The "Discount Cable Consultant" ... A New Breed
Buyer Beware or a Good Value ... How to Identify The Real Difference & Value of Each?
Buyer Beware or a Good Value ... How to Identify The Real Difference & Value of Each?
It's Time to select a Broadband and Community Cable Consultant. The old sayings “you get what you pay for”, “there’s no free lunch” and “cheap things aren’t good/good things aren’t cheap” can also typically apply in the association community Cable, Internet and Phone Bulk consulting services world. The purpose of the information below is not to disparage Discount Cable Consultants, as some some may provide a good value for the services provided. But rather how you can identify one as such, along with the potential “pitfalls” of securing the services of a Discount Cable Consultant as opposed to a Full Service Consultant.
FULL-SERVICE TELECOMMUNICATIONS CONSULTANTS – What’s The Real Value?
There are a number of quality “full service” telecommunications consultants that have been around for many years and have decades of experience. They typically provide quality full-service consulting services to their clients saving them time, while negotiating significant financial savings on Bulk Cable/Internet agreements and also negotiate upfront "Door Fees". Moreover, they typically assist their client associations over the life of the Bulk agreements as well, helping them work out issues with the cable and phone companies, such as billing and service issues. Full-service consultants, such as Broadband Agreement Specialists, Inc., typically earn a contingency fee commission percentage tied in some form to the upfront door fee and new Bulk agreement savings. By being tied to the upfront door fee and Bulk agreement savings value, the full service consultant has an incentive to negotiate the maximum total value for the client association (Door Fee + Lower Bulk Rate Fees), because they receive compensation in some form on both parts of the deal. The higher the NET upfront + Agreement Bulk Rate Term Savings financial value to the association the better. Yes the consultant earns more money in the form of commissions, but the association saves more money NET. It's not just about the highest upfront door fees fees one can negotiate. Paying a couple of dollars more per unit over the term of an agreement, or saving a couple of dollars per unit typically adds up to tens of thousands of dollars! Plus ... Full Service Consultants also focus on ensuring that the negotiated Bulk agreement arrangement and services meet the specific needs of the client association, and they are there to support the association over the long haul.
There are a number of quality “full service” telecommunications consultants that have been around for many years and have decades of experience. They typically provide quality full-service consulting services to their clients saving them time, while negotiating significant financial savings on Bulk Cable/Internet agreements and also negotiate upfront "Door Fees". Moreover, they typically assist their client associations over the life of the Bulk agreements as well, helping them work out issues with the cable and phone companies, such as billing and service issues. Full-service consultants, such as Broadband Agreement Specialists, Inc., typically earn a contingency fee commission percentage tied in some form to the upfront door fee and new Bulk agreement savings. By being tied to the upfront door fee and Bulk agreement savings value, the full service consultant has an incentive to negotiate the maximum total value for the client association (Door Fee + Lower Bulk Rate Fees), because they receive compensation in some form on both parts of the deal. The higher the NET upfront + Agreement Bulk Rate Term Savings financial value to the association the better. Yes the consultant earns more money in the form of commissions, but the association saves more money NET. It's not just about the highest upfront door fees fees one can negotiate. Paying a couple of dollars more per unit over the term of an agreement, or saving a couple of dollars per unit typically adds up to tens of thousands of dollars! Plus ... Full Service Consultants also focus on ensuring that the negotiated Bulk agreement arrangement and services meet the specific needs of the client association, and they are there to support the association over the long haul.
DISCOUNT CABLE CONSULTANTS – Hit and Run or a Good Value?
Recently Discount Association Community Cable Consultants has been coming into the market promising great results and lower commission fees. But generally speaking, "you get noting for nothing". Unfortunately, they sometimes have very few years of experience in the telecommunications industry prior to becoming community telecommunications consultants. Nonetheless, their pitch sounds great and their consulting agreements are typically very simple. They explain that that they charge a percentage only on the upfront door fees that a cable company or phone company may pay, and they do not charge a commission on any savings that the association may realize under the new Bulk agreement.
Now think about that for a moment ... If your association negotiating a Bulk agreement with the help of a consultant, what incentive does the consultant have to get you the greatest negotiated savings on your Bulk rate pricing, if their financial incentive compensation is based solely on getting your association a big Door Fee Signing Bonus? THERE IS NO INCENTIVE FOR THEM TO SAVE YOU MONEY ON THE BULK RATE CHARGED TO YOU EACH AND EVERY MONTH.
Recently Discount Association Community Cable Consultants has been coming into the market promising great results and lower commission fees. But generally speaking, "you get noting for nothing". Unfortunately, they sometimes have very few years of experience in the telecommunications industry prior to becoming community telecommunications consultants. Nonetheless, their pitch sounds great and their consulting agreements are typically very simple. They explain that that they charge a percentage only on the upfront door fees that a cable company or phone company may pay, and they do not charge a commission on any savings that the association may realize under the new Bulk agreement.
Now think about that for a moment ... If your association negotiating a Bulk agreement with the help of a consultant, what incentive does the consultant have to get you the greatest negotiated savings on your Bulk rate pricing, if their financial incentive compensation is based solely on getting your association a big Door Fee Signing Bonus? THERE IS NO INCENTIVE FOR THEM TO SAVE YOU MONEY ON THE BULK RATE CHARGED TO YOU EACH AND EVERY MONTH.
Aside from their potentially modest level of experience, this form of consultant compensation fee arrangement could be a potential red flag. Why? There are several reasons why your association should be cautious about this form of one-time consultant contingency fee arrangement based only on a percentage of an upfront Signing Bonus Door Fee:
DOOR FEES AT THE EXPENSE OF BULK AGREEMENT SAVINGS: Cable and phone companies want to close the deal. A consultant could potentially work with the telecom company to increase the upfront door fee, which may come at the expense of some of the savings over the life of the new Bulk agreement. In simple terms, the Door Fee goes up, but so does the Bulk Rate you pay, because the increased Signing Bonus Door Fee gets loaded into the Bulk Rate you'll pay. This in itself is not a problem "IF" the consultant's compensation is based on a percentage of savings and compensation across the total proposed bulk arrangement. But the Discount Cable Consultant in this example discussion is compensated solely on a percentage of the Signing Bonus Door Fee, so it could potentially be an issue for your to consider. Therefore, the question now becomes how much of the savings are being potentially shifted to the higher Signing Bonus Door Fee, and could there have been more savings on the Bulk package for the benefit of your association and its members? The value to the association is in the NET combined financial value, not just the Signing Bonus Door Fee. Unfortunately, the Discount Consultant is compensated solely on a percentage of the Signing Bonus Door Fee negotiated, and has no financial incentive whatsoever to save your association money on the Bulk rates you will pay under the new Bulk agreement with this compensation scenario.
NOT MAXIMIZING TOTAL FINANCIAL VALUE FOR YOUR COMMUNITY: The total value of a new bulk agreement arrangement is not just in the upfront Signing Bonus Door Fees paid by the cable/phone company to the association, but also on money saved on the Bulk service (Cable, Internet, Phone, etc.). Saving money on the Bulk services can be equally and sometimes even more important when calculating the total NET value of the new Bulk agreement deal. The real money long term in in negotiating a lower Bulk rate for services. The savings over the life of the agreement can have significantly more financial value than the upfront Signing Bonus Door Fees. If your consultant has no financial incentive to negotiate a better deal on the Bulk rate, will they do so on your behalf … Maybe, or maybe not? Think about it. Just $1.00/unit/month X 200 Unit Property X 84 months (7 years) = $16,800, excluding the compounding of annual Bulk Increases and applicable taxes. That's a lot of money potentially left on the table.
NOT GETTING OLD WIRING REPLACED UNDER THE NEW AGREEMENT: This can be a big issue as well. If your consultant is compensated on upfront Signing Bonus Door Fees only, and your property needs new wiring because the coax is old and in poor condition, will they negotiate the inclusion of the rewiring of your community as part of the new agreement if it may potentially reduce the total dollar amount of the Signing Bonus Door Fee? Remember, the consultant's compensation in this example is all about maximizing this Signing Bonus Door Fee. After all, someone has to pay for that new coax wiring or fiber optic cable. The cable company needs to pay for the capital and labor to replace the wiring somehow. The Discount Cable Consultant may brush this issue off indicating that the cable agreement will stipulate that the company needs to maintain the wiring system at their cost. That may well be true, and the cable company may repair and replace "as needed", a piece at a time when it fails. But, wouldn’t you rather have all of the wiring replaced, if needed, as a contractual requirement as part of the new Bulk agreement deal? There's a reason people buy new cars, and there's a reason all wiring should sometimes be replaced.
NO CONSULTANT SUPPORT DOWN THE ROAD WHEN YOU NEED IT: If your consultant receives all of their compensation money upfront after the new Bulk deal is signed, and your association has an issue somewhere during the many years of your long-term Bulk agreement, what incentive does the Discount Upfront Door Fee Only Consultant have to assist you with your issues? Probably NONE. Take the time to ask another association who used a Discount Cable Consultant how this arrangement has worked out for them over the long haul. Maybe good, or maybe not so good. Based on Discount Cable Consultant's business model, they are likely on to the next deal, since they already got paid long ago.
SO HERE'S THE ANALOGY...
Discount airlines can promise great service at a low fee, but typically they start with 40-year old planes with a great paint job and new employees, many of which may be inexperienced. Sometimes it's a great deal and sometimes it's not! Everything can look great at the surface, but in many cases they provide a low level of service. If you are OK with a cheap ride, then it may work for you, but you may not know what the true customer experience will be until you are taken for the ride, or the flight in this example. But by the time you tack on the cost for the things they do not provide as standard, you may have been better off with a full-service major carrier with a lot less aggravation. Plus, in the end the discount carrier is not always the best financial deal. Sometimes you get what you pay for, and sometimes it's a whole lot less. "Penny wise and dollar foolish". It's funny how old clichés still hold true.
Full-service telecommunications consultants typically have decades of experience in the industry, they have long established business relationships with all of the service providers, consistent business processes for negotiating and evaluating prospective deals, and they typically charge a contingency fee well worth the services they provide to their client associations. Their contingency fees are based on the total value they negotiate on behalf of your community, so they have a financial incentive to negotiate the best financial deal possible in total, while providing class-leading services for your community. They actually typically work out cheaper, because the association realizes a greater NET upfront/savings financial value, even after the consultant contingency commission fees are paid.
As we explain the above, the process of selecting a telecommunications consultant is important, and it is difficult to know what expertise your consultant will provide, aside from the way their fee is calculated. After all, you are likely selecting a consultant for your association, because the board believes that they do not necessarily have the expertise to evaluate the difference services and technologies, while negotiating the new Bulk agreement on their own. The consultant you may now be considering may also be the “favored” vendor of your management company, which may or may not make them the best consultant for your community. Make your selection carefully - Your goal is to ultimately negotiate the best value in Bulk services for the money paid by your association community. Your selected consultant is your "primary tool" for helping the association board to achieve the service goals and pricing objectives for the benefit of your community. Tools make the job, so don't be penny wise and dollar foolish.
Remember … Don't get caught up in the misconceptions ... Discounts are great, but in this case it's not about driving down the commission fees of your consultant. Although this may sound counter intuitive, what it is really about is maximizing the total “NET VALUE" the association gets to keep in both combined upfront fees and Bulk agreement savings over the life of the agreement, on the high-quality services negotiated under your next Bulk contract. It's like the old saying --- "It's not what you make it's what you keep!" The NET VALUE is what your association gets to keep in this case.
If your consultant earns a large contingency commission, then they have typically saved you a great deal of money, and their earnings are based on a percentage of your NET VALUE. Plus, on-going consultant support after the service agreement is signed can be very important. Getting issues solved with the cable and phone companies can sometimes be a challenge, and having someone who makes these problems go away has great value. With this type of arrangement, everybody wins!
Discount airlines can promise great service at a low fee, but typically they start with 40-year old planes with a great paint job and new employees, many of which may be inexperienced. Sometimes it's a great deal and sometimes it's not! Everything can look great at the surface, but in many cases they provide a low level of service. If you are OK with a cheap ride, then it may work for you, but you may not know what the true customer experience will be until you are taken for the ride, or the flight in this example. But by the time you tack on the cost for the things they do not provide as standard, you may have been better off with a full-service major carrier with a lot less aggravation. Plus, in the end the discount carrier is not always the best financial deal. Sometimes you get what you pay for, and sometimes it's a whole lot less. "Penny wise and dollar foolish". It's funny how old clichés still hold true.
Full-service telecommunications consultants typically have decades of experience in the industry, they have long established business relationships with all of the service providers, consistent business processes for negotiating and evaluating prospective deals, and they typically charge a contingency fee well worth the services they provide to their client associations. Their contingency fees are based on the total value they negotiate on behalf of your community, so they have a financial incentive to negotiate the best financial deal possible in total, while providing class-leading services for your community. They actually typically work out cheaper, because the association realizes a greater NET upfront/savings financial value, even after the consultant contingency commission fees are paid.
As we explain the above, the process of selecting a telecommunications consultant is important, and it is difficult to know what expertise your consultant will provide, aside from the way their fee is calculated. After all, you are likely selecting a consultant for your association, because the board believes that they do not necessarily have the expertise to evaluate the difference services and technologies, while negotiating the new Bulk agreement on their own. The consultant you may now be considering may also be the “favored” vendor of your management company, which may or may not make them the best consultant for your community. Make your selection carefully - Your goal is to ultimately negotiate the best value in Bulk services for the money paid by your association community. Your selected consultant is your "primary tool" for helping the association board to achieve the service goals and pricing objectives for the benefit of your community. Tools make the job, so don't be penny wise and dollar foolish.
Remember … Don't get caught up in the misconceptions ... Discounts are great, but in this case it's not about driving down the commission fees of your consultant. Although this may sound counter intuitive, what it is really about is maximizing the total “NET VALUE" the association gets to keep in both combined upfront fees and Bulk agreement savings over the life of the agreement, on the high-quality services negotiated under your next Bulk contract. It's like the old saying --- "It's not what you make it's what you keep!" The NET VALUE is what your association gets to keep in this case.
If your consultant earns a large contingency commission, then they have typically saved you a great deal of money, and their earnings are based on a percentage of your NET VALUE. Plus, on-going consultant support after the service agreement is signed can be very important. Getting issues solved with the cable and phone companies can sometimes be a challenge, and having someone who makes these problems go away has great value. With this type of arrangement, everybody wins!
