Retention - Part II

Retention is a VITAL part of your business. Bringing in $100K of sales each year just to see $100K of churn go out the backdoor means you are just standing still.  Actually with payroll increasing, rent increasing and insurance cost increasing if you making the same amount as last year, you are technically losing money!  This is one of the biggest reasons retention is so important to your business.

In my last blog I discussed the first step of setting up a Retention Program for your company.  The first step is: Know your Carrier's Policies.  Step 2  is the cumbersome part, you need to find out exactly when all your customers are coming up for renewal. Believe it or not, this may not be as easy as you think.  Once again, every carrier has their own policy on when the clock starts ticking for the contract termination.  ACC starts the clock within a few days of a circuit being installed, other carriers wait till the circuit is turned up.  Example: a circuit gets installed on 9/1/2010 under a 2 year term, is turned up on 11/1/2010.  If the circuit is on ACC the contract term date will be 8/2012.  On another carrier the contract term date will be 10/2012.  Knowing the carriers policy is important.

Okay so now you know the policy on how each Carrier views the start of the customer contract.  The obvious next part is the tedious task of going through all your existing customers to find out their exact contract termination date.  For MicroCorp Agents this is not difficult because we actually have that information easily accessible in our Nautilus portal.  Carriers like Qwest list contract termination dates on every commission check.  Unfortunately most carriers don't have the information readily available.  You will probably have to reach out to all your carriers with a list of accounts so they can get you want you need.  I know this will be a huge pain but really has to be done.  Going forward with your customers you will hopefully have a process but for your older customers, you have to get the information. 

Once you have all the information, you will need a way to easily access it.  This can be very basic as using a tickler system or Outlook or it can be more intricate by using spreadsheets or an asp package like Salesforce.com. If you use a Master Agent, they may have a program or process you can use to assist with this.  

Here is an example of a "Tickler" system; it is basic, inexpensive and easy.  Get 5 stand up according file folders that are divided by months.  Label the first one 2011, the next one 2012 and so one.  Then go through your customers and place a piece of paper in each file folder based on the month and year the customer's terms expires, EXCEPT - put the paper in the slot of 6 MONTHS EARLIER.  A contract that expires in Sept. 2012 would actually go in the Mar. 2012 slot.  A contract that expires in Feb 2013 would be found in the Aug. 2012 slot.  Make sense????  On the piece of paper have the customer's name, product, revenue and the exact date the contract expires.  That way on March 1, 2012 when you pull out 10 - 12 pieces of paper, you can prioritize the customers.

So what are you using to keep up with contract reterms?  Is it working the way you would like it to work? Is it easy to manage? Most importantly - Are you using it????

From a Master Agent's Perspective: Comfort Zone Downfall

From a Master Agent's Perspective: Comfort Zone Downfall: "Because MicroCorp is a Master Agency, we support a large Agents base. Every now and again we will see an order come across our desk for a co..."

From a Master Agent's Perspective: Retention 101, part I

From a Master Agent's Perspective: Retention 101, part I: "Everyone seems to have their own system for Retention. Some people use spreadsheets or Outlook and others just wing it. But in today's eco..."

Retention 101, part I

Everyone seems to have their own system for Retention.  Some people use spreadsheets or Outlook and others just wing it.  But in today's economy winging is definitely a bad business decision and even relying on a spreadsheet can be pretty risky.  At MicroCorp, because we are a Master Agency that supports Agents nationwide, we have spent a lot of time developing tools and systems to help not only our Agent Partners but also our Retention Team manage all of the nuances of Retention. Because retention has so many parts, I am going to break down retention into several steps in my next few blogs.

To start it is important to know what the Carrier's policy is for retention.  Some Carriers like New Edge Network have contracts that auto-renew.  So unless your customer sends a cancellation letter in advance, their contract will renew for a year at the same rates. Paetec has a team who call out to existing Agent accounts reterming them for the Agents.  That is a real win/win for both Paetec and the Agent.

At the total opposite end Carriers like CenturyLink stop paying commissions to Agent on accounts that fall out of contract.  There are even a few carriers who will renew your customers on their own making the customer's "direct" house accounts leaving the Agent high and dry.  So to protect your business you really have to know exactly what the Carriers rules are on retention.

What to look for in a Carriers Retention Program:
* How early can an Agent reterm a customer?
* What is the Carrier's policy on auto-renewing?
* What happens to an Agent's commissions if the customer goes month to month?
* Are there any potential risks if a customer does not reterm,  like do pricing promo's fall off increasing a customer's rate.
* Does the Carrier have a program to renew a customer on their own, cutting the Agent out of the relationship.

So do you know what all your Carrier's policies are for Retention?

Comfort Zone Downfall

Because MicroCorp is a Master Agency, we support a large Agents base. Every now and again we will see an order come across our desk for a company that we already know has been sold by another one of our Agents.  The first Agent will have the local and LD business; the second Agent brings us the data network.  And of course, being a Master Agent discretion is imperative, so we never say anything to either Agent.  We do have one large customer that has three different parts of their business being sold by three different Agents.  Our commission team loves that. 

So recently curiosity got the best of me and I started asking the first agent (Agent A) about the customer. 

1. How did he get start working with the customer?
2. How often does he speak with the customer? 
3. How solid is the relationship?

I asked the second agent (Agent B) the same questions.  It was interesting while Agent B knew of Agent A, Agent A was totally unaware of the Agent B.  The second agent (Agent B) was using an auxiliary product, fax2mail, to get his foot in the door and was talking to the customer about web conferencing.  He got in because Agent A never asked the customer about those needs. Agent A only worried about Legacy Voice products - his comfort zone. 

Unfortunately Agent A only spoke to the customer once a year, never did an audit of services and never talked about the customer’s needs.  He got into the company because of a friendship, but was not really bringing value.  He doesn’t know it, but he is about to lose a customer.  So my question to you – why do so many agents leave so much on the table??? And how can I help them break that habit?