A mobile device trade-in program isn’t a mysterious operation that should be analyzed with guesswork or even trepidation. Such a program can indeed be scrutinized like any other transactional business process.
Surely, your business has all the angles down when reviewing other types of store sales, expenses, employee performance and other key performance indicators (KPI).
These metrics will undoubtedly determine how operations should proceed.
A mobile device trade-in program should be no different. Just because a trade-in program seems to have more variables than other business functions, its operational metrics can still be tracked and analyzed. In a detailed report, here are 6 KPIs to track and analyze to help management achieve a successful mobile trade-in program:
1. It’s All About the Attach Rate
Of all the KPIs you should consistently measure, the attach rate is by far the most important. An attach rate, as you probably know, is the number of secondary sales powered by each unit of a primary product sold. Shoot for an attach rate from 20 to 45 percent. Succeeding here will define how many trade-in transactions you’re processing based on purchases for new devices and, if you’re a carrier, new cell phone lines.
An attach rate lower than 20 percent will suggest your program isn’t inspiring customers to see the value of separating from their used devices. You can increase the rate, and thus boost the program’s value, by running promotions that stir interest and make customers think twice about keeping old devices in drawers or handing it off to a friend.
2. Quality of Phones
With trained employees asess and record the data and condition of a used device, hopefully in a point-of-sale system, you can easily track the quality of the used products. Either with a big-picture view or finely-tuned perspective of particular models, you can assess quality of phones and determine how to adjust offers, employee assessment protocols and other components.
Obviously, the better condition in which a phone enters your trade-in program, the more money you’ll receive on the secondary market. Phones with low resale value can be hazardous for ROI.
3. Evaluating the Processing Cycle
The longer a used device sits on a warehouse shelf or in a box in the backroom, the more it loses value and ROI diminishes.
Used devices can lose 1% of their value every week, so every wasted day in the back-end process is losing you money. If every step in the trade-in process is computerized, including back-end packaging and shipping, you’ll be able to see how long devices are hanging around. The quicker they’re on the secondary market, you’ll ensure devices keep their value.
4. Measuring Decline Rate
If a customer agrees to turn in a used device but then changes his mind, it’s still a lost opportunity no matter how close you were to getting the phone. This will mostly happen with online transactions, with customers agreeing to eventually mail-in their used devices but then backing away. This could mean your prices are not competitive enough. You could also be unable to hook these customers because they think giving the phone to someone else is valuable. Measuring your decline rate should provide proper insight on pricing and let you adjust accordingly.
5. Viewing Adjustment Rates
It’s obviously crucial for employees to properly identify the type, condition and other important elements of the used devices that are being purchased from customers. You want employees to be accurate but also efficient so that customers don’t walk away because of impatience. It is critical that you keep adjustment rate at 5% or less. Again, knowing this measurement is key to employee training and operational success.
6. Reports Make a Difference
Making heads or tails of this data can be tricky; not all of it useful. Executives, particularly, will want to see precise numbers and may ask for both a day-to-day perspective and a long-term view. PowerPoint slides for the executive team, for example, should be brief, concise and uncluttered.
Where can you get such reports? Look no further than the HYLA Analytics platform. Because we power tens of millions mobile device transactions a year, our platform provides a comprehensive collection of data-driven business insights. We make sure you have what you need to tweak to run an efficient and profitable trade-in business.
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