Wednesday, 24 April 2013

How I changed the wireless phone market in Canada (and possibly the world)

Sometimes we need to get outside of the box for perspective.

It is just a poorly played game here by the communication companies, they really are missing the point when it comes to profit and customers. These companies are still operating their businesses as if all of these devices where still connected to the networks by a wire. This limited vision has cost them more money than they collectively earn and even worse; they are doing it at the same time as they are burning customer loyalty. What in business is wrong with this?
Take for example my hand set a Blackberry Curve was full priced at $150 and after 12 months the balance outstanding is $108.16. Doing a little math it is costing me about $50 a year. My account has an upgrade available that offers me the new Blackberry Z10 full priced at $650.00 with a $501.00 discount and my current balance I can have it for three years for only $257.16. What?

Even my current phone at $150 I feel I was splurging, why would I want to pay another $150 just to get a newer model?
Well they know the quality of these devices is poor, they have the service records and as a verification question to you; did you buy the extended warranty?
Right. This is a valid option when you know that the device was more likely than not to fail within the service life of the contract. The ideal plan would match the expected service life of the device with the contract term, but you may switch carriers so let's provide a method to keep you a captured client, not a loyal customer. Device fails the appearance of a fabulous discount and you will surely renew your three year contract. What, another two years with these...

This dog eats dog mentality that the wireless service providers are playing by are not creating win-win scenarios for them or their customers. If only they could realise that we know they make their profits off the plans, they tell us that. That the devices are just something used to attract us to them, we know that. So what is it that could make this a win-win?
Treat the customers like the valuable resource they are and stop gouging people for these limited use devices. After all if the client sticks it out to the end of the term you are claiming the devices is free. The $4.11 per month you say I am getting is really built into the plan anyway. But what do you know about the fashion industry?

Now here is the real way to sell handhelds by the buckets at a more real value. Take away that full price $650 Z10, slap on a tag of $25 and you will have so many customers that you will want to raise the price as the supply and demand model would suggest you do, but you should not. Increase supply or better yet offer the less popular models for $15. Why?

Because the fashion model of retailing will tell you that if you set your product life cycle to a short enough time frame the products are less likely to go to the discount shelf. You also realise that by making the devices more affordable people will be more likely to upgrade and every time they upgrade they will want the custom covers and screen protectors. Go easy though and adopt as green approach as possible, with things like chargers. With all the metal shortages reported you would want to minimise your production cost and by keeping chargers, for example, more universal you allow the clients to pick up more covers and cases which I am sure the accountants can confirm have a better margin.

Universal and green, well lets walk down those paths a bit further. It is pretty clear that the wireless companies are compelled to battle each other like a good old fashion turf war. Too bad, because if they were to rethink some of the battle lines they may be able to see how working together can make all customers happy while lowering their operation costs. It seems that all these companies operate their own towers for example and that their handheld devices require this as they have different transmission protocols that are not carrier compatible. Proprietary, hmm.

What if all the effort spent on putting up towers was shared. Then the companies have to make choices like putting up less towers or removing current towers as they are too close to one another. Well that may work but would service on a whole suffer, creating a loss for the customer?

How about relocating towers to create a larger foot print, now this would please the customer I know as there as too many dead zones even though those marketing pictures show complete coverage. Think of it as backing up the service guarantee that must be worth it.

With VoIP and WiFi enabled routers in so many of the customers’ homes today, probably delivered to them by many of the same companies that offer wireless. When do you think they will click on the idea of making the router dual band and more industrial strength to enable these home devices to actually participate in the wireless grid?

Just think about this, these devices will be in climate control locations and have access to power supplied by the customer. They are on a monitored grid. Oh my god! How many thousands of these nodes are already available?

OK, now that you can see some options for delivering better services and what I am sure your accountants can verify, the profit potential without jacking data plans, as it is the data plan that you want to offer. Now that everyone can afford to replace their handheld a couple times a year, watching that game on them really is only a last option. So how many playbooks, iPads etc. do you think you can sell?

Here is a hint. Now that the grid has grown exponentially, dropped signals will be the curse of poorly manufactured devices and you want to recall or accept them back as trade goods to protect your good name. Let's add a playbook or iPad to the back of every headrest in every family vehicle. How many units is that? POP!

To really achieve the green seal, the manufacturing process needs to factor in the returning units collected when the client upgrades. We are being asked to recycle almost all of the products we buy now so we also need to see how the manufactures are incorporating this into their processes.

I will gratefully accept remuneration for the use of these ideas, as I've already lost sleep sharing these thoughts. Better to be used than lost.