Questions & Answers

Questions & Answers

For mobile distributors and dealers: What is the best way to prevent customer churn? How can you make your customers more sticky to stop them jumping ship for a lower price or extra freebie? How big a problem is churn in 2011, and is it likely to become more of an issue going forward? Why?

Julien Parven, Daisy Distribution head of marketing: For us, there are very much three elements to what we call the churn cycle: network churn; distribution base churn; and partner base churn. We believe that an approach to getting them all right is key to us succeeding in this area.

The first element, and the most traditional method of preventing churn, touches on the importance of retaining customers on their current network. From our perspective, this involves helping the partner to recognise the significance of developing the customer relationships on that network, instead of attending to new business being generated from migrating a customer from one network to the next. This then allows time to explore traditional ways of generating new business, including targeting specific sectors in the business market place which haven’t been fully exposed to converged mobile technologies.

Elsewhere, preventing churn on the Daisy Distribution base focuses on understanding the customers which our partners have brought to us and how we need to help partners engage with them, so that they remain indirectly with Daisy Distribution.

Julien Parven, Daisy Distribution
Julien Parven, Daisy Distribution head of marketing
 

Again, key to this is helping partners understand customer engagement and the principles of account management, fault resolution and complaints handing, as well as exposing them to new and exciting technologies that offer increased customer interaction, which small companies in particular may not currently address.

For us, the third element to this is preventing churn on our partners’ bases. There’s no value to Daisy Distribution if we are seeing customers leave one partner to reconnect with another.

Our aim, therefore, is to create a model that encompasses each of these three elements. Finding new business is becoming ever more difficult, which puts even more focus on managing customers, retaining them for longer, and becoming more entangled and integrated into their business.

In order to achieve this, Daisy Distribution has developed a much more encompassing range of products and services beyond just mobile, which has created multiple points of contact with customers within the supply chain. It undoubtedly makes that relationship with the customer stronger by helping partners position themselves as a supplier and starting to integrate their mobile offering with fixed line, and communications with IT.

This works to greatly reduce churn if a hostile provider, who is not engaged with that customer’s business, comes in with an offer only focuses on a single dimension and on a single element of the mix, but cannot give the same level of value and return on the initial investment.

From our perspective, there have been huge strides in managing churn and it will continue to be a focus for us this year. While I’m never going to say that churn isn’t something we need to be constantly aware of, we’re reasonably confident that we have the tools and the partners around us that share the same values and principles that we have.

If you look at the wider industry, I’m sure that the churn experienced within the consumer space and the retail environment is huge by comparison, as customer engagement is more difficult to manage. However, with Daisy Distribution as a leading protagonist within the distribution sector, I think there is a strong handle on churn and a strong desire and will to make sure that we don’t go backwards from where we are.

 

Shaun Bodsworth, Inform Telecom managing director: With the risk of playing an old record, the basis of reducing churn is staying close to your customers and selling additional services. Particularly for dealers in B2b markets, now is an exciting time with new technical solutions available and a firm move into cloud based converged IT and voice products.

Dealers (some are much better than others) have long been guilty of not staying close enough to their customers throughout the life of the contract. Of course, most get very close to their customers at contract renewal time, but that could be too late. With all of the exciting products and technologies on the market now you can be sure that if you are not talking to your customers’ about these, someone else will.

As for distributors, the principal is the same, but providing that product portfolio and sales and technical support and training to the dealer community is vital. There is much trepidation within the mobile dealer community about how they can break into non-traditional mobile services and this is where the support and training will pay dividends. It’s actually quite simple, so why don’t they do it?

Shaun Bodsworth
Shaun Bodsworth, Inform Telecom managing director
 

Andy Tow, Avenir Telecom managing director: Customer churn has always been an issue for the mobile industry, and there is no one way to completely eliminate it from the product life cycle. However, focusing on retaining customers can evidently reduce this effect as we have most certainly seen at Avenir.

Having worked hard with our dealers over the past couple of years to help them to keep churn as low as possible, we have seen a massive impact in building strong relationships with customers. Staying in touch is an absolute essential; relationships are the key. It is a well known fact that we would all much rather buy from someone that we know and trust.

Continually supporting the customer and understanding their changing business requirements, not only reduces the possibility of losing them to a competitor, but also raises the opportunity to up-sell and lengthen the relationship. Our dealers have found that regular visits or simply a quick phone call to check that all is going well undoubtedly helps in keeping customers happy.

Our dealers have also understood the importance of keeping customers informed. 2011 will see a mass of new products come on board, in particular a huge range of smartphones and a variety of operating systems, and customers need somewhere to turn to for advice and guidance in choosing what is right for them.

Andy Tow
Andy Tow
 

If they have the support that comes from a well informed dealer, combined with quick backoffice processing and a fast dispatch process, there is little need to worry about customer churn!

 

Nathan Mitchell, IT channel manager for mobility, Brightstar Europe: Preventing churn is all about customer service and support, really. We offer our resellers and dealers training and development; our Partner Programme for BlackBerry includes pre-sales support, marketing support and sales and technology accreditation.

We will also often help our customers sell to the end user; I will often do a conference call with a reseller and his customer. If a reseller left us to go to another distributor that just sells on price, they would lose all that support that we offer as part of our service.

One of our offerings, which also help to prevent churn, is to introduce new technologies into businesses. At the moment, Palm is doing a solution sell using the Palm Pre 2 and Web OS, so we are saying to our customers that this is something they should look at, and if they’re interested in it, we offer training and support.

We are focused not on shifting boxes, but on solution selling, so helping dealers move into the solution sell and to cross sell into other areas of our and Computer 2000’s business. That is one point that makes us stand out.

Also, we utilise Computer 2000’s logistics, so we literally have the best logistics in Europe; our warehouse in Leicestershire is one of the most advanced warehouses in Europe, with 500,000 square feet of space and 2.5 miles of conveyer belts. From that warehouse, we can offer complete fulfilment services, including whitelabelling, SIM pairing, and putting together phone packages tailored to the reseller’s needs.

Another reason our churn is and will remain low is our financial stability; being part of the Tech Data Group, a £24.4 billion company worldwide, means people trust we will still be around in the future. All good reasons to join and stay with Brightstar Europe.

Nathan Mitchell, IT channel manager
Nathan Mitchell, IT channel manager for mobility, Brightstar Europe
 

Chris Earle, Unicom operations director: Although Unicom is not a mobile distributor or dealer, as an MVNO we are sensitive to churn. Our preventative measures revolve around providing excellent customer service at reasonable prices.

Customers may well be able to find lower prices or freebies for switching to a different provider, but in switching they lose out on something that is increasingly rare across all industries; good customer service.

As a Unicom customer, for any product, you call an 0161 number to speak to a UK based customer service advisor in under six seconds. There are no automated menu systems to wade through, no looping messages of apology for the wait, no premium rate technical support lines and absolutely no offshore, script-reading, poor- English-speaking, customer service advisors.

Creating sticky customers is often a combination of delivering good customer service while supplying the customer with multiple products. The more products a customer takes, the more likely they are to stay. They become used to having a single point of contact, if providers offer a diverse range of services it can be a big undertaking to switch everything away.

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

For Unicom that means selling broadband, mobile phones and other business related services into our existing fixed line customer base. Dealers could look to enhance their service by identifying other products their customers could benefit from; a number of independent dealers already do this by sourcing gas or electricity deals for customers.

Distributors could look to offer additional services to their customers, for example offering handset insurance or working with retailers to integrate their website with the distributors ordering and dispatch system.

Providing a diverse range of services backed up by excellent customer service will help retain customers for years to come. And if they do leave, they’ll soon come back after realising the other providers grass isn’t as green as the sales person made out.