With consumers trading-in their mobile devices more frequently when they purchase new ones, wireless carriers, retailers and OEMs have taken notice and started to include the sale of pre-owned devices in their promotional efforts.
For customers to qualify for some of the best deals for new devices, they must know how to trade-in their old devices.
This exchange of product helps carriers, retailers and OEMs to offset the cost of the promotions and customer acquisitions. As they continue to include mobile device trade-in with promotions, it’s imperative to understand the different factors that can affect their sales in this extremely competitive market.
While it’s tempting to promote the sale of pre-owned mobile phones at any time that is convenient for a business, it’s far more beneficial to first know price trends before embarking on a marketing campaign. And the best way to gain that sort of insight is to collect and analyze data.
Track Every Single Mobile Trade-In Transaction
Using trade-in device analytics, mobile device trade-in service providers can track and analyze the details of every trade-in transaction they make and therefore benefit from a quantitative model that breaks down price trends and attach rates.
That type of data will give a trade-in service provider a clear understanding of when they should discount and promote pre-owned devices and what prices they should offer.
If you’re a trade-in service provider is willing to make the most of your data, the first step is to simply track everything. Track details on every pre-owned mobile phone transaction: the brand, type, color, etc. Also keep tabs on the big picture: Know your attach rates, how much customers paid for their mobile phone, and the condition of each mobile device.
Pieced together, all of this data will reveal a true snapshot of trends, the effectiveness of sales, the efficiency of your sales team, and much more. But knowing what you’re doing is only half the picture; the other half, knowing what the market – your competition is doing, is much harder to capture. Never fear –HYLA can help with this snapshot, but more on that later.
How Well Do You Know the Mobile Device Market?
Understanding the pre-owned mobile device market is not easy. It’s a vast and diverse landscape. Bricks-and-mortar retailers, online retailers, cell phone carriers and OEMs all sell devices. That’s a lot of websites to track on a daily basis.
- Competitive Rates - having complete awareness of the new and pre-owned devices that everyone is selling, and understanding what’s selling well and what’s not. Keep in mind, you’ll need to specifically compare prices device by device. Any other approach will skew the comparison.
- Similarities and Differences - Understand how you and your competitors are analyzing the same mobile devices and the questions you ask customers when they sell you their pre-owned mobile phones. What condition is the touchscreen in? Does the device properly turn off and on? If competitors assess pre-owned mobile phones differently than you do, your understanding of value may be vastly different to the market’s understanding.
- Types of Payments: Tracking cash, debit and credit transactions for pre-owned mobile devices is easy enough—but these aren't the only methods of payment. To stay on top of the true value of used device sales, you have to understand have many devices are purchased with gift cards or store credits.
- Where Trade-in Credit is Spent: When you fulfill a trade-in, you have to keep track of where the buyback credit is spent. Many customers will choose to take the trade-in value and apply it toward a new device. However, you can improve your bottom line by convincing customers to use trade-in credits on high-margin items such as accessories (phone cases, Bluetooth speakers, screen protectors, etc.).
Economic Factors of the Pre-Owned Mobile Device Economy
Don’t forget your market extends beyond the US. It’s important to know about global pricing and the larger supply chain.
In fact, there are many macroeconomic and microeconomic factors to consider when looking at the international market:
- If the purchase is done in the US, but sold overseas - What's the selling price?
- Which devices, and how many are sold as wholesale? How many are sold as pre-owned or certified pre-owned?
- What are the foreign exchange rates?
- What are the consumer confidence indices in countries?
- How many devices are reused for insurance purposes?
The macro and micro of the pre-owned device economy will affect your pricing and thus your sales and marketing promotions.
When is the Right Time to Run a Promotion?
All of this data will allow you to know when and how you should promote the sale of a device. Timing and market demand mean everything.
For example, knowing the first-time ownership sales figures of a smartphone and the expected release data of its successor will help you determine whether to run a big marketing blitz for a pre-owned phone or simply let it sell without fanfare.
More importantly, the data will help you determine the price of a device. A wireless carrier is looking to reap bigger gains with new service contracts and can afford to pay more than market value.
For example, if a carrier is running a promotion to attract new customers or to incentivize current customers to upgrade their old devices, they are more likely to pay more for these pre-owned devices than mobile trade-in service providers - who operates strictly online.
Consequently, it is important to know your program before deciding on price. If you’re a small program it may not be wise or feasible to directly match the carriers’ price.
All of this data will remove the guesswork from pricing and marketing promotions. You’ll have the insight to target your efforts accordingly and boost sales and profit. But, as I mentioned before, it’s not easy keeping track of the competition and global market, let alone every specific of your own operations.
How HYLA Mobile Can Help
HYLA provides wireless carriers and retailers with everything they need to manage their mobile device trade-in programs. Our end-to-end solution manages the device trade-in process, evaluation of device condition and pricing, customer eligibility, device logistics, warehousing, processing and repair, inventory management, and device re-sale.
To learn more about how to boost your customer's mobile trade-in experience and expand your customer base, download our white paper here.
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