Scansource is excited to highlight the latest episode of our go-to tech podcast for the non-tech and tech listeners alike, Break I.T. Down. The subject at hand for Episode 21: The Agency Model.
In the latest Break I.T. Down installment, hosts Ian Thompson, Kyle DeWitt, and new addition Gabby Giles discuss the Agent Model, a tech route-to-market that is creating mucho buzz right now. For those familiar with normal distribution, the agency model has similarities to broadline distribution, but is completely unique. Instead of transferring goods and maintaining accounts receivable, the agency model is all about delivering services through the cloud and how businesses “sell” those services, according to DeWitt.
“An agent is someone providing technology solutions to their partners, usually delivering through the cloud and with X-as-a-Service subscriptions, but who isn’t necessarily making traditional investments like providing support or doing billing,” DeWitt tells listeners. “The agency model is built on maintaining customer relationships by helping find the right supplier partners to supply technology to customers.”
DeWitt and Thompson outline different aspects of the agency model that differentiate it from traditional distribution, using real-world examples to paint the picture. For example, if a small health clinic or doctor’s office opened up, they’d need to find internet or cable access. If they were part of a larger hospital system or had a technology resource on staff, maybe they’d have this support already built-in. But for those needing recommendations on providers to consider, features they’ll need, and what kind of connectivity they require to support the business, a master agent or agent model is ideal for providing a “warm hand-off” to the ideal supplier for those services.
“This is starting to sound a lot like a consultant,” Giles says when reviewing the unique qualifiers of an agent model. DeWitt affirms this notion of the consultative value of agents, saying that because of the sales focus and consultative style of selling native to the agent model, agents can become almost like a headhunter for pairing customers or consumers with the ideal solution or supplier for their need. “They’re a truly effective lead generation machine,” he says of this new approach to doing business in the cloud and through subscription offerings.
And there’s more to learn about the agency model!
“Just like traditional two-tier distribution, there’s also a two-tier agent model,” DeWitt says. “Just look at ScanSource/Intelisys. These represent a master agent with sub-agents below them. These sub-agents experience the value of the consultative model and are now able to offer the same consultative approach for their own customers.”
So the real question becomes clear, as Thompson states it, is whether the agency model itself is the new future of the channel.
“Yes,” DeWitt says. “It definitely is the next big thing, and with very few caveats.”
“The agency model is going to become the wave of the future, with most technology solutions these days coming in the form of subscription services,” DeWitt tells listeners. “Loyalty is eroding a lot in this economy – a consumer can have one bad experience with you and be done, in essence. With cloud-based and subscription offerings usually involving a subscription with a contractual period of adherence, this type of model is going to become really attractive for businesses.”
So are there any caveats to this model? The Break I.T. Down crew is honest that there might be one, and that’s brand establishment and identity. “Resellers that aren’t agents typically have more of a brand identity established with customers,” DeWitt says. “With an agency model, the brand isn’t the most central thing – it’s more about where they’re taking you as the consumer or client. But with no inventory, no A/R, no bad debt involved – the agency model is a great model.” To learn more about the agent and sub-agent models and how they apply for ScanSource and Intelisys partners, listen in to Episode 21 and hear all the latest buzz on all things I.T.
ScanSource is here to support you with all your network needs. Reach out to our team to learn more about the agency model today.