Remember the slew of lawsuits filed by small- and medium-sized resellers several years ago? These companies argued cellular carriers were trying to squeeze them out by paying larger commissions to big-boy retailers like Circuit City and the Good Guys!, while claiming all resellers received the same commission levels. Some carriers also were accused of offering mass merchandisers discounts on bundled phone/service packages, which made it possible for the megastores to undercut their smaller competitors.
Interesting … A recent J.D. Power & Associates study on distribution found wireless products and services sales have dropped among the large electronics retailers.
Go ahead, blame it on the Internet. It sure is to blame (or to thank) for most anything else these days involving exchange of information.
It’s hard to say where the Internet fits into the distribution picture. While business culture for the most part hails e-commerce, wireless carriers and handset vendors say they haven’t seen proof of its value in terms of product sales. But that value is hard to measure. My guess is that the Internet is serving as educator and initial salesman-a quiet, slow-speaking salesman.
Sites like Point.com, which compare rates of several carriers in a given market, are relieving customers from the headache of sifting through all the marketing confusion to find the best deal. LetsTalk.com, Let’s Talk Cellular’s new online store, will offer a spectrum of wireless products and services.
So maybe that’s the reason direct sales-from carrier-run stores, booths and kiosks-have increased, accounting for the majority of sales last year, according to J.D. Power. Research also shows customers who sign up through a direct channel are likely to spend more money per month.
Still, the churn issue remains. Consumer education is lacking, and with no-contract plans subscribers can easily jump ship. Just the other day I was in the grocery store, where one of Denver’s six wireless carriers set up a booth in front of the produce section. Within earshot, I heard a prospective customer ask, “Is this the carrier with those dead spots? My brother told me not to get service with anyone that has dead spots.” I didn’t stick around to hear whether the salesman gave her the short answer or the long one. Then I wished I had, wondering whether he knows the long answer.
Carriers are doing a better job training customer service reps (eight weeks for management-level new hires at U S West Wireless), but now they need to educate their salespeople so they, in turn, can educate customers.
Wireless isn’t perfect. And while the technology keeps improving and those darned dead spots get filled in, carriers need to stop marketing their service as `the clear choice’ because not much is made clear to the customer.
I’d venture that the smaller dealers of yesteryear could teach today’s salesfolk a thing or two.
