Questions & Answers

Questions & Answers

Questions & Answers
 
Cowdry O2
Cowdry O2
 
Masson, Advantage Cellular
Masson, Advantage Cellular
 
Denton, Valista
Denton, Valista
 
Cook, Avenir Telecom
Cook, Avenir Telecom:
 
Turner, fonesure
Turner, fonesure:
 

O2 is putting a lot of effort into promoting its Bluebook backup service for a user’s contacts, texts etc. Shouldn’t this be a normal part of an operator’s service offering?

Cowdry, O2: Yes, perhaps this kind of service should be a normal part of an operator’s service; but O2 is unique in having spent the time and resources to understand what customers really value and to bring this service to market, offering it to our customers for free.

Third-party solutions are available but none can match Bluebook’s unique offering of backing up contacts, photos and automatic saving of SMS and MMS messages. And with such important information being stored by any service of this type, customers need reassurance that their information will be held safely and securely which means using a brand that they trust.

Masson, Advantage Cellular: Third parties I am sure will offer this service but this in my opinion is definitely the domain of the networks. Ask anyone how they would feel about the prospect of losing their mobile phone and the answer usually comes back “it would be like losing a part of my life”. I think this is yet another great initiative from 02.

O2 like all networks has a hard core of loyal and high-ARPU users who I believe will welcome this immediately, they trust their network, and the prospect lost contacts, texts, etc being restored is immensely compelling – particularly if you are a business user. I believe we will see other network operators follow suit in fairly short order; this one is a complete no-brainer.

Denton, Valista: The answer depends on who you are. If you are an operator then yes, it should be a standard part of your offering along with may other similar services. You have made it simpler to stick with you and swap devices rather than swap devices and swap network. In doing this you reduce your churn cost for what is probably a relatively low fee.

If you are a customer, it is more a question of utility and who you trust. Do you trust an operator not to look at who you know and what has been sent in text messages for marketing purposes? Would you rather trust a third-party company? You may have to pay them a fee rather than getting it for free. However, they would make it easy to swap device and network.

But is it worth it, do most customers care? Only time will tell.

Cook, Avenir Telecom: Understandably O2 is putting a lot of effort into promoting Bluebook – it is a unique and innovative service from a mobile operator. Existing customers will almost certainly register to use the contacts back up service, although I doubt on-line daily blogs and the ability to up load photos will ever steer its customers away from using social networking sites such as Facebook or Bebo.

O2 has not restricted the service to O2 customers. Conversion rates from direct marketing to the other networks’ customers who register will be the real measure of the service’s value.

As a third party solution, this type of service would have to be chargeable to the end user to be profitable, and so uptake would be low. In the future, we will see other competitive services like this from operators as the market intensifies.

 
What should we read into the news that Motorola is to split into two companies?
Should we assume that there is no interest in buying its handset business?
 

Masson, Advantage Cellular: The prospect of running a standalone business will attract a “world-class CEO” said Motorola President and CEO Gregg Brown. He also says the spilt “will provide improved flexibility, more tailored capital structures, and increased management focus – as well as more targeted investment opportunities for our shareholders”.

From a consumer point of view this may not mean much in the short term, especially with Motorola’s impressive 2008 handset line-up. But Motorola shares have fallen nearly 50% over the past six months, and are at their lowest levels in five years. Sad times indeed for Motorola who badly need another RAZR range to emulate their fortunes of two years ago; maybe Brown should hire a few of Apple’s senior marketers!

Cook, Avenir Telecom: Despite all the speculation and varying opinions it’s too early to really read anything conclusive into the split. The pressure being applied by investor Carl Icahn is no doubt important in the lead up to the end decision, which saw an immediate rise in Motorola’s share price. If anything this has bought Motorola time to refocus the business and position it as a more attractive acquisition for the right buyer, whilst keeping one of its major investors happy.

 
Now that the networks have wellestablished direct routes to the consumer market, is the only option for the independent retailer the niche approach – with services or products that the networks can’t or won’t offer?
 

Masson, Advantage Cellular: I honestly believe that with the right attitude and business plan there is a great business future for the independent retailer.

This is easy for me to say because I am not a retailer. But I have experienced this from the viewpoint of the network and now the distributor. If you can gain the attention of your chosen networks, either directly or through your distributor; and if you honestly intend to work with and share the network’s strategies; then you have a future.

The networks want both consumer and B2B customers who are credible, creditworthy, loyal high spenders. Nothing new in that, you may say. But ask yourself: how can the networks really penetrate the local community both for consumers and businesses? The independent retailer can access consumers and businesses easily within a 10 mile radius with every service from every network. They can leaflet-drop, phone or employ part-time franchisees to make the contact. And local communities actually like doing business with the local trader.

An independent should get to the parts other competitors can’t reach. Make the network your colleague and not your enemy in the High Street.

Turner, fonesure: With mobile theft now one of the most prevalent crimes in the UK, fonesure’s insurance policies represent an attractive revenue driving proposition for independent retailers while meeting the needs of customers. But outside of our own offering, retailers should look to focus their efforts around increased service, providing their customers with impartial advice that best fits their needs – something the mainline manufacturers are unable to do.

One area to target is the business arena, where customers are seeking inclusive solutions with service, usability, back-up systems and insurance that can be purchased at point of sale.

Businesses require appropriate support for increasing technological advances in devices like smartphones. Thus any advance in product offerings such as VoIP, data applications and video conferencing must be coupled with the assurances that support will be available as and when needed.

By focusing on service, independents will be able to offer a superior package that network providers may not be able to match. Staying ahead and on top of technological advances will be the key to harnessing future business for independents.

Cook, Avenir Telecom: It’s not necessarily about finding services or products that the networks can’t or won’t offer, more about shifting from consumer to business. The opportunities for growth and profitability lie in the business market and resellers should recognise that SME customers provide the most lucrative connections. For example, the cost of sale and margin return on a small business deal of 10 users can equate to 30-40 consumer connections. The ongoing service support cost is also greatly reduced for a business customer compared with multiple consumer connections.

Additional benefits to focusing on business include greater potential for natural connection growth and long-term relationships, particularly when combined with a consultative approach.

What’s important is that resellers recognise that change is required and engage with the right distribution partner to help them through the transition period with support and training.

 
Ofcom research has found that one out of every 10 mobile contracts signed last year
involved a cashback deal, but only 14% of those customers found it difficult to claim
their cashback. Is too much fuss being made about the subject of cashback?
 

Masson, Advantage Cellular: If only one customer has difficulty in claiming their cashback, it is one too many! Unless everyone involved in the margin and supply chain feels and behaves with a customer duty of care then we will never solve this problem. Thank goodness the parachute manufacturing industry doesn’t deliver this kind of customer satisfaction!

As always it is a small number of operators that have caused what is clearly a big issue for our industry such that it has caught the attention of parliamentarians – and of course Ofcom. In the main these questionable re sellers have fallen into two camps, those that have refused to pay customers deliberately and those that have gone out of business. Yes, 14% had great difficulty in claiming; but in a four-month period last year, there were 6,000 registered complaints.

If our industry fails to solve this one with better due diligence, higher authorities under the guidance of OFCOM will step in and do it for us – and that would not be good.

Turner, fonesure: Although the issues are not endemic they are still serious and we should try to focus on the causes of this problem.

When a retailer chooses to sell a product at a potential loss with a cashback element, it is relying on customers forgetting to claim or finding redemption too difficult. I believe this type of solution is not in the customers’ interest.

If it sounds too good to be true, it probably is. It’s time both dealers and customers wised up to the flaws in the cashback model. I would love to see the mobile community less reliant on this kind of incentive and to instead concentrate their efforts on products or services that provide tangible benefits to the customer, such as free handset insurance.

 
THIS MONTH’S PANEL

Lee Cook – Head of business development, Avenir Telecom
Sally Cowdry – Marketing Director, O2 UK
Mark Denton – Director Product Management, Valista
Frank Masson – Commercial Director of Advantage Cellular
Stuart Turner – MD fonesure

 
The following two tabs change content below.