Wednesday, February 17, 2016

The Future of Master Agents

ICI Explosives was in the business of selling, you guessed it….explosives. Mining companies need these materials to blast rock, but the explosive materials were sold as a commodity. The Australian division of ICI was stuck in a losing battle, when it came to price...until they realized the customer was more concerned with the risk of using explosives incorrectly. They were concerned about potential accidents and the likelihood the blast may not produce the uniformly sized rocks the mining company required.

In his book TiltNiraj Dawar outlined the approach ICI took to become more than a commodity to its customers. How they took their customer’s greater concerns, collected data from blasts, and used their expertise to change the conversation. They were able to not just advise customers on the way to use their explosives, but to provide aggregate rock to specifications, meaning ICI shared in the risk and provided an outcome.


This story resonates because this is where master agents are headed. The future must be fully focused on outcome, meaning the success of sales partners. At a base level, master agents provide security of payment by aggregating sales volume and they provide clout with suppliers for issue escalation. This service is a commodity, much like the explosives in the ICI example. In the future, this will not be enough to compete for the business of sales partners. Master agents must build the capabilities and resources to help partners where they want help. Partners will want services that increase their odds of success. That may take many forms, including marketing assistance, solution design, sales assistance, project management, and, ultimately, customer lifecycle management.

Sales partners are unique and have different strengths. They will work with a master agent who has the resources available to complement those strengths. I can see a day in the future when master agents will be able to guarantee an outcome because they have aggregated the data on many successful partner businesses and will understand how to assist a partner in any phase of the customer lifecycle. Much like ICI, master agents will be able to not just supply the resources, but guarantee an outcome for partners.

This post orignially appeared on on January 7, 2016

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