June 13th, 2016: www.channelpartnersonline.com
Six regional master agents have teamed up to form Technology Solutions Exchange (TSX) in an effort to broaden their footprints, improve their access to –and negotiating power with – service providers, and increase revenue for their companies and subagents. The group has been collaborating quietly since fall 2015 and now is ready for a public debut.
Charter TSX members include P2 Telecom, TDM Inc., Connectivity Source, CTG3, Netstar Inc. and Telcorp International.
TSX members have plans to formalize their partnership as a company later this year, but for now operate as an association led by Bill Patchett, founder and CEO of P2 Telecom, and Robert Bowling, president of TDM, who were elected as co-chairs. Kristin Vick, executive administrator for TDM, is the administrator and self-proclaimed “whipcracker.” Members pay dues and meet monthly, though business conversations are conducted by daily. TSX members also host joint events. Remaining dates this year include Aug. 2 in Seattle, Aug 4 in Los Angeles, Sept. 19-22 in Louisville and Oct. 19-21 in New York City.
Members have signed bilateral agreements to ride each other’s provider contracts as is common among master agents. The difference is this is not done on a one-off basis, but across their provider portfolios. In addition, subagents of TSX members can discover these shared agreements through Convey Services, which delivers online provider catalogs for each of the members.
TSX is considering forging umbrella agreements, but today members’ new provider agreements are reviewed and voted on by all members. Members already have been able to negotiate new provider contracts on the selling power of the group, Patchett said.
“In January of every year, I’m refreshing agreements, changing terms and looking for higher commissions,” Patchett explains. “If I’m with a carrier and because of TSX I was able to add $3 [million] to $4 million in monthly recurring revenue, I’m clearly going to get a much better agreement. And, because of that, every single subagent will benefit from it, which is key.”
Indeed, P2 Telecom alone has picked up 15-20 new high-producing partners due to its membership in TSX, Patchett said.
Inevitably, TSX will be compared to The Alliance Partners, formerly the Agent Alliance, a buying consortium of 17 agencies formed in 1997. Patchett said TSX members have done business with and respect Alliance member companies. In addition, he said TSX is “not reinventing the wheel,” but “looking to do things a little bit different.”
For example, none of TSX’s members are big master agents; instead they are the midsize companies with a regional focus.
But it’s not so much geographic diversity as it is provider diversity that characterizes the membership. Similarly, each member has a specialty, e.g., strong agreements with cablecos or fiber providers or call-center companies.
In addition, TSX members are not transactional businesses. “The real driving force that I see within the entire organization is none of us is selling widgets,” said Patchett. “We’re not just selling cable circuits. We’re not just selling phone lines. We’re selling solutions.”
Another hallmark is transparency with subagents on the terms and conditions of their agreements with providers. Subs can inquire with the TSX member they work with to see the agreements.
TSX members also support each other’s agents as if they were their own, without requiring a greater commission percentage, said Vick. “A lot of master agents are afraid that people are out there to steal their agents,” she said. “We are not in the business of steal each other’s agents. We’re going to treat each other’s agents they way we treat ours.”
TSX is actively looking for new members, particularly on the West Coast. “We are searching for like-minded masters … ones that actually do business very similarly to the way we work,” said Vick. “We don’t just want to be quote shops and not know our agents. We want to have that personal relationship.”
“That was a big part of who we accepted and who we will continue to accept.”
Many of the initial members were identified by a consultant familiar with the industry. In addition, TSX members are looking to providers that are courting them to clue them into potential candidates.
Vick explains that rather than signing a new agreement, they might be able to bring in a master agent that already has a contract with that provider. “If they’re likeminded … and they’re smaller in size and not one of the big dogs, then they could be a fit for us,” she said.