The carriers are increasingly taking their cues from Apple's stores as they look to evolve more into a resource for consumers instead of simply a place to buy cell phones.
Last week, AT&T opened up a model store near Chicago with a Genius Bar-like services center. Over the past few months, Verizon Wireless has been rolling out workshops--similar to the classes offered at Apple stores--to help with different smartphones, tablets, and services across its nationwide chain of stores. T-Mobile similarly has been holding "smart clinics" in its stores.
The move towards improved customer care and advice after the sale underscores a growing need to educate the next wave of customers hit with the smartphone bug--folks who aren't necessarily the most technically savvy. The carriers aren't doing it for the sake of good will; they're looking to build customer loyalty, lower the turnover and product return rate, push additional accessories, and stand out in a sea of retail options.
"They're trying to create this loyalty-for-life concept," said Maribel Lopez, an analyst at Lopez Research. "They want you to come back to their store."
That's an important concept because smartphones represent a hot-ticket item this holiday, which means a lot of newbies with a lot of questions.
Sprint Nextel actually pushed this kind of service into the mainstream with its "Ready Now" program, which launched more than three years ago as part of CEO Dan Hesse's bid to revive the company's besmirched reputation.
Since then, it has become standard practice to spend significant time with a customer both before and after their smartphone purchase, activating the device, transferring their address book contacts and images, and making sure they know how to use their phone. It's not just the carriers, either, with retailers such as Best Buy getting into the service game. Coincidentally, both AT&T and Best Buy have similar programs called "Walk Out Working."
These services are more important than ever now as the market evolves past early adopters and tech enthusiasts. The fastest growing segment of smartphone buyers is the over-50 group, according to Roger Entner, an analyst at Recon Analytics.
"The minute my mom says LTE, you know it's become mainstream," said Scott Anderson, head of merchandizing for Best Buy Mobile, of his mother's recent inquiry into whether she needed a 4G smartphone.
Back to school
Sobeida Cortorreal clutched her recently purchased iPhone 4S and listened intently as Verizon representative Allegra Levy slowly went through the ins and outs of the device. A first-time smartphone user who upgraded from a basic LG handset, she delighted in the revelation that she could exit out of applications such as e-mail without erasing the messages or specific content. As a result of her concerns, she had dozens of apps open on her phone, which she gleefully began closing during the class.
Cortorreal, who works for the New York State Society of CPAs and lives in Manhattan, was one of a dozen people who attended a workshop held on the lower level of Verizon's Bryant Park store last week. The class lasted nearly two hours and focused on entirely on the iPhone 4S.
"This class wasn't what I expected," Cortorreal said. "They took the time to take me through every little piece."
For the past few years, select Verizon stores sporadically held classes for specific smartphones or operating systems. But in March, the company made it a national program, and has been in the process of expanding the availability of the workshops, which range from iPhone 4S use, as well as class on Android, BlackBerry and specific products such as the Samsung Electronics Galaxy Tab 10.1. They're also not just for first-time users; the classes include an option for advanced usage as well.
Customers can go on Verizon's Web site to schedule times and location, or get information on when to walk in. There's also a library of tutorials online that customers can access.
The Bryant Park store manager, Alfredo Bethune, is looking to expand the number of workshops available from eight this month to one each day in January.
"It's working out very well," Bethune said, noting the classes have helped spur accessory sales and reduced the rate of product returns.
T-Mobile likewise hosts a number "smart clinics" throughout the year, although they are more geared towards new customers. The classes are likewise separated by operating system, although some clinics are set up for the launch of specific products.
Customers can find out about these stores by going to their local T-Mobile stores. People are often invited to take part in these clinics after they purchase a phone. Like the Verizon workshops, the 30- to 60-minute classes are held at T-Mobile stores, allowing anyone to participate.
"Tech-savvy people may feel comfortable with the Internet, but first-time users may be more comfortable interacting with a real person," said Ami Silverman, senior vice president of sales for T-Mobile.
What a concept
AT&T last week opened up a concept store in Arlington Heights, Ill., near Chicago which included a Genius Bar-like "solutions center."
Similar to the Genius Bar, the solutions center is a place for existing customers to come in and ask questions about their devices, a stark contrast from the typical carrier store's ultimate goal of selling a product or service. Customers can make an appointment or walk in to get help. The aesthetics are even similar with bar stools for customers to sit on.
"We think this solution center is another way of differentiating ourselves," said Paul Roth, president of retail sales and service for AT&T. "It's a design concept we're fairly certain will be a real winner for us."
Roth isn't bothered by the thought that AT&T is treading in a path blazed by Apple.
"Any time someone would want to compare our store to Apple's is flattering," he said.
The store also includes a giant wall comprised of four 44-inch touch-screen monitors, allowing customers to browse a catalog of apps and services. If successful, the app wall and solutions center will start making their way to other stores over the next two years.
Forging an identity
The push for better customer service provides the carriers an opportunity to establish a reputation not just as a retail outlet, but a trusted adviser. But they aren't the only ones doing so, with third-party retailers starting to make strides. Best Buy, for instance, recently surpassed T-Mobile as the fourth-largest smartphone retailer in the nation, the company said.
Best Buy actually compliments the carriers, acting as another distribution outlet. But unlike the carrier stores, Best Buy acts as a free agent, impartially signing up customers for different service providers. The company has spent the last few years improving the training and classes required to work on the mobile department, better enabling the sales representatives to take a customer through their specific smartphone needs. For example, a rep will enter the address of the customer's home into the phone's GPS navigation system, allowing them to try out the feature right away.
In addition, Best Buy offers a little-known follow-up service called Happy 24 (representing the 24 months in your contract). It's an opt-in program that sends customers monthly notices that include an explanation of the first bill, coupons, tips, and reminders about the upgrade.
"It's about keeping the communication with the customer," Anderson said.
All of this is an effort to improve customer service, and just as important, reduce the return rate for smartphones. Carriers take on a bit of gamble when they sell a smartphone--they pay the subsidy so they're operating at a loss until several months into a service contract. In the wireless business, a 1 percent return rate is acceptable, according to Entner. That compares with the acceptable rate of 10 percent for the rest of the consumer world.
"The wireless industry gets a bad rap, but if you look at the return rates, they're spectacularly low," Entner said.
While Sprint doesn't offer the kind of workshops that Verizon or T-Mobile holds, it has a special queue for its customer care line for people who have just bought a smartphone. Customers are routed to a specific group of care specialists.
The improved effort from the carrier comes as other aspects of their services begin to even out. The top three carriers all offer the iPhone, and while Verizon has the lead in its 4G LTE deployment, AT&T and Sprint Nextel are racing to catch up.
"I believe that ultimately, the network and device selection will move to parity, so it comes down to price and service," Roth said. "We've chosen service."
If you're a new to smartphones and want some advice, here are some resources for you:
- Verizon Wireless offers a comprehensive selection of workshops focused on specific topics. You can look up the right class for you here.
- T-Mobile similarly offers "smart clinics" for phones. There aren't any nationally run programs in the fourth quarter, but you can go to your local T-Mobile retailer and ask for the next class. They can also go here to access a portal that provides tips and advice on how to get started.
- If you have a problem with your phone and you're not near a carrier store, analysts say the best source for advice comes from Best Buy. Its sales reps are also more objective than a carrier employee.
- For those comfortable shopping online, Amazon's product comments section can also serve as a mini-resource.