomes a smaller part of the solution. Many agents are now selling "telecom help desk" and "telecom expense management (TEM)" solutions for which they charge a premium. To these agents, a 20% difference in network service commissions do not make a big difference. If a non-Premier Elite master agent has the TEM or telecom help desk solution the customer is really buying, a 3% in region commission difference is not a big deal in the long run.

Bottom Line?

Qwest is suddenly throwing money at agents. That's kind of a surprise. Is it an offensive or defensive move? In the middle of a recession it's likely a smart move and it's sure to significantly increase all renewals and reduce churn to near zero in the short run.

In the long run it's one more signal that long term industry survivors are going to survive not by competing on price but by selling a solution that's bigger than a couple commission points.  If I were an existing Premier Master agent who is about to find themselves competing against Premier Elites I would lead with my ability to scrub Qwest commission statements.

I think that anyone who's an expert in scrubbing Qwest commission statements is about to become quite valuable.

 

Comments

[Ken Mercer]

I am very happy to see the commitment from Qwest to further support the agent program like they always have. It is positve support like this that shows Qwest will continue to be a champion of the indirect model.

[Adam Edwards]

We're pleased to see Qwest eliminate the renewal commission reduction. Renewals are more valuable than new sales because they don't incur the operating costs of provisioning. This change by Qwest is well timed with the increase in retention efforts of many agents.

[Cale Perry]

I'm very pleased Qwest has continued to show their committment to the partner channel.

[Ron Dunworth]

We view the news as an increased commitment to the channel, especially in light of the Century Link aquiistion. It also validates the importance of the channel in the retention effort by Qwest. The Premier Elite program is a great way to reward those who have contributed the most to the success of the Qwest Partner program. Its all good.

[Robert Short]

Blake Wetzel continues to garnish support from Qwest executive leadership and his peers. This latest announcement demonstrates Qwest's understanding and commitment to the partner channel and validates how strategic it is in the Business Markets Group.

[Dave Laskowski]

We are pleased to hear about the changes in the program and feel this sets a positive tone for the future of the Qwest partner program.

[Rob Camargo]

I'm happy to see Qwest continuing their commitment to the channel. I agree 100% that they are the most involved and supportive LEC in the industry where agents are concerned. I am hoping that the recent acquisition of their debt by CenturyLink will continue to free up resources for the channel going forward. Thanks for the post Dan! - Rob

[Jonathen Marder]

I`ts about time we see some "good news" from one of the major carriers. After all the commission changes/deletions us masters have recently been affected by this is truly a blessing. Renewals are a big part of a proactive agency and I`m glad to see that at least Qwest relizes that.
Jonathen Marder -
Co founder Western Telecom Group/Carrier Consulting