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Narrowing the Gap Between Carriers and Retailers

A look at one wireless carrier's strategy to migrate its agents to retail.
by Edmond H. Legum

I called John Dynes, Indirect Distribution Manager of Nextel's Atlanta Region to find out what they may be doing to stimulate new sales through their agent channel. His answers to my questions may surprise you.

Legum: What's the burning issue facing indirect distribution within the wireless industry today?

Dynes: For a carrier, it's different for different markets. But, in general subscriber revenues are going down. At the same time commissions are being reduced. With exclusivity going by the wayside, carriers are going to have to go to their own retail locations to maintain their sales. These issues pose an interesting question for the carriers' indirect distribution managers to think about. Can mass merchandisers move away from free phones, and begin to sell more sophisticated solutions?

Legum: What's your plan to make sure Nextel's agents prosper in the face of these conditions?

Dynes: We plan to give our agents everything we can to improve their chances for success. This includes four things: (1) Good business plans, (2) Training, (3) Promotions, and (4) Communication. And we are now offering our traditional business-to-business agents an opportunity to develop new retail operations. We plan to give them the tools they need to make this transition.

Legum: When I think of Nextel, I think of business phones for business users. Why are you encouraging your outside agents to get into retail?

Dynes: Like computers in the 70s and business phones and faxes of the 80s, any product with mass appeal will eventually evolve into a retail item. The bigger picture we see is this: our products are oriented to business users and any segment of the population that may want the ability to instantly connect with anybody. This may include not only business associates but friends and family as well.

Legum: But your agents may not have any experience in retailing. What are you doing to help them?

Dynes: We've gone outside the company to obtain specific retail expertise. We've developed retail in a can Ð a packaged program that helps our agents with everything from store process documentation to P&L management to job descriptions to visual merchandising of their stores. We've given them consistent design concepts for the buildout of their stores.

Legum: Atlanta leads the nation with the highest penetration of wireless phones per capita in the country. Competition is fierce with major players all positioning themselves to see who can take the biggest bite out of the market. What is Nextel's strategy to help your agents compete with this?

Dynes: We see our product's Direct Connect feature as a big differentiator. For frequent users it can cut their costs by as much as two-thirds compared to cellular. But the sale isn't a default to a free phone, and requires a more consultative approach. By helping our traditional agents get into retailing, they can set themselves apart from the competition, who may not be willing or able to offer solution based selling through a retail environment.

Legum: So, what's the payoff for Nextel? Dynes: Our plan is to develop 65% of sales through indirect distribution. We can pentrate new markets by combining the best aspects of retail distribution with a turned on base of entrepreneurial agents. Our job is to give them the tools they need to make it happen.

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