11/3/2006 12:01:00 PM
75 dealers now on 3’s axed list
3’s initial forecast on the number of dealers it was going to terminate this week has more than trebled after it toughened its criteria in a meeting on Wednesday.
It emerged on Friday that as many as 75 dealers have been given their marching orders from 3, with 20 described as ‘high profile’.
A large portion of the 75 dealers have been dismissed as ‘very small’ in the number of connections they provide.
The canned dealers were found to have high levels of ‘never pay’ connections, Sim-only deals, tariff downgrades and cashback complaints.
3 is on track to smash many dealers’ cashback models this week by issuing a complete ban on tariff downgrades. Customers cannot switch to cheaper tariffs now for 12 months.
Several more dealers have been placed on an ‘amber warning’. 3 has put a cap on the number of connections they are allowed to do until the quality of their connections improves.
Volume dealers have all been personally warned that they risk of being terminated if they fail to meet quality standards. Dealer jitters intensified last week after 3 said at its conference that it will boost its direct store portfolio to 150 by the end of this year, alongside its Superdrug presence.
Earlier in the week, 3’s CEO, Bob Fuller, said the company aims to reduce its reliance on third party retailers from 80% to 50% by the end of next year: ‘Building our own route to market is very important. By the end of next year we expect to see half of our business through our own channels, half through others.’
3 is trying to kill off troublesome cashback deals after suffering a series of complaints from customers and identifying disproportionately high churn rates from cashback dealers. Between 40 and 45 dealers have already been struck off this year.
The proposed elimination of cashback deals will be preceded by another wave of dealer terminations in the new year with high levels of tariff downgrades – a major component of most cashback schemes.