Questions & Answers

Questions & Answers

This February we pose the question, is the independent mobile dealer dead? Is there room in the current and future mobile sales landscape for small and medium sized independent businesses? What do you see the future of the UK mobile retail landscape as?

David Plumb, O2 head of SME sales: Independent local mobile phone partners have been one of the favourite ways for SME customers to connect to the mobile networks since the beginning of the industry in 1985. They have always provided a local service and a one point of contact for all issues.

In 2010 they continued to be favoured by SMEs, but now a number of corporate customers also see the benefit of their high level of service. In 2010 alone, O2 has won many corporate customers through partners by collaborating with our Direct Corporate team.

David Plumb, O2 head of SME sales
David Plumb, O2 head of SME sales
 

Customers like to have a choice and this is exactly what partners provide; they do not work for a network and therefore can give true independent advice. They may have closer links to one network over another, but they can still connect to all networks.

Customers are also time-poor, therefore if a local partner can take much of the chasing around away from the customer then this adds value in what they do for customers. They normally have a wider range of products and services for customers, giving customers a consistent level of service across much of their business as well as one point of contact for issues. Customers rely on their mobiles for their business and therefore expect a rapid response if their phones are not working, as partners are mostly local to their customers they can provide a quicker turn around to hardware problems.

We know at O2 that our partners can be relied on to bring high value customers who spend more and stay for longer. In 2010, they grew their new business by over 20%, had their best ever quarters on BlackBerry and other devices, grew ARPU and reduced churn, and all this in a very difficult market and economy. They have also grasped the ‘Joined Up’ communications opportunity.

At O2 we recognise the value that partners bring to customers and have brought them to the heart of the business, where they now are included in building marketing propositions and are part of the experience meetings internally at O2.

I believe that partners are not just any other business and should be seen as part of the family, rather than a threat. They are actively encouraged to build relationships with the direct sales teams at O2. Done in the right way, the relationships between the partner and the direct teams are key to future growth and success.

 

Chris Earle, Unicom operations director:

Jason Kemp, Data Select head of marketing: I hope not or I’m out of a job! This question is asked every year but dwells on retail, not B2B, where the independent dealer heartland is. There are a few independent retailers out there, with the likes of Fonehouse, Digital Phone Company and Chitter Chatter still giving the big boys a run for their money. But as for the future, I don’t believe anyone else will be joining the party.

Outside of the network stores, Phones4U and Carphone Warehouse, the retail landscape is mostly set. Supermarkets will chip away at market share and a few high street retailers will have success with prepay, but I’m not expecting to see any major changes.

However, the B2B dealer market is vibrant with 400 to 600 genuinely good businesses in the UK who are successful in what they do. Working with the networks, manufacturers and distribution partners like Data Select, the future looks pretty good for the dealers that have weathered the economic storm.

Jason Kemp, Data Select head of marketing
Jason Kemp, Data Select head of marketing
 

Shaun Bodsworth, Inform Telecom managing director: The short answer is, no, the independent mobile dealer is absolutely not dead and yes, absolutely there is room.

In many ways, nothing has changed since the late nineties and early noughties. OK, the technology has moved on massively and so have many other things such as commission structures, but the essence of accepting and embracing change remains; those that do will survive and those that don’t will struggle.

Don’t get me wrong, this is no walk in the park and having spent much of my time in the late nineties and early noughties working with independent dealers (mobile and fixed) on a variety of challenges, including conversion from retail to B2B and convergence of products, I know full well that many dealers look at changes in the marketplace as opportunities, and others will see it as ‘The End’ or are simply in denial about it happening.

The increased penetration to near saturation point, coupled with the ongoing development of devices and applications will ensure the market of continued revenue streams, even if this is not necessarily seen as growth.

Shaun Bodsworth, Inform Telecom managing director
Shaun Bodsworth, Inform Telecom managing director
 

The increased convergence of hosted products and access to those products via mobile devices leaves a great deal of room for expertise and close relationships with customers who will not understand this technology, but will certainly benefit from it should they choose to use it. Hosted technologies such as CRM, document sharing, video conferencing and integrated voice services is potentially a huge opportunity for independent dealers to add value as they are without question closer to businesses of similar ilk.

Much of the problem will be however based on the fact that, generally speaking, independent communications providers (dealers and resellers) don’t fully understand the IT elements of hosted solutions and IT resellers do not understand telecoms. I believe this is where the real players will emerge; those that can handle both.

Having worked on a consultancy basis with both IT resellers and telecoms dealers and resellers to help them understand the other part, I have seen first hand the challenges they face. Whether it be the terminology, technology, commercials, billing or service related issues, or simply how to ‘package it all up’, there are many hurdles to jump, but one thing is clear; the continued evolution of communications presents fantastic opportunities for all involved, especially the independent dealer or reseller. At least, for those that seek out the opportunities.

 

Dave McGinn, Daisy Distribution managing director: The independent mobile dealer is certainly not dead; in fact 2011 could well be their time to shine, providing they are willing to evolve with the times.

The independent mobile dealer offers so much to the customer in terms of locality, customer service and the ever important personal touch; all of which cannot be given by a faceless network operator.

In the past, mobile was very much a one dimensional area, but this is no longer viable in today’s unified communications landscape; mobile dealers must view it as part of the bigger unified communications picture if they wish to thrive. It is all about listening to and understanding each individual customer’s needs, and offering them a solution which meets these needs.

Again, price is not the determining issue here, it is more about how the dealer can help his or her customer increase efficiencies by providing them with the right products and services.

As a distributor it is our job to ensure that our own staff and our dealers are dynamic and responsive to customer needs. It is no longer enough to understand the mobile phone market inside out; we need to ensure they are in touch with data, fixed line and more.

Dave McGinn, Daisy Distribution managing director
Dave McGinn, Daisy Distribution managing director
 

We offer regular training exercises for our dealers and monthly WebEx modules to ensure they are kept up to date. And this year we will be making good use of other areas of the Daisy business to ensure we can continue to offer the very best support required. This training is ongoing and suited to individual dealers.

For partners able and prepared to grasp the nettle and accept the changing landscape there is a bright future ahead. The proposition is simple in essence, looking to help customers to become more productive, more efficient and to generate greater return from their mobile and associated communications investment.

The small and medium sized sector within the channel can fill a niche perfectly by becoming experts in the evolving technologies and in guiding customers forward to realise the benefits they can bring to their businesses.

 

Andy Tow, managing director, Avenir Telecom: The independent dealer is far from dead; as far as we are concerned they are alive and kicking. We’ve seen a near 100% growth in the last year and this is set to continue as the independent dealer is able to demonstrate their effectiveness in the SME market.

Quite simply, small and medium enterprises prefer to buy from their local expert. It’s the SME dealers that have, over time, built a strong relationship with their customers: they act as consultants and are generally seen as agnostic experts in the industry.

In order to maintain this position, it is imperative that dealers are expert in their field and so they must keep up to date with emerging technologies, products and services. The networks are continually broadening their product portfolios, including the launch of business broadband due in 2011 in addition to voice, data, landline and applications.

With these new mobile technology trends mushrooming overnight, it will be those who are prepared to invest in the changes and who are constantly looking to adopt new sustainable value services, who will be the ones that lead in the upcoming year.

Andy Tow
Andy Tow
 

We are placing a major focus on this at Avenir, ensuring that our dealers remain at the top of their game and are able to offer their customers the products, services and expertise that they require for their business. It is a constant challenge for dealers, many of them SME businesses themselves. Cash flow and credit, constantly prove to be an obstacle, and tackling this with our ‘weekly commission payment’ and ‘purchasing kit off the back of commissions structures’ helps them to remain alive in the market and able to serve their customers with all the unique selling tools that is instrumental to success.

 

Chris Earle, Unicom operations director: In the last two years the mobile networks have started to wake up to the fantastic opportunities that MVNO partnerships with companies such as Unicom represent. Rather than dealing with numerous small dealers and their related issues (e.g. commissions and clawbacks) networks can deal with a few larger players on a wholesale level.

This simplicity such partnerships offer must be appealing to the networks; we may well see a shift away from them supporting small independent dealers as they bring more MVNO partners online.

However, an increase in the number of MVNOs may actually benefit smaller dealers as they may well find their options increasing if they contact the new MVNOs to discuss offering their contracts in store.

From a network point of view this would simplify their ongoing relationship management. They gain new customers via the MVNO without having to deal with the initial sales aspect or the customer support infrastructure. For example, as customers are contracted to Unicom (and not the network) we deal with the customer service, generating invoices, collecting payments, chasing debt and retaining the customers. Each Unicom mobile customer represents a zero credit risk for the network.

Chris Earle, Unicom operations director
Chris Earle, Unicom operations director
 

In a similar manner, if we were to offer dealer the chance to connect customers to Unicom mobile it would be Unicom that has to perform new customer credit checks and deal with dealer commission and clawbacks.

The advantage for dealers is that an increase in the number of MVNOs could see an increase in the number of offers they are able to range. Independent mobile dealers will survive as long as they are ready to adapt to this change in the market.