Trading in the old ways for opportunity with automation technology
What happens when consumers are done with their old phones? They tend to stuff them in an old drawer for emergency uses or toss them in the trash. In a few exceptional cases, some people will dispose of their phones in an environmentally friendly way. But the best way to get value out of their old mobile devices, short of selling it privately, is via trade-ins. And telecoms know this.
The trade-in market value of trade-ins is $2.3 billion in the U.S. alone. IDC forecasts that by 2023, the market will host over 332 million units, worth $67 billion in total. Each year, mobile device users flock to their providers inquiring about what the value is for their devices, receiving a store credit or some sort of compensation. Typically, telecom providers tend to offer the least for a trade-in of any company, but operating under those conditions has consequences for customer retention and satisfaction. So how does the process typically work?
When customers come into a retail store of a provider, they're obviously looking for the best value for their item and providers want to retain them rather than finding their customers going to competitors or mom and pop shops looking for a better catch. In the process of evaluation, a representative asks the basics: Does it power up? Is the screen cracked? Is there water damage? How does the body look? After initial assessment at the hands of the provider representative, should the customer accept, a partner risk management company comes into the picture to handle the device from that point and the customer gets a store credit.
While it may appear like the existing paradigm for trade-ins has worked relatively well, there are still flaws. Telecom providers know that 7 to 12 percent of the devices submitted will run as a loss due to a variety of reasons, usually attributable to human error in evaluation. There are incidents, for example, where a representative misassessed a device as being an iPhone 6 when in fact it was an iPhone 5. Talk about an easily avoidable mistake.
Beyond the technicalities of the assessment process, there are two broader opportunities that are missed.
First, customers might reconsider a provider's offer and go elsewhere, leading to higher customer churn rate. If a customer can go to the typical mom and pop shop and get more money or value for their device, they will, lowering customer satisfaction. Worse, if a competing provider can give a sweeter deal on the trade-in, they may go to a competitor.
Second, in the trade-in process, telecoms lose out on the chance to earn millions on the market themselves as their partner companies do. Considering the sheer size of the trade-in market, providers are facing the prospect of losing millions of dollars by handing off the devices to risk management companies to handle. Why let other companies have it?
All these problems boil down to the absence of automation and grading. Without a universal, standardized device grading system, telecom providers will continue to face situations of trade-in write-offs and leave trade-in value on the table to offer customers. Without automation, they lose the capacity to properly evaluate devices and profit from a billion-dollar industry. The solution starts with mce systems's game-changing, omnichannel trade-in solution.
As a pioneer in automation technology, mce systems provides a streamlined way to easily assess device value digitally and grade it accordingly with a groundbreaking grading system that allows providers to effectively classify device quality and participate in the trade-in market. The grading system and automation empowers telecom providers to retain ownership of the buyer-seller sides; create retention opportunities and activations; and reduce trade-in value variances to improve customer transparency and consistency.