Phones 4u is launching a national rollout of its ‘Just Update My Phone’ (JUMP) contract this week after a nine month trial across 100 stores saw a 15% surge in all handset sales.
The JUMP deal allows customers to upgrade to one of the latest smartphones as often as every six months with no upfront fees. The high street retailer said the offer was in response to greater demand from customers for flexibility of contracts.
Phones 4u now plans to extend the deal to all 568 stores by May this year. It will then launch a nationwide multimillion-pound above the line (ATL) marketing campaign to promote the offer.
Customers taking a JUMP contract sign up for two deals – a 24 month airtime contract with a network operator for minutes, texts and data and a separate 24 month contract with Phones 4u. They will pay up to£3.99 per month above the standard contract rate, allowing them to upgrade as often as every six months without being subject to upfront fees at the point of upgrade.
Once customers upgrade they can choose to pay off the outstanding balance immediately or reduce it by trading in their old phone, paying off the remainder over the life of the contract. Phones 4u guarantees the device will be worth at least £100 for the first 12 months. Alternatively, customers can keep their phone.
JUMP was launched after the retailer conducted market research across several focus groups aged 18-30. The groups looked at five or six postpay variants, including shorter contracts with upfront payments and rental models.
Phones 4u’s director of customer development Alistair Firth said: ‘Technology is incredibly fast moving and moving much faster than market tariffs. Our customers don’t want to wait 18-24 months for an upgrade. Our research showed an absolute desire for more flexibility. Our focus groups clearly liked the fact that 24 month contracts require no cash outlay and give lots of minutes, texts and data, but hated ending up with a phone that is very outdated and not at all cool.’
Firth (pictured) said the focus groups rejected the leasing model amid concerns about losing data once the phone is returned or voiding the warranty by customising the phone. Shorter contracts were seen as too expensive.
Firth said the 100 stores trialling JUMP over the past nine months had experienced a 15% sales uplift on all handset sales. He added that some JUMP customers had already upgraded their phones after six months, with 75% choosing to trade-in more than one device to reduce the outstanding balance on the contract. Firth said: ‘We believe we have the most competitive deal in the market which gives the greatest amount of flexibility.’