By Michael Fisher | July 6, 2012 12:34 PM
“The salesman knows nothing of what he is selling, save that he is charging a great deal too much for it.”
Wednesday being a fairly big holiday in America, I went to an evening barbecue to celebrate. I ran into a friend there, who was carrying an LG Ally. I found this hilarious, because when I’m not careful I can be a bit of a phone snob. Anyway, we got into a conversation about it.
Turns out the Ally isn’t what she originally had in mind when she visited Verizon Wireless on her upgrade day last year. She’d actually been looking for a BlackBerry. So she walked into the store on a mission to secure a new BlackBerry, and walked out with a mediocre Android phone.
Today, with the benefit of hindsight, you could make the argument that the sales staff did her a favor; nine times out of ten, a half-baked Android phone will provide a better smartphone experience than a top-of-the-line BlackBerry. But remember, this was 2011. Those of us who follow the industry were aware that RIM was spinning its wheels, but the average person could still be forgiven for thinking BlackBerry had a future. The point is: she was talked into another device by the sales rep.
I was one of those sales reps once, though that’s not what it said on my nametag. At Nextel, the title on my shirt read “Wireless Consultant.” After Sprint gobbled us up, we got a word-count promotion to “Retail Communication Consultant,” but the job stayed the same. They didn’t like calling us “salespeople.” Anyway, I held the job for four years, won a few sales and customer service contests, and even got a promotion or two, which means I must’ve been doing something right. And I routinely “talked customers into” choosing a different phone than the one they had in mind. Not in a vindictive way, but because it was part of my job.
One of the first steps any salesperson needs to take in a transaction is a process called “qualifying the customer.” During this question-and-answer period, the seller becomes acquainted with the buyer’s needs and wants, laying the groundwork for the seller to offer a (hopefully) helpful and unbiased opinion. In wireless, these questions tend to start general -”Will this be your first smartphone? Will you be using it for work or personal purposes? What kind of home computer do you use?”- and increase in specificity as the process goes on: “Do you like to customize your experience, or would you prefer it be simple out-of-the-box? How fast do you need your data to be? Are you rough on your phones?” Eventually, a picture begins to emerge of the buyer’s ideal device, allowing the salesperson to recommend the product closest to that ideal.
So sometimes, a customer walks in thinking they want one thing, but the question-and-answer period reveals that a different product entirely would suit them better. As I mentioned, this happened all the time when I was on the sales floor; people used to come in thinking their only smartphone choice was a BlackBerry, but a quick Q&A exchange revealed that a Treo would be the best fit for them, or vice-versa. There’s nothing wrong with that; that’s why the qualification process exists.
But that process, and in fact the entire retail phone sales paradigm, depends on the salesperson’s opinion remaining unbiased. Qualifying a customer loses all validity if the salesperson is more motivated to sell one device than he or she is to sell another. That’s where things get complicated.
The Struggle To Stand Out
Carrier retail stores and third-party resellers are essentially showcases for products from many different manufacturers. Even at a carrier store, which only sells products for use on one wireless operator, many OEMs are represented. Samsung, Motorola, Apple, HTC, Kyocera, LG, ZTE, and a smattering of smaller brands are all constantly fighting for shelf space and consumer attention on the sales floor. So these manufacturers have been forced to think creatively about how best to help their products stand out.
Because many smartphones look and even function similarly, this is a tougher challenge than it seems. If you’re an OEM, educating customers on what makes your offering superior can be a daunting task when all you have to work with is a small information card or, in rare instances, a dedicated corner of the store reserved especially for your product. The logical approach, then, is to win over the carrier’s sales staff to do the job for you. Nokia made a huge effort to do this with the Lumia 900; it put a free phone in the hands of many AT&T retail employees. That cost the company an estimated $25 million, but it was a crucial step in paving the way for the device’s adoption; in the United States, manufacturer brands succeed or fail on the backs of the salespeople. And a salesperson who knows nothing about a platform isn’t going to recommend it. Windows Phone was essentially unknown in America before the Lumia push, so Nokia’s move could be seen as an action taken to reduce a bias against Windows Phone, rather than to impart a bias toward it.
But what about when manufacturers start giving salespeople money to favor their phones?
This used to happen fairly regularly when I worked at Nextel, then Sprint. In the case of the former, life was simpler: because of the nature of iDEN equipment, Motorola was our dominant handset vendor. The only non-Motorola devices we sold at retail were special iDEN-enabled BlackBerries. At the time, RIM’s challenge was multifaceted: its offerings made up less than 10% of the retail catalog, and its devices were more expensive and required a pricier monthly plan than the Motorola feature phones.
To overcome these challenges, RIM often worked with Nextel to incentivize the sales staff. Every few months at a sales meeting, we’d be told that for every BlackBerry we sold, we’d get an extra bonus -typically $10- on top of our regular commission. That kind of per-item bonus is generally called a “spiff” in the sales world, and it was pretty common even among accessory makers; when Motorola or Jabra would come out with a new, expensive bluetooth headset, there was often a $5 spiff attached for each sale, to jump-start sales.
That kind of stuff continued after Sprint acquired Nextel, only more so: the previously Motorola-dominated sales floor was suddenly flooded with products from many OEMs, all constantly vying for our attention. Sprint often walked a fine line when announcing the various incentives, making sure we knew about them but also constantly re-emphasizing the importance of properly qualifying the customer.
The Brutally Honest Question Corner demands a brutally honest answer, so: yes. It affected how and what we were selling. But -and this is crucial- most of the time, this change wasn’t to the detriment of the customer. Yeah, yeah – I know; I’m not the most impartial source. But hear me out.
There’s a pair of failsafes built into the fabric of the American wireless sales landscape to prevent the kind of abuse the commission-and-spiff structure could possibly engender. Those protective measures are the return period, and the two-year contract.
So assume it’s 2006 and I’m still a sales guy. Assume further that Palm is offering a $10 spiff on sales of the Treo 700p; that’s perfect, since the Chili’s next to my store has just upped the price of its nachos appetizer to $9.95, and I’m hungry. A customer comes in who’s looking for a durable flip phone with a loud speaker and the simplest interface possible. Despite the customer’s needs standing in direct opposition to the Treo’s feature set, I aggressively push the 700p on him. I overcome all objections and make the sale, earning the spiff.
Here’s the thing: I may have gotten the money, but it takes a lot of effort to keep that money. Depending on the carrier, the customer has between 14 and 30 days to come back to the store and demand a refund or exchange. With corporate stores, he doesn’t even have to come back to the same location to do so. But if he does come back to my store while I’m working, not only do I lose the spiff; I have to spend a lot of time and effort processing the refund or exchange. Then I have to do more work, in the form of sending the used phone back to some faraway warehouse for “refurbishment.”
It’s even worse if the customer hates the phone, but doesn’t exchange it before the return period ends. Now I’ve got a customer carrying a device that’s not right for him, and he’s constantly returning to the store to 1) complain to me about how much he “hates this thing,” 2) complain to my manager about me, and 3) ask me how to work every single function. For the next two years of his contract.
Is this hellish scenario his fault for not returning the phone he hates during the exchange period? No; it’s my fault for selling him the wrong device in the first place. No amount of money -certainly not a $10 spiff- is worth that kind of aggravation, and thankfully most salespeople understand that. So this kind of commission-based abuse isn’t as common as it otherwise might be.
“They Smacked Them Down”
That kind of logic also makes sense to someone I spoke with at Sprint, a management-level retail employee who spoke on condition of anonymity. The blunders he sees on the sales floor aren’t often caused by commission-based motivations, in large part because those kind of incentives have dried up.
“We haven’t seen any influence from a vendor perspective in a couple years,” he said. “They’ve really cut down on the vendor [commissions]. The spiffs are on … items like accessories now – there’s no more ‘sell a BlackBerry and get a dollar’ stuff.”
There are exceptions to that, of course; the BlackBerry PlayBook, lacking a cellular radio, was for a time considered an “accessory” by Sprint’s retail classification system. When its price dropped below $300, a magical threshold in Sprint’s commission structure for accessories, its per-item commission value shot from 3% to 12% – and suddenly Sprint was selling a lot more PlayBooks.
But from what I’ve been told, that situation was an anomaly. In fact, Sprint seems to have taken an aggressive stance against manufacturer favoritism in recent months: “We had a RIM person come and drop off a couple demo BlackBerry devices for the staff to use, and tried to buy [the retail employees] lunch. Well, once the operations manager found out what [RIM] was trying to do in our district, they smacked them down – pulled the phones out of the store and everything.”
Before, it was like: ‘we’ve got this Motorola contest; you could win this Motorola phone.’ They don’t do that anymore. Now I think it’s a little more fair. I think the only bias you’re gonna see is who’s comfortable with what. I had a [retail employee] who had no phone sales experience and she owned an iPhone. So all she was selling was the iPhone.
He took steps to correct the issue:
I put phones in her hand and made her use them. [I said] “you’re gonna sit here … and you’re gonna play with all these phones. By the end of the week you’re gonna need to be able to do this, this and this, all these functions, on all these phones.”
That kind of proactive correction is commendable, and absolutely essential to a healthy carrier retail store atmosphere. Having visited many stores and been aggressively sold a phone the salesperson himself was carrying, the power of familiarity is … familiar. And it’s dangerous.
“If The Retail Staff Doesn’t Like You … You Die”
Perhaps the most visible example of a company critically harmed by an indifferent carrier is Palm. Along with other webOS fans pulling desperately for the platform to succeed, I experienced a jarring demonstration of just how critical carrier support of a platform can be in America. Former Palm developer advocate (and current Nokia employee) Josh Marinacci recalled the situation on an entry in his personal blog describing the death of webOS:
Verizon promised to support the Pre Plus but it turns out that support didn’t extend to the actual employees in the retail store. In the US, at least, a phone lives or dies by the retail staff in the carrier stores. Nothing else matters. Not price. Not features. Not apps. If the retail staff doesn’t like you… you die.
And sadly, that’s exactly what happened to Palm. There were other factors that contributed to its demise, of course, but it’s hard to deny that the near-total dearth of support at the carrier level was one of the big ones. One need only look as far as the ads Verizon whipped up for Palm to see what they thought of the platform:
What, then, of Verizon Wireless? Does America’s largest carrier still allow vendors to incentivize its sales staff? My barbecue friend’s BlackBerry-to-Ally experience would seem to say yes, but I wanted to probe a bit further.
I spoke to a Verizon Wireless sales manager who, like his counterpart at Sprint, spoke on the condition of anonymity. When I asked him whether brand-specific incentives existed at Verizon, his reply was a flat “no.” But he seemed to know why I asked the question, because he quickly followed that up with, “I think people are worried that the iPhone is getting ‘sold against’ in stores – that we’re talking people out of the iPhone. And that is true.”
That wasn’t what I expected to hear. My surprised silence was invitation enough for him to continue.
But … well, it’s not in the form of a spiff per brand, but there are rankings involved for putting people on the 4G network, which the iPhone isn’t a part of. The metric is called “4G percent of smartphone sales” … We get penalized, in a way, for selling an iPhone, because it’s not 4G. But also there’s tons of Android phones that aren’t 4G, so we also get penalized for selling them. And the reason for that is because our 3G network is almost at its limit. So it’s not a spiff, but your compensation plan is built around the idea that if you sell more 4G, you make more money.
All of which makes plenty of sense. Like any other network provider, Verizon has a vested interest in transitioning people to newer, more efficient technology that allows the company to save money and gives the customer a superior experience. The way Verizon sees it, many customers walk in the door thinking they want an iPhone because they haven’t been educated about the alternatives. In fact, if a customer asks for an iPhone, buys one, and leaves, without being shown the 4G alternatives, the person I spoke with considers that a failed interaction. He called it “clerking.”
If a customer walks in the store for something, and you give them exactly that and send them home, you may be a good customer service rep; but you’re in sales. I can get someone from the Dollar Tree– I can get my niece to do that. Your job is to promote what the company needs as well, which is 4G … That’s doing your job. Your job isn’t just to take care of whatever problem they had and let them leave.
This was starting to sound a little harsh, but before I could interject he clarified his stance.
Now, I don’t want [a customer] going home pissed off that they bought this extra stuff they didn’t want; that’s not what I mean. I want them going home happy that they have stuff they didn’t know they wanted. Or at least I want them going home knowing that we offer something they didn’t know about before.
That means, quite often, customers walking in with iPhone thoughts and walking out with Android hardware. Obviously I was aware this was happening, but where my thoughts before ran to commissions and special sales incentives, the reality is, at least partially, network-based.
To Trust Or Not To Trust
I talked to others, too, taking a tour of third-party resellers in my area. None of them would admit to brand-specific commissions or spiffs, aside from occasional incentive programs like Microsoft’s initial Windows Phone push, where the top seller of the HTC Trophy in a given period could win “an Xbox game or something,” according to a Verizon Wireless employee. Aside from the aforementioned Lumia push at AT&T, I couldn’t find evidence either for or against vendor influence at work in the nation’s GSM carrier stores.
Based on Big Red and The Now Network, though, the glory days of OEMs wooing U.S. carrier salespeople with dollars, devices, and anything more elaborate than neck lanyards appear to have passed. That’s a good thing; it means more balance on the seller side of the counter. But as we’ve seen, that doesn’t mean sales floors are completely devoid of bias. Carriers have their own reasons for pushing devices of their choosing on customers.
So for wireless shoppers in America, the upshot is this: Yes, you’re often being sold something other than what you came in for. Yes, sometimes you’re being fleeced (you probably don’t need that $30 phone case). But it’s not always about the sales person chasing an extra buck, and it’s not always a bad thing: from what I’ve been told, return rates for the Verizon iPhone are higher than some other devices the carrier offers. So the advice you get at a store is at least worth giving a fair hearing, even if “you might like this Droid better” sounds preposterous to the ears of many average consumers.
But as in any situation, you’ll easily get duped into buying something you don’t want, or talked out of something that really is the best fit for you, if you haven’t done your research. So if you’re planning on shopping at a retail location, rather than online, make sure you know what you want – or at least have your choices narrowed down, and know what questions you want answered. Ask the sales person what phone he or she carries, and why. Ask them if they’ve ever owned the phone or tablet they’re suggesting to you. Just like when dealing with “ordinary people,” if the answers you get don’t seem to jive with reality, consider asking for a second opinion. Or verify the facts with a quick Google search if something sounds fishy.
Be prepared to make a new friend for a few minutes, though. Of all the things that have changed in the few years I’ve been out of the game, one of the core premises of salesmanship hasn’t.
“I need you to get [customers] to like you,” my Verizon guy tells his sales staff. “Talk to them. Get them to talk about their lives; get them to tell you about their needs … needs that Verizon can meet. And wow them with that.”
So should you trust your phone salesman? Well, as Reagan said, “trust … but verify.” And remember: whatever device your new friend sells you, you’re going to be carrying it for the better part of two years. So you better not leave the store with it unless you’re genuinely “wowed.”
Verizon retail device photo source: Simple Mobile Review
Josh Marinacci on webOS: Josh on Design