If you’ve ever been through a telecom buying cycle, or two, or three, then you’re probably familiar with “telecom agents” in some capacity. Friendly individuals who can help you navigate the telecom / IT purchase process FOR FREE? Almost seems too good to be true. Meanwhile, large Master Agent companies like TCG, Telarus, and TBI, to name a few, collectively earn billions of dollars in revenue annually and are growing fast.
In this post, we’ll explain what agents do, what their incentive structure is like, and when it may make sense to work with one for your next purchase.
What is a telecom / IT agent? What’s the benefit?
IT infrastructure purchases can be frustrating. Lots of carrier options for each service. Lots of quotes received. Lots of sales calls. All of them end up sounding the same at the end of the day and you’re unclear on who would be best to use.
That’s where an agent comes in. Telecom agents are independent consultants who help you navigate the telecom / IT infrastructure purchase process from beginning to end. They’ll take in your needs, find carriers that meet them, request quotes, and then help you manage implementation once you’ve signed paperwork. Agents will get you the best available pricing and can help you buy from almost any IT service provider in the US. When you’re buying several services at a time, this can be a huge burden off your back!
Oh, and we forgot to mention, most agents’ services are free. They get paid a commission from service providers for selling through services, so that makes their services free to you. Their service commission doesn’t increase the price of service (would be same as if you went direct-to-carrier), so the agent service really is free.
Here are some other benefits of working with an agent:
Single point of contact. No need to maintain 25 different carrier contacts, as the agent will keep track of all that for you.
Carrier agnosticism / client-focus. Carrier reps will only pitch you on the home team. Agents can offer you an unbiased perspective on the market.
Process / promo knowledge. Agents will know about ways to get pricing down, speed up implementation, and save you more money when possible.
Current on the market. Agents are forced to stay up-to-date on tech trends so that you don’t have to. They can sometimes help you transition to a more efficient technical solution.
Okay great, so what’s the catch?
Yes, there’s a catch unfortunately. The agent channel is wonderful when it works well, but it can be maddening when it doesn’t. The key thing to keep in mind is that not all agents are created equal. Telecom is not unlike real estate or insurance in that it contains some phenomenal agents that always keep a client’s needs at heart, and some agents that are more self-serving.
Agents are commission minded. Agents are paid out a percentage of revenue for what they sell, typically 15-20%. Some carriers offer a higher percentage / one-time bonus than others, and that pushes certain agents to sell those carriers over others, even when it’s not right for the customer. Also, more revenue to the carrier means more commission to the agent, so agents are often incentivized to push you to buy services that you may not need.
Agents aren’t always exhaustive. Some agents don’t actually have all of the carrier relationships out there and only push a few products. When this happens, you may only receive quotes for Verizon and Centurylink service even though Zayo might be the best provider for you. Some agents act more like carrier reps in disguise, only pushing a few products for a couple of providers really hard. These are companies to steer clear of.
Some agents do more than others. It is important to understand the total value proposition your IT services agent brings to the table. At their core, most agents are in the business of selling services and this is what they are good at. However, the very best agents are long term partners that assist not only with the pre-sales aspects of buying services, but also with managing future issues and buying processes. Good agents can be extremely helpful when unexpected issues with billing or repair pop up.
Beware the MSP upcharge. Some MSPs offer agent services where they’ll get you carrier services and then consolidate your internet / voice / managed services onto a single bill for simplicity. Sometimes, MSPs will add their own margin into the services provided without you noticing (i.e., mark up your internet / voice services by 25%). This can certainly add up over time, and is especially frustrating when other agents offer the same service for free.
When dealing with agents, be careful! Too much trust in a good thing can get you ripped off.
The verdict on agents
So do we like agents or not? It’s tough. When the agent channel does the right thing for a customer, it really offers a great service. Customers can get the right services at the best price and save tons of time on quote requests / implementation, for free! Unfortunately, agent incentives aren’t exactly matched with the customer, so that leads to a flawed system. Also, checking an agent’s work requires a lot of the same manual work that a standard direct-to-carrier buying process requires.
When using an agent, we recommend that you check references, double check pricing provided (on at least a couple carriers), and also researching the carrier suite yourself to ensure the agent is being exhaustive. If the agent is the one who will bill you, make sure to double check your bills to ensure that you’re not getting upcharged.
Our company, Lightyear, is also a “kind of” agent: a virtual one that guarantees best available pricing, an exhaustive provider search, and no surprises upon billing. If you like the benefits that the agent channel offers but are skeptical of agents / unsure on how to find a good one, give us a try and fill out our questionnaire next time you’re in the market.