Marketing Week (MW): What are the ideas behind the new campaign and how does it make you more customer focused?
Julian Diment (JD): There is no point me going off from a marketing perspective and creating a lovely customer-facing campaign that says, ‘we understand your needs and we’ll find you the right [mobile phone] tariff’, if that wasn’t genuinely true in the customer experience.
We embarked on the biggest-ever customer and colleague piece of research and looked at our customers, their needs, how those had evolved in the recent past and questioned ourselves about whether we were delivering the best possible service.
This is still a very complicated market where you have an unlimited combination of handsets, tariffs and networks, and there are over 8 million tariffs in the market, four or five operating systems and new phone launches every three months. We found that customers still value and need advice to help them decide on what’s right for them.
MW: What do you hope the campaign will achieve for the business?
JD: The Pinpoint experience (see box below) is a tablet-based experience for customers in-store. It explains what we do, how we do it and goes through five questions that help find the right phone for the customer. It is transforming mobile phone retailing. We were the guys that ultimately invented mobile phone retailing and this is a complete transformation using the power of our colleagues along with the power of technology to make sure we are genuinely making the right recommendation based on the customer as an individual, rather than just saying, ‘here are some deals’.
MW: What targets are there for the campaign?
JD: There is a defined set of key performance indicators. We have customer, finance, commercial and people metrics, right down to how engaged our people are in the programme, how engaged store colleagues are in using Pinpoint and how many customer transactions are processed through it. These are a very detailed, structured set of KPIs which the business is committed to delivering, not just marketing. There are a set of nine across the business.
Customers still value and need advice to help them decide on what’s right for them
MW: How has the advent of 4G increased the need to be more customer focused?
JD: The average 4G customer uses twice as much data as the 3G customer. Our role is to help people understand that and the dangers of being on the wrong tariff. 4G is completely integrated that into the Pinpoint experience, helping customers understand what it is and its benefits.
MW: Carphone Warehouse has experienced a strong start to the year with lik-for-like sales up 10.6 per cent for the quarter ending June 29 and total connections up 6 per cent. Will the competition around offering 4G see this growth drop?
JD: The mobile phone retail market is a highly-competitive and challenging market in terms of retaining and growing that market share. That’s why we invested so heavily, even in difficult times, to make sure we stay ahead of the competition, that we have the best colleagues in terms of their training and the best tools that reassure the customer that we are the best place to come rather than somewhere else.
We are committed to continued growth and success and we’re confident these tools will help deliver that, but we can’t be complacent as it is an incredibly competitive market and we have still got a lot of work to do.
MW: The French market is not seeing the same sales as the UK. Will this campaign be rolled out in France to address this?
JD: We work very closely with all our other markets. We are looking to exit the French market in the immediate future, so there isn’t a long-term retail business for us in France. In our other European markets we often use the UK as a test bed and if successful we can roll that out pretty quickly, but it’s UK focused initially.
MW: Kate Moss designed a collection of phone accessories that launched in July. How well is the partnership going?
JD: So far, sales are good and it has been well received by both customers and the media as quite innovative and different. It’s one of the first times that we have seen a collaboration of that style in our market. It came about from an opportunity that we saw and what we call fashion tech. This is more targeted towards women, but not exclusively – I have a Kate Moss case on my iPhone – but the point was that you have a phone for two years and accessories is an opportunity to update your phone to reflect your personal style.
MW: Is there a danger that such a collaboration could be seen as a gimmick?
JD: Is there a danger that these partnerships are seen as a cynical way to target a new audience? Potentially, but we wouldn’t have done it with just anyone. Kate is genuinely engaged in the partnership. She was at every single design session and lead the design process, so the authenticity and integrity with which we made it happen gave me confidence that it wouldn’t be seen like that.
Accessories is an important part of our business and remains so. We will continue to work with Kate and we are on season two of the range at the moment, but there may also be other partnerships and ways of looking differently at the accessories department. Watch this space.
MW: Carphone Warehouse worked with agency Bow & Arrow on the Kate collection but works with CHI for advertising. Will you be working with smaller agencies on projects?
JD: We use a number of agencies. CHI & Partners we have worked with for many years. It has a strong understanding of our business and have lead all the above line development of the new ad. We work with Bow & Arrow more on the innovation projects, such as Pinpoint and the Kate Moss partnership. That’s more on the product development and technical design elements and then we work with CHI to promote those products and services.
It’s good to have the expertise of the bigger agencies, but also sometimes to complement that with the nimbleness of smaller agencies.
MW: With doubts over the future of the high street, do you feel you are in a good position to ensure your stores are getting the same traffic as online and will Pinpoint help with that?
JD: We know customers will start researching two to three months before purchase because they have had a phone for two years and are about to make another big investment. That research journey is important and we have invested significantly. We’ve doubled our online budgets in the past 18 months to ensure we are not only present in that online research journey but also we are creating interesting tools and campaigns that help customers. The online part of the experience is vital.
The good news for us as a high street retailer is that the majority of customers have said they still want to talk to someone and touch and feel a handset before they purchase it.
MW: How has your work background helped in your role?
JD: I’ve been very lucky to work in different industries and different roles. I’ve run my own business in the past, I’ve worked in luxury retailing, on networks and in operations at the Football Association. What that helps me understand is not just the commercial pressure of the business, but the business as a whole. As a marketeer, I believe I am grounded in delivering solutions for the company rather than just marketing solutions for communication.
MW: What do you see as the future of the industry?
JD: I’m very excited about the future for tech retailing. It is a complicated industry and the advent of 4G is a great example of how that will only become more complicated. There is an exciting future for both high street and online retailing.
I genuinely believe that there is not a more dynamic industry that touches people’s lives right now in the excitement that is still generated by new handset launches, new technology and just the fact that more and more people have a smartphone in their hands that is the remote control for their lives.
Each and every customer counts
Following a major piece of research into its existing customers as well as interviews with staff across the UK to gauge what the business is doing right and wrong, Carphone Warehouse is introducing a number of smart tools in-store and online in order to be more customer focused as a business.
The new smart tools will see the retailer give every staff member in-store a tablet to implement a new programme called Pinpoint, which guides customers through choosing networks, tariffs and handsets and involved re-training 3,000 store staff in using the tool.
The tablets go through what Carphone Warehouse does and how, in terms of creating their own tariff that differ from what each network offers individually, as well as asking the customer five key questions that result in a recommendation of handset, tariff and network.
Once those five questions have been answered and a suggestion has been made, the tool includes a ‘future proofing’ element, to see if the phone, network and tariff will still be right for the customer over the two-year contract, which is discovered by answering questions around usage.
The tool also has a live tariff checker, which compares over 12,000 deals from the other networks and competitors and a coverage checker for 4G, which allows the customer to check two different postcodes – for example, work and mobile. Elements of the tool are also live online.
The campaign is being marketed through a £10 million campaign. This includes a TV advert, which kicks off on Friday (20 September) and social media activity, which will emphasise the comparison capabilities and is under the slogan ‘Each and Every Customer Counts’.