With now almost three months of operating from various places in Europe and with more than almost sixty percent of my time load this year spent traveling or being in either the UK, or just being on the road at home, I’ve found that for both professional and personal reasons I’ve spent a lot of time dealing with mobile phones, visiting various shops and talking with the various operators, all the while increasing my share of knowledge from first hand, user based experienced.
Without a doubt the most intense market in the western world for Mobile is the UK. Not by number of operators, as the MVNO explosion in places like Spain, the Netherlands and even France has provided more consumers more in the way of “choice”, but encouraged by the the dramatic rise of the retail mobile chain Carphone Warehouse (their sibling in the USA is Best Buy) and their almost on every block in major cities EU siblings, PhoneHouse, has literally created the most intense competitive set and in turn spurred a culture where customer facing knowledge is the kind of battle usually reserved for the cricket, football-soccer or rugby pitch.
Make no mistake, competition at retail in the UK is fierce for the mobile customer’s pound, and what’s more it’s no longer just for voice and “plans” but ever increasingly we’re seeing the fight shift to the mobile broadband data world as well.
With MVNO’s like Virgin, Lebara and a bunch of cheap minute plays too, consumers in the UK, unlike in the USA really do have choice in plans, prices and provider, just as they do with broadband data in most of the country. And, it’s these wide ranging number of service options that are available that have also made the more competitive price war possible, while still maintaining margins. But it’s more than just walking in and asking questions. I’ve gone forward and put my money on the table and become a customer, in multiple markets in order to learn first hand more about the UK market and elsewhere.
As background in the UK I’ve signed up for and used no less than four mobile operators (T-Mobile, 3, Vodafone and Orange). Working through some half dozen countries or more in the last 20 months, has led to the purchase of Wi-Fi, 3G data or mobile phone services in most-France (Transatel, SFR and Orange), Spain (Orange, Movistar/Telefonica, Yoigo and MasMovil), Portugal (Vodafone), Germany (T-Mobile and Vodafone), Belgium (Mobistar) and even Italy with TIM. On earlier trips to Sweden and Denmark as well from both 3 and Telia-Sonera.
With Wi-Fi the connectivity has been better, with higher speeds and much less latency too. The same has held true with most hotels where the speeds may not be as high as in some USA hotels, but the upload has been better, allowing for more T-Mobile UMA, Truphone and Skype calls over WiFi without any hiccups.
One observation though came this week in Austria though, when it became obvious to me that in the USA mobile phone operators sell products, while in the EU and UK they sell service.
The differences are telling:
USA - 1) Walking into a store in the USA means having to sign in, wait and then get called, then referred to a “specialist” if one is available or hope and pray the “rep” can answer questions professionally about more than what’s being promoted-often times they can’t. Average time in a USA store is 15-30 minutes and this does not always end in a sale. The only recent difference to this has been Sprint in Encinitas, CA where the rep was whip-rocket smart and had me in and out in less than ten minutes. (She was so good and so unlike any other USA based store clerk I wanted to hire her on the spot.)
EU/UK-1) Walk into a shop in the EU or UK means you may have to take a number, but not often. The staff is very much aware of what is needed, and when buying pre-paid, even when dealing with a language barrier the transaction is truly painless.
In the EU and UK the sale of data plans, and SIMs, data dongles, etc. is simple and efficient. The knowledge of locked and unlocked devices is very high, and how and where to go to get the device unlocked is common knowledge and not kept secret. Most of all the average time spent in a store in the EU or UK is under ten minutes and usually less than five with a sale. This is a dramatic change from a few years ago where pre-paid data was few and far between, but in a scant 24 months I’ve seen it became as plentiful as water.
USA-2) They want to sell you a phone and lock you into an two year agreement. The plan is secondary.
UK-EU-2) They want to sell you a plan, and the device and length of agreement is secondary. If you Bring Your Own Device (BYOD) they don’t care.
USA-3) Prepaid-Rates in the USA for Prepaid are much higher than the lowest, or even so called unlimited rates. Prepaid data is limited and those lower priced value carriers like Cricket and Metro PCS don’t easily enable roaming.
EU-UK-3) Prepaid-it was pretty much invented in the EU and UK and more and more offers are for either pre-paid or contract less, monthly rolling terms. The knowledge of the staff regarding which option a customer should choose are far deeper than what I see in the USA, and even in countries where producing proof of your identity is required (Spain for one) the time it takes to get turned on is usually less than five minutes. The same in Austria, Belgium and the UK. What’s more the options for Prepaid data are plentiful as are the range of dongles, with the only rub being many operators want to sell the dongle too due to the rebates from the manufacturers, which seems to be two from China, Huawai and ZTE.
USA-4) Topping Up is a subject I wrote about earlier this week, explaining just how easy it was to top up in Austria, or as the convenience store clerk called it, AutoLoad. In the USA it’s not so easy. Finding a scratch off credit is not as easy and last I checked there’s no voucher system in the USA like there is in the rest of the world. Adding credit means setting up a credit card or finding the scratch cards. For the USA operators, the coming in late to the party in the pre-paid market is mainly because it was viewed as the market for the “unbanked,” but in reality the approach reduced the ease of trial and adoption that foreigners can have even beyond having to know where to find the scratch offs, vs. finding Top Up terminals in supermarkets, convenience stores or even via the ATM with a local credit or debit card.
The unbanked were the segment of the market that was the first to use Tracfone (own by TeleMex’s Carlos Slim) which may be the most successful pre-paid program going in the USA. That may be because Slim and Company figured out how to make the process of adding call-credit easy for a public that wants simplicity in their service, and is willing to pay a slight premium for it.
EU-UK-4) Topping up in the EU or UK is as simple as finding one of literally thousands of top up locations. The big difference is in the approach. The EU and UK mobile operators see themselves as selling a service. That’s one of the reasons for a better retail experience. But it goes deeper than that. The EU and UK operators also set out from the beginning to make sure what they sell works. Other than when my iPhone roams on O2 in the UK, I have never experienced a service related issue. Speeds are as promised on the data side. Calls placed complete as long as there is coverage, and what’s more the overall ease in which things work, ranging from adding short term services (as I do each trip with T-Mobile in the UK) for mobile data on the Nokia E71 or topping up credit on either my Vodafone or 3 data dongles takes no time at all.
Nothing is so complicated, even in foreign languages that can’t be figured out (even if sometimes Google Translate is required). Only once in memory has anyone really tried to “sell me” a phone, and that was because the pre-paid SIM from Orange was free with the phone in France, than without it saving me some 30 Euros that day. To me, that’s not selling a product, that’s knowing how to better service the customer.
And, when it does come to devices, the product knowledge on the sales floor, especially with the SmartPhones is always far higher.
A few years ago, when starting the Nokia Blogger Relations Program, we decided to use AT&T prepaid SIMs. The process was laborious and at one point in time, only I could do the top ups. In the UK or EU if we wanted 30 – 50 prepaid SIMs today, it would be easy to just walk into any Vodafone, Orange, T-Mobile or 3 store or Carphone Warehouse and the would hand us the SIMs charge really what is for the top up, not the SIM, activate each one and quickly sell me any more of the vouchers that would be needed to continue to top the SIM’s up. Thinking back to the hours my staff and I spent on that process just four years ago and my own personal experience again last year with the AT&T GoPhone, it’s reminiscent of nails on a blackboard, versus a skate on fresh ice, or a run down the slopes on fresh powder.
But that’s what happens when you have a product culture, taught in business school, honed by Coke, Pepsi, GE, P&G, Levi’s and Miller Brewing driving the customer experience today. Even Starbucks, which has fallen over the past few years has too lost it’s market leading edge because it became all about the product and not the service experience that got them to the top. When you look at McDonalds, or Dominos, they are in the food service industry and yet, even in down economies they find ways to thrive. So while they may continue to bring out new products to stay ahead of the competition, they still remember to make every experience about the “servicing” of the customer. When you think about it, they really don’t try to “sell” you the product, the service experience is what does that itself.
To put it another way, the world’s oldest profession, has never been productized, and those that practice it, always “service” the client. Given how long that industry has been around, one has to think that being service oriented, versus product oriented, sure keeps the business going, and the customer “happy” in the end. Given the product centric approach we find in the USA being so rampant we also know one more thing from experience, that being “just who is getting screwed in the end” vs. the more service oriented approach, where the customer can leave, and when they do, know they left either doing the proverbial screwing or knowing they can by simply taking their business elsewhere.
So there you have it. Does you mobile operator sell products, or deliver you service? In my mind as we move to a more services based technology economy, it will be the operator who understands “service” and that it means who will win the hearts, minds and wallets of the customer.
It's sad to see how true this is. I've spent my entire life in the U.S. market, and every time I travel internationally, I'm floored at how quick and easy it is to get a SIM for my unlocked phones, and one with unlimited data (voice is of little interest to me, oddly).
I can't help but wonder when the U.S. market will open up to prepaid. Even now, with Boost Mobile's $50 unlimited *everything* plan, prepaid is the obvious cheaper option, unless of course you want a decent phone (or to bring your own).
Posted by: Ricky Cadden | August 26, 2009 at 07:51 AM