Veteran online recycling company Mazuma Mobile is facing an explosion of competition not only from rising numbers of online companies but also mobile retailers, manufacturers and operators who are piling into recycling after waking up to its growing importance as a retention tool.
Mazuma Mobile MD Charlo Carabott recognises the challenge all too well. He tells Mobile: ‘In 2006 when we launched we were one of three online recycling companies – now there are around 60. It seems like everyone is looking at recycling these days.’
So how can Mazuma Mobile hang on to its share of this increasingly competitive market? Carabott says its strong brand is a key weapon in the company’s armoury. Over the years it has been boosted by a series of TV campaigns aimed at embedding the ‘MazumaMobile.com’ jingle into consumers’ minds.
Irritating as it might be, the jingle has worked, so much so that despite rising advertising prices the company is about to commit £4m to a new high profile marketing campaign. Carabott sees this investment as money well spent: ‘We have established our brand so strongly that if you ask the average consumer on the street where they would recycle their phones, they will say MazumaMobile.com before they would say Carphone Warehouse or the networks.’
Everything Everywhere is the latest business to embark on a fresh recycling push, with a new campaign launched across T-Mobile and Everything Everywhere stores. Despite the market becoming increasingly congested, Carabott feels Mazuma can still distinguish itself from retailers and networks. He says: ‘They may appear to be direct but they use third parties and so their service and prices are just not as competitive as ours.’
Research by the company revealed that customers are reluctant to hand over phones for recycling as they upgrade or sign up to new deals. ‘Our studies show that the typical customer buying a phone does not want to surrender their old phone in the store as they need about a week to transfer data,’ says Carabott. ‘So offering a recycling service at retail level is not that strong an advantage.’
As for manufacturer schemes, Carabott dismisses these as far too restrictive, with customers turned off by tie-in deals and bureaucratic demands such as proof of purchase.
However, Carabott is scathing about the rise of some independent online recycling companies, which he claims have damaged the reputation of the recycling industry. He says: ‘There has been an influx of online companies over the past couple of years that drive volumes but fail on service levels, undercutting us on price but offering grey terms and conditions and taking a long time to pay and often not paying what they promise. Many offer knockdown prices and then once they have the handset use some excuse, such as “excessive scratching” to reduce payments to customers.’
He adds: ‘We have seen a number of recycling companies struggle and others referred to various watchdogs. This is a concern to us because we have worked hard to build up customers’ trust and this reflects badly on our industry.’
One benefit of this, according to Carabott, is Mazuma is able to snatch disgruntled customers from rivals and win back old customers. While market share was broadly flat last year at 30%, he is confident it will increase to 40% by next year, with the returning customer rate predicted to increase from 50% to 65%. And though the company cannot compete on some of the cut price offers online these days, consumers are increasingly recognising the value of its high service levels, says Carabott. He points to Mazuma‘s two-hour reply promise, live chat support and same day payment service as evidence.
Carabott insists no other recycling service can match that offer – no small feat, considering the company processes 80,000 to 100,000 handsets per month, with monthly payments averaging £3m to £5m. ‘Our reviews say it all, with us averaging a trust score of 98% over 57,000 customer reviews… Customers are wowed by our service and assume competitors give the same service. Then they realise they don’t and come back to us.’
52% of handsets currently sold to Mazuma are smartphones, with the following split:
Editor: Carol Millett