Business Tools Blog

Question from Rachelle Haid

We have a large order volume from a single customer this month.  Some of these orders are adds and some are drops.  The customer has a porting clause in their Service Agreement.   Should I count the adds as new sales and the drops as disconnects, or should I net the amounts and only count the incremental dollar amount as a new sale?

Answer:

Simple answer - A sale is when we provide new service.  A disconnect is when we stop providng service.  A rate change is where we change the amount a customer is paying for the same service.

• If the service requires a new circuit ID, it gets counted as a new sale and a new install.
• If the service disconnects or makes a circuit ID inactive, then it gets counted as a disconnect.
• If the circuit ID stays the same, then you only count the net change in the dollar value of the orders.

We pay commission on Net Installs not Sales, therefore there are no compensation issues with the above.  The sales team is only compensated when the company earns more money.

The bad news is that these types of orders negatively impact our churn number.  We need to make sure that we capture a reason code of “Porting Service” on these disconnects so that we can manage and forecast these appropriately.