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How Dealers Can Make Money In Wireless

How Dealers Make Money In Wireless
How Dealers Make Money In Wireless

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I had the opportunity to be interviewed during the inaugural Dealer Success Summit (DSS ’21) in May as part of National Independent Wireless Dealer Month. DSS ’21 was an entire month long virtual seminar! Each week-day featured as many as 4 sessions (each no longer than 30 minutes.)

DSS ‘21 was designed to educate the dealers on how to become more successful. The two main tracks were "Making Money in Wireless" and "The Future of Wireless" - Each day started with a keynote, (including one by every major carrier and MVNO (Sr. VP and above), and then each session was with either a successful dealer (cross brands) sharing their "tips for success" or a vendor with a revenue generating product line. In addition, we spoke with the leading trade journalists, researchers and top-consultants.

The full video of the interview is on my website at https://atriumunlimited.com/my-dss-21-session/ and also further down below.

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The subject of the interview was “How to Make Money in Wireless.” The interview was conducted by Mark Landiak, President of Corporate Dynamics (https://corporatedynamicsinc.com/) and Adam Wolf, President of the National Wireless Independent Dealers Association (https://nwida.org/).

Some of my discussions centered around:

  • having a dialogue with your customers to see what their actual wireless needs are
  • increasing the register ring by offering accessories and addons like device protection, telemedicine and roadside assistance apps and upselling to higher revenue plans

Here are some excerpts.

Mark: Hi, everyone, and welcome back to the Dealer Success Summit Series. And boy, I'll tell you we've got another great show for you today with Adam Wolf from NWIDA. And hello Adam.

Adam: Hello, Mark, how are you? Sorry I couldn't be in the studio with you guys today.

Mark: We've got a guest with us today, Jon Horovitz. Jon, are you out there?

Adam: Jon, how's it going?

Jon: Very good. Things are very busy in the dealer channel in wireless. A lot of great stuff that's happening, as you know.

Mark: Well, we're going to talk about that today. Yeah, it's as you said, a lot of great stuff going on. Jon, like myself, is another consultant. And he works for...

Jon: Atrium Unlimited Consulting, that deals with a lot of dealers, the carriers, MNVOs. I advise a lot of investment folks that are looking to get into the business. And I've been doing it since leaving the carrier business, which I spent years with building the distribution in the New York metro area for AT&T Wireless, also Nextel Communications, and Boost Mobile.

Adam: Jon, let me start with this. Differentiation is always the key. It's usually key on the MVNO side. But the dealers need to set themselves apart too. How, in your opinion, can a dealer do that, especially if they're a particularly branded store, and then maybe if they're multicarrier.

Jon: Well, Adam, differentiation is the key. I've written about it. And even if you are a branded store with one of the national three or four carriers, MVNOs out there, the key thing is to set yourself apart. And the number one way to do that is to know your customer. Whether your customer is a certain ethnicity, whether your customers a certain income level, and when that customer walks in the door to your store, they're coming in to buy a phone, they're coming in to add an accessory, they're coming in to pay their bill. And when you've got that customer there, you've got to know what their needs are, and ask and listen.

This is an opportunity to talk to your customer and say, “Listen, how is your car charger? How is your external battery pack? How is your screen? Can I see it? Do you need a protector?” and really know what is their pain point with their product that they're using. Because as we know, the phone now is the key thing that people have in their lives for communication, for information, and especially during the last year with COVID, remote working and learning. So, I think the key thing to differentiate as a dealer whether you're a chain, whether you're a very part of a one of the big carriers is to really know what's your customers' needs and pain points by doing less talking and more listening to see what they need, and not rush them out of the store, even when you're busy. Give them a free accessory when they pay their bill. Get their credit card information to ensure that they're going to be with you for more than 90 or 120 days.

Mark: So, you're talking about listening for pain points, what exactly are we listening for and what should they be coaching their teams to be listening for?

Jon: Well, Mark, I think the key thing is, what are you using your phone for? Are you using it just for a data hotspot? Do you have enough data? Should you be upgrading your data package? Are you traveling? Are you calling internationally? Are you calling a specific region? Are you calling the Caribbean? Are you calling Europe? Are you calling you know Asia? Because the MVNOs have differentiated themselves to provide different unlimited international calling to certain regions, and you want to make sure that they've got the right product, if you're a multi carrier dealer.

If you're not a multi carrier dealer, you want to listen to them on certain things on, how do you use your phone? Are you primarily in the car? Do you have a car charger? Are you primarily working in a building? Or are you underground? Are you outside? And just find out different ways that you can help them and give them more product. Do you have insurance on your device, device protection?

See also:  How To Start Your Own MVNO

One of the things that we did at Boost was device protection, because people were dropping their phones and people were losing their phones. So, we had about a 35% attachment rate to device protection. Were they in a situation where their phones were getting banged around on a worksite, etc.? So, ask those kinds of questions that really find out where are they using the phone, how they're using the phone, and then tailor your add-on sales to those needs.

Mark: Do you think that training our people today, maybe even more so than ever is critical, perhaps even using a questioning outline of some sort so that we can roleplay with them on a more regular basis? Are you advocating that as well?

Jon: Well, one of the things that we did in the off hours, that was before the store opened up, the store opened up at 10:00, we would have our teams in there at 9:00. If they closed at 7:00, we would be in there at 8:00 PM. And we would do role plays, and we would have checkoff boxes on what they asked, what they didn't ask. I don't want to say we’d grade them, but we would coach them on how they should be selling and what are the points they should be hitting this month, whether it was a promotion based if there was 4 for 100, if there was a bundle with service, if there was a new product that we're putting out there. So, yes, I'm very, very, very strong on role playing and making sure that, when we're not there watching and listening, that the person behind the sales counter can flawlessly execute on the plans that the carriers have put out.

Adam: Jon, you mentioned accessories a couple times and things like discounts when they come in to pay their bill every month, giving them a few percentage points off and accessory, things like that. Any other accessory tips, obviously especially anywhere, whether it's a carrier, whether it's an MVNO prepaid, postpaid, obviously the dealers can't do anything with the actual rate plans. But you got any good hints on accessories?

Jon: The best sale I ever saw happen to myself. when I needed a phone. And the guy behind the counter, after he got the phone, programmed it, the whole thing, he asked me to pick out a case. I went over and I picked out a case and as I was picking up the case, he took the screen protector off of the rack and applied it for me. When he rang up the sale, it was for the phone, for the case, and the screen protector, was probably $19.99. Now I didn't order that screen protector but It's on. I needed it. But here's a guy who took the bull by the horns, and he just decided, “We're going to put the screen protector on.”

Now had I argued, had I said I didn't want that, maybe he would have given me 50% off. But I thought that was one of the best efforts by a salesperson to sell an additional accessory. Again, the rule of thumb is or used to be when you had a good flow of customers coming into the store, that you want the salesperson to do about $100 add-on sales on accessories. So, when you take a look at a case, a car charger, and a screen protector, you know you're getting there.

That's why there’s been some pushback and some difficulty for dealers selling additional add-on products like insurance. You're not going to insure a $49 phone. In most cases, most of the insurance is coming on the higher end phones, over $300 to $400. But when you have other things that third parties are offering, like road protection and telemedicine, these are great add-ons. But it's very difficult a lot of times to sell it to the customer, once you've sold them $80 to $90 worth of accessories.

There are some products out there that offer telemedicine, roadside service, legal services, etc. But that's got to be driven, not by the dealer but by the MVNO and the carrier.


DISCLAIMER: BestMVNO.com does not agree with the particular sales tactic described in this interview. This is a sales tactic designed to take advantage of unsuspecting and uninformed customers. And in many cases, it's also taking advantage of customers that may not have a lot of money to begin with and forcing them to pay for more items than they can afford. It's common practice in business to try to get an upsell, and BestMVNO.com finds nothing wrong with that. However, trying to force an upsell upon the customer as described in this interview should be frowned upon. BestMVNO.com believes a customer being strong armed by a sales person like this should either calmly refuse the items or walk out of the store.


Adam: You touched on exactly where it's going to go. Somebody goes and reaches for a case, it's a natural progression to grab a screen protector, and probably even mentioned insurance, depending on the phone at that time, because now you've got a protection bundle.

Jon: Right. Absolutely correct. And the key is, remember, making money in wireless. Now with so many of the carriers with their independent dealers, they're putting phones out there on consignment, the carriers own the inventory, the dealers have to sell it for certain a price, there’s no discounting of the rate plans, as you mentioned, where can I make money in wireless?

Well, it's accessories. It’s add-on products. It's device protection, etc. There's a whole long list of things that dealer can do at the retail store, and online, which is, again, another channel that's been embraced during COVID, by the carriers. There is a great opportunity for the dealers to continue to make some decent profit by upselling.

See also:  Simple Mobile Is Top Selling Brand In 2Q21 Dealer Survey Conducted By Wave7 Research

Mark: With all of the concepts that you're talking about if you're going to get to $100 add-on of accessories sales, you may not get that on the first sale, but that repeat sale and bringing that customer back in, getting it to when they come in to pay their bill or whatever it is, is so very important. The key ingredient is that store manager and your ability to assess, measure, coach, and train their people to do all of these things that you're talking about. What's the advice that you have store managers for making all this happen? Because it has such a huge impact on store profitability at the end of every month.

Jon: It is a 3-legged stool. Number 1 is training. Number 2 is rewarding through compensation or spiffs to the person behind the counter doing the sale. If they don't have a reward for them to do all this, they're just going to get the customer in and out.

And then number 3, I mentioned earlier about getting the customer's credit card information so the carrier can automatically bill them, so they stay as customers. But it's also key to get their email address. You've got their phone number, but nobody wants to be pestered on the phone. But if you're emailing them, and it's coming from a recognizable email, XYZ wireless says, “Hey, that's where I bought my phone.” And just following up on a quiet Tuesday afternoon, when no one's in the store, maybe you send out 15 emails to these customers and say, “Hey, hope you're happy with your service. Give us a call. Would you like to come in? We're having a special on accessories, etc., etc. Hey, don't forget, in another month, you can upgrade.”

Just communicate with your customers and make that customer someone that is not going to think twice about coming back to your store location.

So much is driven now by the carriers of what you can and can't do. But there is still a very large opportunity to do things other than just the handset and the rate plants. There's so much more that the dealers can do to generate revenue.

Adam: Because you touched on it real quick. You said there are times when the stores are so busy that the mindset is, “Alright, let me get your money and get you out.” And this is something, that just screams that your store is understaffed?

Jon: Correct, what a bad problem for a retailer to have too many people in the store! Hopefully the store manager hopefully is rolling up his sleeves and he's working side by side with his employees. And with today's technology and tracking, are they're saying, “Okay, these are our busy hours. These are our slower hours. And we probably need to bring a part-timer in on these busy hours, whether it's a weekend or a Thursday night.”

They know their patterns. Again, they’re different every store, whether you're in the boroughs of New York or downtown Chicago, Los Angeles, or if you're in the suburbs where people are driving to your location versus walking or taking the subway. Absolutely, staffing is key. The worst thing you can have is to have somebody come to your store and not be serviced and leave.

Mark: Well, Jon, you've given us a lot to think about with regard to taking care of our customer. But that begins with knowing our customer. And you talked about asking a set of questions that are different perhaps than the questions that we've asked in the past. guys. And if you'll go back and you'll listen to the front end, Jon gave us a list of about 10 different areas that we should be asking about that we're not asking about right now. And he also talked a little bit about some different products and services that, if you're not offering in your store, you may want to because those are incremental profit opportunities. And at the end of the day, it's all about how successful are you in incorporating those incremental profit opportunities that Jon was talking about into your business so that you can grow your store profitability?

And then we talked about the accessory side of the business. And how can you grow your accessories to $100 per customer per phone? That's not an easy thing to do” But the reality is it is possible. You need to just focus on it on a day-in-day-out basis. That takes coaching. That takes training. That takes attention to detail. And Jon, did I miss anything? I think I got most of the points that you were driving at us there.

Jon: Congratulations to both you and Adam on DSS’21. It is a terrific thing you guys are doing to help our independent dealers out there. Because at the end of the day, the wireless business was built on the backs of the wireless dealers.



Jon Horovitz has been in the wireless industry as a senior executive for 30+ years. He headed up sales and operations in leadership roles for McCaw Communications, AT&T Wireless, Nextel, Boost Mobile, and Sprint. He has owned an MVNO as well as assisted in the start-up of three others. His consulting company, Atrium Unlimited, LLC advises carriers, MVNOs, investment bankers, and venture capitalists interested in joining the wireless space. Jon would love to hear from you about any consultative needs you may have. Please visit https://AtriumUnlimited.com



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