You could say I’ve travelled quite a lot. 74 countries (and counting), thousands of flights and hotels, and lots of amazing memories. I’m very lucky.
Like most people, I take quite a lot of photos when I am out and about. Some are for work, to illustrate points I need to make when feeding back to clients, and some are your usual tourist things – landmarks, oceans, lakes, mountains, statues – I’ve got them all!
Some, but very few, end up being quite special for different reasons. Here’s a classic I recently reconnected with that got me thinking about the indirect channel for telco in the 2020’s.
The year was 2010, so some time ago. The city was Baku - the country? Azerbaijan. A fascinating place that is a real melting pot of influences from the crossroads of Europe and Asia. It is as much Turkey with a sprinkling of Arabic as it is a former part of the old Russian Federation. I loved it.
This simple picture shows a lot.
One - the growing mono brand classic retail channel in the background, with the lovely sparkling new signs of the Bakcell and the Azercell stores.
Two - the obvious economic disparity, with the half sawn oil drum acting as an indirect sales desk and the old Lada parked in the street.
This in some ways is my point – in 2010, the indirect channel was burgeoning and busy. Otherwise, the ‘smoking man’ would not be sitting there all day - he was making his living. There was a need for quick and easy access to manual vouchers to replenish minutes and texts and fledgling 3G data.
This, like many others, was a two-tier market; you could purchase a subsidised $1,000 smartphone in a swanky retail store, or you could visit the man at the oil drum on the corner of Azadliq Avenue and get your recharge cards twice a week.
During this time, indirect stores often served the growth pattern of many markets. They were the “mobile phone superstore”, unorganized, piled high with the latest devices, accessories as far as the eye could see, often acting as repair centres.
These channels were the beating heart of many a telco’s channel strategy, and while they certainly did not drive the upper echelon of high ARPU super-users, they certainly drove mass market volumes for the telco, which was impossible to ignore on the balance sheet!
Fast forward to 2022. We are into the third year of a global pandemic that has changed everything. The rich are still rich, and there is still a mass market and a transient worker population in many countries that needs quick, easy, and constant access to telco services in order to go about their business.
In the decade that has passed since ‘smoking man’ on the corner, we have seen the following:
What does this mean for the indirect channel? Is the ‘smoking man’ in my photo still on the corner in Baku?
Given that market, most likely he’s gone - moved on to a new product and revenue stream. For indirect sales, demographics matter. Today, the ‘easy access’ and ‘personal service’ of a very urbanised channel of indirect re-sellers is all but gone in a lot of markets.
The US, Canada, the UK, and some of Europe no longer require as many independents as before. People are keeping their devices longer, they are not churning as often from provider to provider, and their telco is able to give them the services they need via apps/repair centres/logistics services. In these markets, there is no longer a need for the independent.
However, it’s the complete opposite in more emerging markets - especially those with highly transient populations and a big foreign worker population. In countries like Egypt, Nigeria, Indonesia, India, Kenya, and parts of South-East Asia and Central America – countries with vast, young, growing populations – the indirect channel is very much alive and kicking (although it is being disrupted by technology, as you can imagine).
The speed at which people live their lives, coupled with the need to stay connected, means that telco services in a lot of countries still compete with food, cigarettes, and soft drinks as the “day spend” of a typical consumer.
Here, working people don’t have time to visit a retail store for a long transaction. They need quick access to a device that suits them, at the right price, and with a set of telco services that allow them to make international calls and send money transfers (sending wages back home). They are also more likely to require repair services and can’t afford to have their phone sent away. So, they shop where they’ve always shopped - where they work, and with people who know what they need.
The corner sellers of yesterday have evolved. They’re more organised and empowered by technology, but they’re still out there with their oil drum stands, making a living.
Some telcos have long given up on this massive channel. They still love the gross additions to their customer base every time a new SIM lights up. And they love the high margin top-ups driving daily and weekly data packages (at inflated prices) to a customer’s phone. But they’ve turned their attention to making their other channels profitable, transforming what they do digitally (which costs $), and in moving into b2b services which are growing exponentially. This has allowed a myriad of MVNOs into the market, hungry for the constant turnover of customers and the guaranteed revenue streams.
That said, some telcos have recognized the incredible opportunity that still exists in the indirect channel. These telcos have digitally transformed and are using connected channel strategies and systems to drive success from an overlooked part of their business.
These telcos are winning.
Armed with the right technology, the new and improved ‘smoking man 2.0’ is thriving in the digital age. He’s now found on the streets of Lagos, Nigeria – and uses his smartphone to sell top-ups and other services out of an old convenience store hut on the corner of Balogun and Martin Streets, just opposite the Sunshine Mall.
One of the three telcos he represents (Telco #1) has just launched an app for resellers, which means he can buy the right number of services and SIMs for that network each day.
He can see how many SIMs, devices, and airtime he’s sold, as well as track his Mobile Money cash-outs and deposits. He now has a true picture of his commissions and rewards from that telco, which drives him to do more the next day. His sub-distributor sees his sales trends through the app, which helps with weekly stock forecasting, so he always has stock on hand. Stock = sales = commissions!
Over time, a trust relationship develops, and the telco can start to offer a credit line to all street vendors, so their sales performance isn’t limited by their personal cashflow.
The other telcos that our seller represents use a manual system. This means he must visit their sub-distributor office every morning at 7am and guess how much product he must buy each day. As you can expect, this is difficult to predict. So, he buys what he can, but if he doesn’t have much cash on hand, he could leave without buying enough stock. He often runs out of recharges for these networks now. And because it’s so much easier for him, he’s started recommending Telco #1’s products to his regulars, and they are slowly switching.
Beyond the corner seller, all types of indirect sales will benefit from a modern commerce solution, including dealer stores, third-party chains, pop-ups, vehicular retail, and door-to-door sales. All your sellers will appreciate how easy a modern solution makes it to process sales – and in turn, make more money for you. It’s a win-win.
For telcos, the path is clear. Provide your indirect sellers with the right digital tools, and you’ll give them an incredible experience that builds loyalty, while increasing your own visibility and control over the channel. Yes, those oil barrel sellers have a place in your digital transformation. It’s time to make them the heart of your channel strategy once again.
If you want to learn more about how to get the most out of every indirect channel, check out our whitepaper, “Controlling The Chaos: How To Overcome Indirect Channel Pitfalls And Win”. Or as always, you can connect with me on LinkedIn.
Will Gibson is Maplewave’s VP of Sales and Marketing. He is an award-winning consultant with over 25 years of retail and telecom experience in over 60 countries. Will intimately understands current trends and pressures and how to execute a modern telecom experience. Will brings a willingness to help to everyone understand what Maplewave can do to improve their customer experience - anywhere, at anytime.