Phones 4u: Customer Experience Is at the Heart of Business
2012-12-27 Article by Liu Yang, Jin Ping; Photo by Zhang Haoyi
UK retailer Phones 4u sells a wide range of mobile devices and accessories, both in-store and online. Mobile World interviewed Scott Hooton, chief commercial officer, and John Whittle, commercial director of Phones 4u. They talked about how Phones 4u succeeds amid fierce retail competition, how online selling complements its retail outlets, and how it continuously improves customer experience. They also talked about the cooperation with ZTE, which began this year.
Q: Could you briefly introduce Phones 4u?
Scott Hooton: Phones 4u is an independent mobile phone retailer in the UK. We have 663 stores and two main websites in the UK market.
Q: Phones 4u targets the youth market. What are the usage habits of young people in the UK? How do their habits influence your choice of phones and your promotional campaigns?
John Whittle: We are seeing an increase in smartphone adoption by our pre-paid customers. We expect to see full smartphone adoption at a ￡50 price point and for that price point to lower going into next year as consumers begin to use their low-end, value smartphones for things such as social media, which involve data usage.
Scott Hooton: In the contract business in UK, younger customers use a lot of data; for example, they’re using a lot of social media. Phones 4u has the largest Facebook account in UK for mobile phones. We have more than 500,000 friends on Facebook. The youth market is using social networking a lot more than calls or texts. So that anticipates the devices we buy; we buy very fast phones with fast processors and good screens.
Q: Phones 4u was awarded Best High-Street Retailer in 2012. What is your retail strategy, and how does it help you stand out from your competitors?
Scott Hooton: Phones 4u has a strategy to attract the youth market. Network stores in the UK tend to attract older customers. We can be on the same high street as the network stores bucustomers. So it’s part of our strategy to exist alongside the network stores and treat them as a partner of Phones 4u. In terms of our strategy, we still plan to open more stores in France and UK, and maintain Phones 4u’s position as the number one contract retailer in the UK.
John Whittle: We feel it’s very important to offer consumers choice, so we offer them multiple networks and we offer them multiple mobile phone manufacturers. We ensure that all our staff are trained to a very high degree so that they are confident talking about different operating systems and manufacturers to consumers. This allows the consumer to make an informed choice. We also support live POS in-store (live devices) to bring all the devices to life in the store and help consumers make a choice.
Scott Hooton: Phones 4u also has the widest range of handsets. We have more exclusive colors and devices than any other retailer in the UK.
Q: Customer experience is important in the retail industry. How do you continually improve customer experience?
Scott Hooton: We have a very good sales process. We train our store staff more than twice as much as our competitors. We also have a net promoter score. Phones 4u is one of first mobile phone retailers using the net promoter score in the UK. The net promoter score tells us about a customer’s experience. Phones 4u continues to improve our net promoter score, and we monitor the net promoter score store by store and salesperson by salesperson. So if the store is not performing very well, we can take action straight away. So we always monitor the customer experience. We also video (mystery shop) every store, every month to ensure that the customer experience is good. It’s a big investment and the store doesn’t know it’s being videoed. So a guy has a little camera in his bag; he goes in the store and pretends to be a customer and the store gets marked on that to see if they pass.
John Whittle: We also use customer satisfaction scores to help us make our product ranging decisions. We listen to customers about what they like or what they don’t like. We will not range certain devices if we believe they are delivering a bad customer experience. Customer experience is at the heart of our business.
Q: Consumers are increasingly turning to the internet to buy things. How does this trend affect your business model?
Scott Hooton: In the UK, it’s moving the other way now. More customers are coming back to the high street to get the good demonstration of a phone. They want to see the phone working. In the UK, more than a half of the phones are sold on high street and less than a half on the internet. Phones 4u is investing a lot of money in our internet to make sure our range is the best that it can be. We are doing almost double volume than we were doing before on the internet. But in the UK market, more customers are buying handsets on high street because they can see the handset, touch the handset, and get the good demonstration. So once more Phones 4u is investing in live devices in the store so that we can demonstrate real working phones to consumers.
Q: How does your online selling affect your retail outlets? And how do you ensure the two complement each other?
Scott Hooton: When we introduce a new product to the market, we pre-order those phones through the internet. We try and ensure that we sometimes have different ranges in store and on the internet. For instance, for exclusive colors, we keep a different offer in store and on the internet. We also think it’s important that customers can look at our website, see the product they like, and then go to the store and buy it. We don’t have a big discount difference between the internet and the store.
John Whittle: We know the majority of our consumers research online or visit our website before they visit the store. They go online to educate themselves about our products and come into the store to transact. So the two complement each other very well.
Q: A mobile phone is becoming a mainstream product. Have you considered launching your own-branded phones?
Scott Hooton: We are planning it. Probably halfway through 2013.
John Whittle: We may do that in conjunction with ZTE.
Q: This August, Phones 4u launched ZTE Grand X. What is your expectation of the cooperation with ZTE?
Scott Hooton: We think we will be bringing more ZTE products to the UK market across all bands— high-end, mid-range, and budget. We think we will have a good partnership with ZTE in 2013.
Q: How does a manufacturer succeed in the UK mobile market? What is your advice to ZTE?
Scott Hooton: I would say you need to be brave and committed, and you need to be prepared to spend a lot of money on marketing.
John Whittle: I think it’s also important that you are targeted, rather than going into the market across the entire marketplace, you go narrowand deep with key partners. We started working together very closely, and we believe there is value for both of our businesses.
Q: Could you tell us what kind of revolution may happen in the mobile retail industry?
John Whittle: We’ll see 4G launch in the UK. It was launched in the UK market a few weeks ago with EE. We will see other operators in the UK launch their 4G networks throughout 2013. That is going to be revolutionary for the industry in the UK.
Scott Hooton: Phones 4u is also launching a new warranty care program. If a customer’s phone goes wrong, Phones 4u just gives the customer a new phone. If you break it or crack the screen, you get a new one. The customer always has a phone or uses the latest phone. That’s a big new program for Phones 4u, and it’s called “Phones 4u Care”. That will be revolutionary.