O2 dealers face axe in B2B partner shake up

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Centre of Excellence scrapped and replaced with new O2 Direct Partner Network scheme

O2 has placed its entire base of top-tier partners under review ahead of the launch of a revamped partner programme launching in April.

The operator confirmed this month it is to scrap its existing Centre of Excellence (CoE) programme after eight years, replacing it with the new O2 Direct Partner Network.

The new programme, which has taken a year to develop,  will see revenue share increased from 48 to 54 per cent and a new set of monthly targets, which dealers must prove they can achieve ahead of the change – due on April 1.

CoE dealers who fail to meet the new targets (which had not been announced as Mobile News went to press) will lose their direct status. Instead they will connect via an O2 distributor such as Chess, Carphone Warehouse Business and Daisy Distribution.

O2 head of partners Jason Phillips (pictured) told Mobile News the CoE programme, which has around 21 members, had “lost it’s mojo” in recent times.

“CoE was groundbreaking when it first launched,” said Phillips.

“It provided a badge to a group of highly successful partners and allowed us to get some competitive advantage in the market.

“It’s been in place for a while now  and it’s lost its mojo to a degree. The market has moved on. The Direct Partner Network really gives us the opportunity to come out with something new and up to date.”

New KPI’s
CoE partners are currently measured on four KPI’s. These are new to O2, churn, landline and customer service scores.

Phillips said the new programme will see an increased focus on new connections, retention, boosting ARPU and selling additional digital services, such as Microsoft 365, Box and McAfee.

“Mobile is still our core and remains our bread and butter but we are moving into a digital environment where we are
selling more products and services,” said Phillips.

Changes
Other notable changes for the programme include revenue share being stopped when an account is more than three months out of contract.

Dealers on the new programme will be given an initial five-year membership provided they consistently achieve quarterly targets.

They must also commit 80 per cent of their mobile business to O2.  Benefits for dealers will include increased marketing support, simplified commercials and a bigger dedicated support team.

O2 is also committing £8 million for incentive payments over the next three years to help drive sales through the programme.

“We are investing in the channel,” said Phillips. “If partners work with us around the changes, they can earn more than they earn today.”

Business needs
Phillips, who took up his role 18 months ago, revealed he has spent the past year working closely with O2’s existing CoE partners to help better understand their business needs.

Meetings were also to determine whether they still warrant a place in its top tier based on the new strategy.

Philips insisted there is no desire to cut partners, provided they achieve O2’s requirements. He did however admit a “handful” of partners had already decided to move to distribution, refusing to discuss names and that “honest” conversations are due over the next three months with others.

“We have been in joint conversations with a handful of partners who have been delivering some volume, but a fairly small amount.

“Their business has changed as well as ours and we’ve worked mutually with them to say, where do we go from here, can you step into the new programme or are there other options where you can get better support? ”

News of the changes has so far been well received from O2’s current CoE partners, claiming it will help them win business.

Speaking on condition of anonymity one dealer said: “There wasn’t really any bad news, which we feared.  It gives me the chance to increase my numbers in a contract (five year, revenue share rise) that gives me the confidence to invest. I thought it was very positive.”

Another added: “I always thought O2 were pretty good in the first few years but the last few years I’ve struggled to understand what they want from us and where they are going. Everything’s appears clearer.”

Another added: “Everyone has been given the same objectives, not everyone will meet them, I think that’s fairly certain. There will be cuts. ”

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