The Channel

What's on Tap at PlanetOne: Master Agent Delivers Savings in a Tough Economy

By Paula Bernier, Executive Editor, TMC  |  March 01, 2012

This article originally appeared in the March issue of INTERNET TELEPHONY magazine.

PlanetOne Communications has been named to the Inc. 5000 list and won acclaim for snagging the business of some major customers. But I’ll always think of the master agent as the little joint down the street with Jagermeister on tap.

With an opening line like that, this story may raise more questions than it answers. But one thing I can report is that when you enter PlanetOne headquarters, which I recently discovered is very close to my home office in Scottsdale, Ariz., the first thing you notice is the tap machine at the company’s reception desk. Ted Schuman, PlanetOne’s founder and CEO, said he got the idea for the tap a decade ago when he saw one while on a ski trip in Austria.

“It’s there all the time,” he says. “It’s become more famous than I am. It is the center of many Friday meetings.”

The tap machine has been the hub of PlanetOne meetings for more than two decades.

Schuman decided to get into the master agent business years ago when he was working for service provider Allnet Communications. The idea took root when an agent, wearing shorts and flip flops, walked into the Allnet office and asked Schuman for his monthly check, which totaled $15,000. Schuman, who at the time made $100,000 a year as a No. 1 manager for Allnet, had an epiphany. Shortly after that, he launched PlanetOne with a credit line, matching funds from his folks, and the green light from his fiancé (now wife).

Starting with a simple model that involved selling long-distance, and placing and receiving orders through the mail, it took three years to make PlanetOne into a profitable business. Not surprisingly, the company has evolved significantly over the years in terms of its customer base, finances, internal processes and product portfolio.

Today, PlanetOne’s bread and butter is broadband connectivity, ranging from MPLS on the high end to integrated access on the lower end, which it offers through partnerships with a wide range of carriers. The company also sells hosted VoIP and hosted Exchange through its relationships with Broadview, CenturyLink, Telesphere and PAETEC (News - Alert) (now part of Windstream).

PlanetOne employs a team of experts in the areas of engineering, project management, and account services. The company’s average employee has 15 years of telecom experience, and most of them come from the carriers. And Schuman is proud to report that most of the management of PlanetOne’s 9,000 commercial accounts is done online, as opposed to on paper.

“It’s a real business today,” he says, noting that PlanetOne has about $60 million in annual telecom revenues coming through the agency.

About 1,000 agents across country have partnered with PlanetOne, which with its preferred vendors stages about 10 events in various U.S. cities each year to educate and network with these agents.

“PlanetOne, Ted Schuman and the entire team are by far the best support group we have experienced in my career over 20 years,” says Michael J. Howard, president of Advanced Business Communications Inc. “Ted protects the sub-agents and doesn’t mince words in doing so. I am so pleased we rolled up under the PlanetOne umbrella 10 years ago. We can concentrate on selling and retention and not worry about fickle carriers and Swiss cheese agreements that put our livelihood at risk with every passing year.”

Steve McDonald (News - Alert), president of Global Fiber & Data, comments: “By being easy to do business with, existing and prospective new agents to PlanetOne can enjoy greater sales impact to their client base because they will spend more time interacting with clients and less time on admin or office work (chasing orders, chasing quotes, etc.), which bogs down the sales machine for any partnering agency. In my case, I know this unique PlanetOne efficiency allowed me to actually put up bigger sales figures than I expected in a relatively short time frame.”

PlanetOne sells exclusively to business customers, who have an average monthly spend of $1,800. More than 90 percent of PlanetOne sales are very solutions driven and involve the master agent partnering with agents in the field, explains Schuman.

“I’m very bullish right now,” adds Schuman. “We just had our best year ever.”

Companies are looking for ways to reduce their overhead, so the PlanetOne model – which involves selling services based on partnerships with several service providers around the globe, thus enabling the master agent’s sales people to offer their customers the best deal – makes sense in this economy, he continues.

“Our business model has thrived in a down market more than in an up market,” Schuman notes. PlanetOne’s monthly attrition is less than 1 percent even in a down market, he adds, which he says remarkable considering the rate of business closures and business challenges.

To further help business customers manage their communications costs, PlanetOne by the end of this month had expected to introduce telecom expense management tools from Pinnacle Software to its agent partners.

PlanetOne also has dabbled in selling ShoreTel (News - Alert) equipment in addition to services. But Schuman says that effort has met with only modest success.

“I don’t know how much longer we’re going to continue down the hardware path,” he says. 

“I look at hardware as a fringe product,” Schuman adds, and one that doesn’t offer residuals.

Schuman is similarly unimpressed with the prospects for growth via acquisition.

“I’m very content with our organic growth, and the numbers we’re putting up,” he says.

There are something like 5,000 agents nationally, which means PlanetOne is clearly in the top five, and its numbers are as good an anybody’s in the country, he says.

“I’m not sure I feel the need or urgency to tinker much with the model,” he adds.

Edited by Jennifer Russell