“I thought we were quite good at the end of 2008, but the market forced us to do a lot more to stay in business in 2009, and we did better as a result. We kept what we had and have grown our business in a declining market,” Sweetlove says.
The main reason for the growth is, states Sweetlove, the business’ increased focus on hardware. “Early in the year we were primarily weighted towards airtime, but over the year we did a lot of marketing on handsets, which worked,” comments Sweetlove.
Additionally, HSC is seen as the safest pair of hands in the market, which is increasing its customer acquisition, claims Sweetlove. “More and more payments are now on a revenue basis rather than upfront. You want to make sure that revenue is safe, and we’re seen as a safe pair of hands to look after that revenue,” he notes.
The mobile dealer base is evolving as dealers from other sectors, including IT and fixed line telecoms, move into the mobile space, Sweetlove says. Yet HSC has been attempting to actively support independent high street dealers, particularly those focused more on consumers, even though that group has been getting the cold shoulder from the networks for some time.
However, Sweetlove adds that he believes those consumer-focused independent dealers are likely to return to favour as the networks and their army of high street shops begin to loose customers, as consumers seek out independent advice on the best deal available to them, with strong customer service. “The more the networks come under pressure on costs, the more independent dealers will come to the fore and be able to build viable businesses. Network operators might have 400 UK shops each, and I’m not convinced they can sustain all those shop estates economically, plus a large direct sales team, when consumers are looking for the best deal and can find out what’s available by going to one independent who can advise them based on their individual needs. Networks are making less money on voice; they need to make more money on data, and that’s why they need to support the channel more, which consists of people that can sell high value products and services to local communities. This is then rise and return of the independent dealer channel!
“Networks are supporting independent dealers in B2B, but not in consumer, which is where we’ve been trying to help,” continues Sweetlove. “We’re fighting to stand up for local dealers on network terms so dealers can serve the local consumer market on the high street, while looking at the Connected Britain idea. We’re diversifying into other products and are making money selling hardware like laptops and gaming machines, not just handsets and airtime.”
HSC has been following a multi product, multi channel approach to market; Sweetlove states HSC is trying to be the mass market distributor for everybody. “We’re not saying you can only sell X product and Y network; we need to help these smaller businesses to evolve in their community, provide what the customer requires and be able to provide an all-round solution, with wireless technology, WiFi, and gadgets for the home.”
As for increasing competition in the mobile distribution sector, Sweetlove notes that Brightstar, Brightpoint and new entrant, Micro P, all of whom come from an IT background, are potential threats but not huge problems for HSC. “I’m only semi threatened by these businesses. What are they offering mobile dealers to move across to them? You need the knowledge and experience of the systems and processes to make it work in this market. Most of these companies will be successful, but we’re more credible at the end of the day. I don’t think companies like Micro P will beat us in mobile overnight.”
On what 2010 will bring HSC, Sweetlove says it is all about domination of the mobile distribution marketplace. “We want to make mobile easy for people not in mobile. We will do even more on the basics for mobile dealers, with more tactics on convergence to help people that don’t already sell convergence to get there. And to sell joined up products, we need to provide tools to help dealers have those conversations. Our aim is to be the best mobile distributor, and the best place to work for our employees.”
Safe pair of hands
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