Despite the shaky state of the economy, Andrew Boden, MD at Everything Everywhere distributor Mainline, says that the business is doing just fine.
‘We are mainly b2b and we are doing OK,’ he says. ‘We have the largest base in UK distribution and upgrading contracts is the biggest part of the business as the whole market shifts from acquisition to retention.’
Boden says the emphasis for Mainline this year and into 2012 is all about retention, loyalty and minimising churn. ‘To ensure this you have got to have the right relationships in place, which is easier said than done, as someone else is always prepared to undercut you.'
As he points out, it is a very competitive environment, so a distributor needs to differentiate itself through its service levels, track record and by supporting its dealers’ accounts. In turn, he says, dealers need to be supportive of their customers throughout the life of the contract and not just in the last three months when the contract comes up for renewal.
Boden says Mainline’s role is to find the areas where it can add value for Everything Everywhere and the dealers. Helping dealers support their customers more efficiently is one such area.
‘Often there are weaknesses in the dealer’s processes in terms of keeping in contact with customers,’ says Boden, ‘so we try to capture best practice in terms of maintaining proper contact to help dealers ensure they are meeting their customers ongoing needs throughout the life of a contract. By keeping on top of this we can help improve retention rates.’
Mainline’s iManage portal contains information for dealers available 24/7 on data share, revenue share, commissions and payments. Boden says there are a lot more transactions going through now, so Mainline’s IT platform helps provide dealers with more transparency on their customers and on how well they themselves are performing.
‘For example, if they see a customer has a big spend spike over the summer, they may see an opportunity to sell a travel bundle or booster,’ says Boden.
One impact of the increase in revenue share introduced in July 2010 is that dealers now have to put proposals together based on future income predictions. Those predictions are in turn based on an estimate of what dealers think their customers will spend over the lifetime of the contract.
The difficulty in making that prediction is that the dealer does not know what a new customer’s ‘out of bundle’ spend will be. Mainline is helping by analysing ‘out of bundle’ historic spend on a monthly basis to provide a guide for dealers.
Boden says the ability to sell T-Mobile as well as Orange since the formation of Everything Everywhere has been the other major change along with revenue share. Mainline has launched a campaign on the back of the quality of the network and is hoping to double its T-Mobile share, although Boden admits it isn’t always easy to persuade hardened Orange dealers to promote the second brand.
In addition to the dual network offering, Boden says Mainline is seeing an increase in the sale of value-added services, such as extra UK data bundles and overseas data bundles.
This is being driven by the massive uptake in smartphone sales. ‘One year ago, 30% of the handsets we sold were smartphones – it is now 70%. That means more upfront cost for dealers, as smartphones are more expensive, but the upside is that users tend to spend more if they have a smartphone,’ says Boden.
Mainline also provides help to dealers with marketing material through its Blueprint Marketing service. Dealers can access the portal and find templates for posters, leaflets, newsletters and other collateral, which they can customise with their own names, logos and contact details.
Blueprint also has a handset widget that allows dealers to promote a full handset range on their website. All the information comes from Mainline’s central systems but looks like it’s hosted on the dealer’s website.
Boden says recent growth in the dealer base is largely coming from other channels. ‘We are getting more and more enquiries from fixed-line and IT resellers. Convergence is now a reality, but it is still only just starting to take off.’
While he has looked at many converged products, and continues to do so, Boden says he has not yet seen anything that passes his tests: Mainline must be able to add value to the proposition, and there must be good margins for all concerned.
Looking ahead, Boden says: ‘I often say to my staff and dealers: it is a commoditised market, so ‘speed and quality’ of service is where we can make a difference. We have a 100% success rate on shipments, we get it right first time and we are the most accurate for dealer payments, so less time is wasted querying payments.
‘I think we are very well placed despite the economic climate. We are in a healthy financial position with good cashflow and good cash reserves and we are part-owned by one of UK’s biggest companies with a very strong customer base.’