3/19/2009 3:03:00 PM
Orange unveils 90-10 dealer commissions revenue share plan
Orange will launch a revenue share system for dealer commissions on 1 April, with 10% in deferred ongoing commissions and 90% upfront.
The system will give dealers 10% of the customer’s ARPU from the second month, and every month thereafter.
Orange will pay the 10% ongoing commission regardless of the customer’s spend per month, but has set a £42 monthly ARPU bar, representing the level that would match commissions under its previous scheme.
Customers spending over that level will give dealers a bigger commission over the lifetime of the contract, and those spending below will mean dealers must accept lower rewards.
The model follows O2’s revenue share scheme, which was introduced in October 2008, and T-Mobile is due to launch its own version, also on 1 April.
The overriding goal of Orange’s plan is to ‘drive quality business rather than any business’, according to indirect sales chief Duncan Hay (pictured).
Orange will also give bigger rewards for retaining small and medium business customers, in addition to the revenue share system.
Mark O’Meara, head of the dealer and distributor channel for Orange, said: ‘We are taking some upfront commission out, but a partner that brings in a quality customer will actually earn more, due to the revenue share model.’
Orange has taken six months to officially unveil its revenue share model.
The operator has been discussing it with dealers and distributors, and monitoring reaction to O2’s model before unveiling its version.
O’Meara said: ‘It was done to ensure that we got this right, making sure [dealers] understood what our goals and objectives were. In reality, it’s not a particularly long period of time when you’ve been talking to a number of partners.’
He added: ‘We’ve been sensitive to the cashflow impact on our partners and we have been consultative on when, how deep and how big we should go.’