While we don’t know exactly when and how quickly the fifth generation of smartphone technology, or 5G, may spread beyond a handful of large cities, there’s no debate about this: 5G is coming. All four major U.S. mobile operators now offer 5G service in select locations, and, as the infrastructure evolves, those services are set to expand. What’s more, mobile industry experts expect that once the 5G floodgates open, consumers will be highly motivated to trade in their 4G devices for ones able to take advantage of 5G networks and services.
Although it may seem we are in the early days, the device trade-in deluge will gain significant momentum over the next several of years. Japan, for example, is planning on being 5G-ready in time for the 2020 Olympics. Moreover, the number of new devices will be significant. According to Canalys, 5G-enabled handsets will reach nearly 800 million units in 2023.
Despite these impressive numbers, the network upgrade now underway does not automatically re-categorize 4G devices as obsolete. The fact is that secondhand 4G devices are exactly what some customers will want, especially given that 5G won’t be accessible everywhere right away and that the price point on these older devices make them much more affordable.
Focus on the customer experience
While we can expect to see an influx of mobile trade-ins as customers rush to get their hands on the latest devices, how can operators best manage the flow of secondhand devices and retain subscribers as we migrate to the new mobile frontier? The answer lies in providing excellent customer experiences in the following ways:
1. Deliver a good trade-in experience. Mobile subscribers today are technologically savvy as well as cost conscious. One misstep during the trade-in process has the potential to drive them to a competing network. Therefore, operators must find ways to initiate and simplify the trade-in process.
One of the best ways for mobile operators to smooth the transition to new devices is to ensure that infrastructure that manages the intake of used devices, especially for processing elsewhere, is as efficient as possible. Efficiency is fueled by automation, which is accomplished by eliminating both unnecessary manual steps and customized workflow processes. Automating the trade-in process also has the potential to reduce human error and allow for more consistent device testing. This benefits not only the customer but also the operator who can expect to see reductions in the cost of employee training.
Another key to a good trade-in experience is ensuring that customers know the true value of their devices at the time of trade in. Because not all secondhand devices are equal, the time has come for the mobile industry to establish a standard grading system for used devices. Consistent device grading builds consumer trust, a fundamental factor both in promoting the sale of device upgrades and in encouraging device trade-ins. Fortunately, the press for grading standards is gaining momentum. The CTIA has already announced an industry-wide standard for evaluating pre-owned wireless devices and recently went a step further to offer a CTIA-Authorized Service Center Program certification to wireless service centers. Amazon also has its Renewed program, which mandates sellers comply with standards it has set. Elsewhere, Japan’s mobile phone sales industry body has plans to launch its own grading system to help boost the number of used devices in Japan’s secondary device market.
2. Inspire confidence in data protection. For the mobile operator, positioning one’s self as a true steward of a customer’s data can serve as the foundation of a successful buyback initiative. Customers who understand that the massive amount of personal data contained on their traded in mobile devices will be truly inaccessible by a new owner will gain confidence and trust in the process and the operator.
Central to operator success, especially as consumers’ privacy concerns accelerate, is putting in place proactive actions that will gain a device seller’s trust. This begins by educating subscribers about the amount and types of data contained within their devices as well as the fact that a simple factory reset is an inadequate solution. Doing so positions operators to explain exactly what they do to ensure that any lingering personal data is completely eliminated. This must go beyond simply resetting the phone to its original settings. To be truly successful in putting a consumer’s fears to rest, the operator should also offer a certification of data sanitization to the seller.
3. Encourage trade-ins. If operators want to take advantage of the secondary market, they must encourage a healthy device upgrade cycle. This is not so easy, considering that consumers are keeping their current devices longer. Recently, RCR Wireless reported that the two-year upgrade cycle is “dead” and, according to a survey by MVNO Ting Mobile, 55 percent of consumer respondents said they expected to keep their current phone for three to five years before upgrading again. A full eight percent said they plan to keep their devices past the five-year mark.
The fact is that operators must do a better job of promoting their buy-back programs. According to a recent survey commissioned by Blancco, 35 percent of consumer respondents in the United States had never been offered the option to trade-in their devices. This was the lowest percentage of any of the countries surveyed.
Obviously, if nobody is asked if he or she is interested and told of the advantages of a trade-in program, chances are that old device will be used until dies or it is relegated to the back of a kitchen junk drawer. Devices that become obsolete before they are re-purposed for the secondary market do no good for either the consumer or the operator.
Mobile operators also should keep in mind that these programs keep subscribers happy because they are given an opportunity to get a new device at a lower cost. Subscriber loyalty should not be underestimated when considering the benefits of a buy-back strategy.
Synergy for all
For mobile subscribers, a top-notch used device trade-in program means they are able to get a new phone at a lower cost. An added bonus is the satisfaction that comes from knowing that their old devices are not adding to the tons of electronic waste going to landfills across the country. For mobile operators, participating in the secondary device market is simply a smart strategic move. As interest in 5G grows, a strong device buy-back program that provides customers with peace of mind that their personal data is completely protected means those operators get their hands on used devices that are not yet obsolete and, therefore, are able to provide significant value in the increasingly hot secondhand device market. It’s a win-win, no matter how you look at it.