better, the best time to attempt a cross over?
CG: Convergence means different things to different people. To me it represents opportunity, both in terms of product development and how we approach the marketplace.
When Focus 4 U began trading we concentrated on fi xed telephony solutions. We achieved excellent growth, but it was clear that we weren’t maximising our opportunities.
In 2007 we launched ‘Focus Mobile’ and in two years have created a thriving department that has won acclaim from distributors and networks alike. Recently we were accredited as an O2 Approved Partner, one of only a few in the UK.
In addition to creating a mobile department, we have launched ‘e-Focus’ providing web design and other solutions including VoIP, satellite navigation and IT support.
Why have we diversifi ed in this way? By 2007 we were providing fi xed line services to 1500 businesses. A key strategy was to retain the business we had already won, while expanding our customer base. Diversifi cation and cross-selling were obvious solutions. We now have a larger product portfolio to offer our existing customers, and a far greater opportunity when prospecting for new business.
While fi xed line solutions still generate most of our turnover, our mobile and IT offerings now represent over 35% of the business.
B2B mobile dealers know only too well how fragile their business models can be, particularly after the recent debacle over O2’s ongoing model. By moving into the fi xed arena, they increase their opportunities to sign new business and are more able to control customer churn as client loyalty increases.
Facilitating the move into fi xed line solutions, dealers can take the plunge themselves, setting up BT Wholesale Accounts and expensive billing platforms, and with suffi cient industry knowledge this will allow them to retain all margin. However, this decision shouldn’t be taken lightly. Whether working through distribution channels or direct with the networks, most mobile dealers don’t get involved in end to end billing.
Successful integration requires suffi cient knowledge of the industry, products and processes. For this reason, many choose to partner with existing fi xed line suppliers as they don’t want to jeopardise the customer relationship by providing a poor service.
As for the timing, diversifi cation often saves businesses during a recession. Companies are looking to reduce costs and if you can provide a solution that encompasses mobiles and landlines, you are much more likely to win business.
MB: A new study from Opencloud shows that 80% of 1000 end users questioned view call and text prices as more important than 3G and social networking capabilities. Two thirds of those questioned see social networking applications as luxury additions and non-essential.
How does this continued focus on cost over content affect the direction of independent dealers like Focus 4 U? Should mobile dealers concentrate more on what end users actually want, and less on what the operators and manufacturers are trying to get people to buy into?
CG: This question highlights differences between the consumer and business mobile industry. Both consumers and businesses have become more price sensitive in recent months, each being forced to look at the cost of utilities and choose areas to cut expenditure.
More so than ever, the monthly cost for minutes and texts is the most important consideration to businesses when mobile packages are being reviewed.
In the past, business customers have often chosen a package with more inclusive minutes and a higher monthly cost in order to get a certain type of handset ‘free of charge’. This kind of false economy is now becoming less common. Business customers now recognise that securing the lowest possible monthly bill is more important than updating handsets that simply don’t need replacing.
As a dealer, we fi nd ourselves putting together more straight forward and transparent packages offering a low monthly cost and a sensible cashback option for the customer.
Much like the handset manufactures who seek to push their latest products on business consumers, the networks will have to accept that customers will no longer pay extra for products and services that are non-essential.
If business customers already pay for a data bundle to use with email, they may occasionally browse sites like ‘Facebook’, as this isn’t costing them any more each month. However, it is unlikely that they will consider paying extra specifi cally for services like this until they represent a realistic benefi t to the business.
|The IMPDA (Independent Mobile Phone Dealers Association) aims to achieve a level playing fi eld for its members, and to champion quality improvements in the industry for a better future. For more details: firstname.lastname@example.org|
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