Are you being served?

E-MAIL, WEB ACCESS, video services, music downloads, GPS. … Sales of high-end wireless devices are going up, and more consumers are coming face-to-face with the dizzying array of features that may have attracted them to the devices in the first place through advertising or word-of-mouth.

The increasing popularity of smartphones and robust feature phones may be putting more pressure on wireless retailers — both carriers that operate their own stores and wireless resellers — to ramp up their customer service by helping walk potential buyers through the complex devices out on the sales floor.

The benefits of improving customer service for sales of smartphones and the like are two-fold: Retailers can sell a customer a high-end device (and phone plan), and those customers can then spread the good word about the functionality of their devices — and the helpfulness of the retailer — leading to an all-important referral.

“We think that [customer service is] a crucial aspect of being able to stand out and differentiate in a very complex and crowded retail environment,” said Gregg Kuperstein, vice president of marketing for Wireless Toyz, a wireless reseller.

Wireless Toyz, which began in 1995 as a seller of pagers, now operates more than 150 locations in 24 states as a retail-driven franchise company. It currently offers high-end devices including the BlackBerry, BlackJack, Pearl, Sidekick and Treo. Kuperstein said sales of these devices are up in the company's stores.

That's true of the market in general. According to Seamus McAteer, senior analyst for M:Metrics, smartphone sales are at about 500,000 per month right now in the U.S. — up from this time last year. Four percent to 5% of current device sales are smartphones, which has trended up from a couple of percent a year ago. In March 2007, more than 7.1 million people were using a smartphone as their primary phone, McAteer said.

He believes that the complexity of high-end devices presents a special challenge for retailers.

“Here we're talking about differences in the way services are accessed and supported,” McAteer said. “And there's a service component associated with these devices, so it is a more involved sales process.”

VOICE SERVICE has long been the bread and butter of wireless retailers, said Andy Castonguay, director of consumer research for Yankee Group. The current market model doesn't favor sales associates spending a lot of time explaining device features, he said. Retailers want to keep getting folks in the door for voice activation.

But Castonguay has noticed that some retailers — such as Best Buy and Carphone Warehouse in their partnership to open stand-alone mobile phone stores in the U.S. — are focusing much more on the educational and training component at the point of retail in the hope of gaining an edge.

“As the market moves toward greater saturation, what you have is operators trying to focus more on really driving margins as opposed to just top-line growth,” he said. “What that means is that, at the point of retail, they really need to focus more on trying to get people to take advantage of the potential that these higher-end smartphones really provide from a messaging and communications standpoint, but also from a multimedia standpoint.”

So how can wireless retailers improve customer service? Kuperstein said Wireless Toyz stresses hands-on experience in its stores.

“If they have a chance to fiddle around or play with it or see in a real-world application how others are using it, I think really is probably the biggest driver to ‘Wow, you know these aren't novelty items,’” he said.

Kuperstein also believes communication is important to “being a brilliant listener and an excellent poser of open-ended questions and to really just help identify and understand really what the consumer is looking for,” he said. “How they're going to use the device. Where they're going to use the service.”

Getting customers to use high-end devices in the stores leads to more penetration and word-of-mouth buzz among family members, friends and co-workers of customers, Kuperstein said. According to the company, 32% of all new customer visits in summer 2006 were direct referrals.

Wireless resellers like Wireless Toyz, which sell a number of different devices and service plans, may also feel pressure from carriers to make sure their high-end devices and plans are explained properly in-store.

“I think that it becomes increasingly challenging from an operator perspective to make sure that the functionality of the device is explained,” M:Metrics' McAteer said. “That the reseller does another good job of selling in the service bundles that are supported by these devices.”

Kuperstein said that he feels Wireless Toyz works as a partner with carriers. In addition to online and hands-on training sessions, the company brings in handset manufacturer and carrier representatives to help bring sales staff up to speed on new services and technologies.

But ultimately, said Yankee Group's Castonguay, no amount of training can make up for proper compensation. Retailers need to make sure compensation structures are right so it is worth it for a sales rep to take the extra time to explain smartphone features to a potential customer, he said.

AS THE SALES of high-end wireless devices follow their upward course, retailers continue to be faced with how taking that extra time in the store might give them an edge over the competition. The devices themselves remain a daunting, but exciting, sales challenge.

“[We] just try to make sure that at the end of the day, they're walking out with not only a solid product and service for their needs,” Kuperstein said, “but also as important, some excitement for this new gadgetry that they got themselves into.“

SMARTPHONE USERS (data through March 2007)
Male	4,939,109
Female	2,178,515
TOTAL	7,117,624
AGES
13-34	3,019,971
35-64	3,796,093
65+	301,559
LENGTH OF OWNERSHIP (current handset)
Current month	200,920
Previous month	546,903
Less than one year prior to previous month	3,505,136
One to three years prior to previous month	2,218,039
Over three years prior to previous month	646,626
Source: M:Metrics