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FONE LOGISTICS GOES ON CALM OFFENSIVE
FONE Logistics has introduced a new commercial model to reinstill dealer confidence in the wake of the recent O2 commission shake-up.
With Orange planning to launch a similar revenue-share scheme (April), Fone Logistics has put a strategy in place to help stimulate growth of high value O2 among resellers and channel partners.
O2’s new ongoing commission model, which went live from October 1 2008, means that distributors and dealers will now be paid on monthly share of billed revenue, rather than on connection.
This means payments will be spread over the contract lifetime and will be based on how much the end user spends.
As the UK’s leading mobile airtime distributor, Fone Logistics was concerned that these changes, which will mean fundamental changes to how dealers run their businesses and account for cashflow, and could cause interim funding problems and drive some out of the market.
Fone Logistics has put steps in place to ensure that the new models will still create long term value for dealers by offering exclusive products, such as upfront cash incentives for all elements of customer commitment and extra support with detailed sales reports.
Fone Logistics will also provide dealers with clear marketing guidelines to allow them to sell more effectively to the end customer by, for example, giving extra add-ons each month and providing tools to assist in generating customer opportunities.
The company’s strategy for 2009 is to retain customers and sell all-round solutions, such as wrapping around connections with added features and benefits. And it will encourage dealers to do the same.
Fone Logistics sales and marketing director Julien Parven said: “With the recent industry changes to the O2 model, we have launched a series of products to show dealers how to future-proof themselves, protect them against hostile churn, and improve their cash flow.
“Most dealers are concerned about the impact the new commission structure will have on their cash flow. They will no longer receive the commission payment up front, so some dealers will not be able to find the money to subsidise handsets.
“We are helping the dealers with the transparency in the commission structure by reverting back to a commissionable rate for all elements of the tariff, drawn down as an advance of the revenue share, with further ‘out of bundle’ spend paid to the dealer at intervals throughout the customer life-term.”
Within Fone Logistics’ non-mobile portfolio, they are helping dealers in the converged marketplace by offering new deals for 2009 and have strategies in place to be the leading distributor of wrap-around products from within the ICT marketplace. Further additional services are being sought such as home landline, broadband and cable products.
Julien added: “We have refreshed our O2 model to reflect the network’s increased advance term for acquisition to revert to a tariff-led model in which the revenue share advance is based upon the customer spend commitment with overspend rewarded at the top-up periods.
“We have also added benefit to the O2 Mobile Broadband proposition with an incentive linked to connections for the first quarter.”
To help promote Fone Logistics’ new commercial model it is offering dealers tutorials on the pack and also in how to maximise their return from the O2 revenue share model.
For more information on the events contact Gareth Parry, Business Product Specialist at gareth.parry@fone-logistics.co.uk.
