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February 5, 1989


By CBR Staff Writer

Determined to boost mid-range sales and increase US agent ranks to 800 from 300 by the end of the year, IBM is offering revamped credit and commission terms to its Authorised Agents in the US. According to Computer Systems News, the company has also pledged to pay new or current agents a $10,000 bonus for each additional territory opened this year. In IBM-speak, a new territory can apply to either a new market sector, or a new geographical location. But the scheme, unveiled in a closed meeting late last month, has already been criticised by some IBM agents, who feel it may lead to a drop in participant selection standards. Others believe it could led to a resurrection of the cross-channel conflicts between IBM agents and resellers, which have troubled the company in the past. Under the new terms, IBM will pay agents 50% of their commission when a sale is made, and 50% after installation. Agents currently receive commission in a lump sum, once installation has been completed. The company will also advance agents up to $3,000 per month in sales commission, in anticipation of commissions later in the year. In addition, agents who have taken out loans from IBM Credit Corp will be entitled to six repayment free months, and will be offered more flexible repayment periods stretching to 60 months. Nathan Konecky, president of Cherry Hill-based IBM agents, Arms Inc, is quoted as saying that the incentives will almost certainly enable IBM to meet its 800 agent target. What he fears, however, is that, in the throes of recruitment fervour, IBM will compromise the quality of the people selected. He also argues that the $10,000 bonus may result in current and aspiring agents expanding their territories too quickly. The sum is intended to help agents cover cultivation and staff training costs. IBM UK has no plans to implement any of the commission and credit changes outlined by its parent. It says, however, that agents involved in long-term projects with customers are entitled to recieve regular payments from IBM, in advance of contract completion.

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