Found Money: Take a good look at your wireless expenses (part 3 of 3)

(Part 3 of 3)

In the previous two parts of this blog, we described the basics of reducing your wireless expenses as it relates to your cell phone plans and usage. Now, let’s take a look at the equipment costs, accessories and those nasty early termination fees associated with your wireless account. And, let’s see how much it will cost me to save money.

Equipment – phones aren’t always cheap…

When you purchase a new phone and a new line of service from a wireless carrier, you usually receive the equipment at a discount. The carrier will subsidize the cost of the equipment by $150-300 (or more). And, the carriers will not always discount related phones by the same amount. For example, one Blackberry that lists for $549.99 may be discounted to $219.99, or $330 off. Another Blackberry that lists for $499.99 may be had for $79.99, or $420 off. The difference in price may be attributed to one carrier matching another carrier on price, or the more popular phones will be at a lower cost than the non-popular ones (basic supply and demand). The features of one phone over another will also factor into the cost.

When purchasing a new line of service, you don’t always have to ‘allow’ the carrier to subsidize the cost. Carriers subsidize the cost to sell more phones, and thus ensure that you stay an active user for the full two years of your contract. If you break the contract, then you are subject to the dreaded early termination fee (ETF) of up to $200. You can (almost) always purchase the phone at full MSRP, and then you don’t have to sign up for that two-year service agreement (i.e. contract). You are then free to cancel the phone’s contract at any time, without having to pay that ETF. However, if the phone’s discount (off MSRP) is greater than the early termination fee (as shown in the examples above), it is still cheaper to take the larger equipment discount and pay the ETF later (if necessary). Also, many carriers are now prorating the ETF’s, but only for new lines of service that have been activated since the new policy has been implemented.

Many carriers will offer specialized or discounted voice and data rate plans only if you sign up for a two-year agreement, so the above option may not be an option. Carriers are doing all they can to make sure that you stick around for those two years (or longer).

Early termination fees

Since the carrier has subsidized your equipment in exchange for a two-year contract, if you decide to cancel the line of service (break your contract), you could be subject to ETF’s of up to $200 per phone. It is also important to remember that a contract is tied to a phone number, and not a piece of equipment.

There are a few ways to avoid paying ETF’s – and here is one way. Suppose you have two phones – one is not under contract, and the other one is under contract. The phone that is under contract is for a recently terminated employee, and you want to cancel their line of service, but you will incur an ETF. You could simply give this phone to the employee that has the phone that is not under contract, and then cancel their line of service, and avoid any ETF’s. But, then this employee would have to change their cell phone number. Many times, that is too much of a hassle.

Another solution is to see if you can change the rate plan on the phone (that is under contract) to one with a lower monthly cost, and then stick the phone in a drawer until you need another phone. You may also put it on a seasonal (stand-by) plan – but see the previous blog for the caveats on this action. But if you take the amount of the ETF and divide it by the lowest monthly cost for a rate plan that is available, it might be cheaper to just cancel the phone and pay the ETF – especially if you won’t be hiring anyone new for a while. Also, be sure to check with your carrier to make sure that if you change rate plans to a lower one, your current contract won’t be extended.

Insurance – not always such a good idea

Most carriers offer equipment insurance for your new phone within the first 30 days of purchase. For a fee, ranging from $3 to $7, you can have complete replacement coverage for your cell phone – with ‘replacement’ being the key word. Some insurance plans will replace your phone only for out-of-warranty issues, and some plans will offer ‘total protection’ for your phone. If you drop your Blackberry in the bathtub (yes, I did that once), or drop it onto a concrete floor (ditto), they will give you a replacement Blackberry for a nominal fee, depending upon the insurance plan. You either ship your phone to the insurance company or deliver it in person to a local repair center, and then you will receive a ‘reconditioned’ replacement phone. This replacement phone is usually one that has been reconditioned by the manufacturer, or in most cases, ‘repaired’ by the local repair center. You are not getting a new phone, but instead one that may or may not have been fixed after the last person turned theirs in for repair or replacement.

Since a new phone can cost upwards of $500 (especially for PDA-type phones), is it worth it to have insurance? Let’s assume that your company has 500 phones. At an average of $7 per phone per month for total replacement insurance, you will be paying $3,500 per month (plus taxes!) for insurance. If all of the phones in you inventory have an average MSRP of $400, then you would have to break/lose nine phones per month to break even. It is really a judgment call on your part based upon the history that your company has with employees breaking or losing their phones. And, you may also purchase replacement phones from third parties or web sites (such as eBay) at a lower cost than full MSRP.

Standardize on equipment and accessories (cheaper is good enough)

A company should standardize on just a few phone models. The fewer the total number of different models that you have, the cheaper it will be to support those phones and you will also be able to standardize on accessories. There are dozens of different chargers (both car and home/office) for the dozens of different phone manufacturers. If you can standardize on the type of charging plug needed for all of your phones, then your accessory costs will be minimized as one charger will work for several different phone models. The two main standards today are mini-USB and the newer micro-USB chargers.

When possible, try to purchase non-OEM (original equipment manufacturer) accessories, and never buy accessories directly from the carrier. You can save 50-75% (or more) by purchasing non-OEM accessories versus OEM ones. There are dozens of Internet-based stores that will provide such a discount. And, while they may not last as long as an OEM version, the cost to provide replacements is low enough where frequent breakage won’t matter. The same charger that is $29.99 from a carrier can be found for less than $10 online (even for OEM ones). The ‘trick’ is to find a good non-OEM brand that is durable and will last a long time. And yes, there is a difference in a cheap $5 charger and a $10 one. You do get what you pay for…

Upgrades (discounted equipment for renewing contracts)

Most people aren’t aware that if the have a phone that is not under contract, they are eligible for an ‘upgraded’ phone at a reduced cost, if they renew their contract. An upgrade is simply a new phone at a reduced price, similar to the discount received when you first purchased the phone as a new line of activation. If you have a phone that is not under contract and you are happy with your carrier’s service, and you aren’t going to switch carriers or deactivate the phone in the near future, then it is definitely worth it to upgrade your phone. When you upgrade your phone, you will have to renew your contract for two years (or one year in some cases). If you have a discount agreement with Nextel, you can upgrade your phone every 12 months (and the contract period is only 12 months as well).

After you upgrade to a new phone, you may then place the old phone in your inventory and use it when someone else breaks or loses their phone. When you replace a broken/lost phone with one that you already have, make sure that when you switch the service to the new phone, the customer care rep doesn’t extend your contract (they shouldn’t, but you need to remind them). So, if you aren’t leaving your carrier anytime soon, it makes sense to get a new phone as often as you can. It also provides a nice moral boost to the phone’s user (hey, I have a new phone!), and it also helps to build an inventory for those cases when you need an extra phone. Otherwise, you will have to purchase a new replacement phone at full MSRP.

How does your wireless rep make money?

It is important to understand how your wireless rep makes money. Given the fact that most companies don’t scrutinize their wireless account each month, you need to be sure that you what is happening with the phones on your account. Most reps make money on new activations (new lines of service), upgrades, extending contracts, and some even get a percentage of accessory sales. If you have a dishonest rep, they might be prone to extending contracts, adding unnecessary rate plans, or selling you that $30 belt clip or $40 battery when a cheaper one is available (from someone else). You should then be sure that when you make a change to a phone or a plan, that you aren’t allowing the rep to extend your contract if it isn’t warranted.

Finally…

In the end, your company could be wasting (or saving) thousands of dollars per month on your wireless expenses. There are literally hundreds of different scenarios to review on a cell phone invoice, and there are thousands of different rate plans (both active and legacy) across all of the carriers.

It is easier and usually more productive to hire a company to analyze your invoices for you. But, beware of companies that only look at your cellular usage, and ignore all of the other items such as data, fraud, text messaging, double-billing, etc. Be careful of companies that promise instant savings for a fee – they might fix your problem for now, but your monthly recurring invoices need monthly monitoring. And watch out for companies that use a cookie-cutter approach to analyzing your bill. Every account is different, and a good analysis really involves a human touch. There are web sites that offer a 60-second analysis on a single invoice, but a good analysis is done over three or four month’s worth of data for comparison reasons.

What is it going to cost me to save money?

Most telecom expense management companies charge a percentage of the annual savings for their fee in helping you optimize your wireless account. A typical fee might be 20% of the annual savings. Be careful that you validate the savings over at least a three month period. Don’t pay based upon their first savings “estimate”. You want to make sure that the changes that they suggest really will reduce your expenses by how much they are claiming. This confirmation can take 2-3 additional billing cycles. Be sure that your return on investment is less than two months. If you will save $100,000 a year, most companies will want to charge you at least $20,000. And, expect to pay on average $3-5 per month for invoice monitoring.

How my company, WideVision, helps companies reduce their wireless expenses… (yes, there is a commercial stuck in here)

Widevision is a wireless expense management company, and yes, we help companies manage their wireless expenses and devices. But, we don’t charge the industry average of 20% for the initial savings and then a monthly fee on top of that. Our consultation fees are based upon a yearly contract where we will perform the initial analysis on your account (where the majority of the savings occur), work with the carrier to implement the changes, and then continue to monitor your account for the remainder of the year. Overall, our cost for an entire YEAR of account services is typically around 10-15% of your annual savings. WideVision also provides replacement and help desk services – all included in our monthly consultation fee. We work with our clients to build a long-lasting beneficial relationship, and we aren’t in business to make a quick buck.

So, if your company utilizes wireless devices and you don’t have a professional telecom expense management company on retainer, you are probably wasting money – and you just don’t realize it. Widevision can help you find ways to cut costs without sacrificing the services you need. And it won’t cost you an arm and a leg. Spend $1, and save $10.

Tony Darnell is the CEO of WideVision, a wireless expense management company based in Suwanee, GA. WideVision specializes in reducing wireless expenses for companies with 50 to 5,000 wireless devices.

Found Money: Take a good look at your wireless expenses (part 2 of 3)

In the first part of this article , we took a look at how easily it is for companies to ignore or overlook the charges on their cell phone invoices.  Here we take a look at some of the less obvious charges, and what you need to look out for when deciphering your cell phone bill.

Add-On’s and Features

Many older rate plans usually offered an additional rate plan which provided a often much-needed single benefit or feature, such as: peak calling starting at 7:00 p.m., unlimited mobile to mobile, or unlimited nationwide push-to-talk (walkie-talkie).  These add-on’s usually cost an additional $5 to $10 per month, per phone, and the salesperson usually convinced you that you ‘had to have this’.  Since rate plans change constantly, the benefits from these older plans might now be included in a newer plan.  But you have to understand what is included in the newer plans, so you can drop these outdated plans.  And, if you have a large account, then you are looking at reviewing thousands of pages of an invoice, and reviewing hundreds of different rate plans.  One recent review of a potential client’s invoices revealed 262 different rate plans – on an invoice with 1,100 phones.  Many of these rate plans had the same name, but different features and benefits, which often adds to the confusion.

Seasonal Plans

Some carriers offer a seasonal or stand-by plan which allows you to pay a nominal fee of $5-10 per month to temporarily remove a phone from the regular voice and/or data plan (and the cost associated with it).  This seasonal plan plan is often used when employees leave, or when temporary (seasonal) help is not needed, and therefore the phone isn’t going to be used for a while.

One caveat to these plans is that if you allow the phone to be on a seasonal plan for too long (usually six months), the contract for that phone will automatically renew for another 12-24 months – and the carrier will automatically switch you to a very basic voice plan at a much higher rate.  And, for every month that you are on a seasonal plan, the contract for that phone is extended by one month. You should only use seasonal plans when you are prepared to manage their use effectively.

Billing Errors and Fraud

There are quite a few statistics floating around the ‘net concerning how many mistakes are on cellular bills.  All you need to know is that cell phone bills contain errors, and you can usually find at least one in every invoice.  The cost of the errors might not be much, but they can add up over time.

Fraud is a big problem for the carriers, especially on large accounts with multiple offices.  If you don’t catch the fraud right away, it is difficult if not impossible to catch later, when that fraudulent phone number is in the middle of the 1,000 other phones on your invoice.  And the carriers usually don’t do a very good job of catching fraud, given the fact that there are quite a few sales channels to monitor.  Pin codes and passwords can easily be hacked or even ignored during the sales process. And, the carriers usually don’t try to ask you why you are sending 20 new Blackberries to that empty warehouse in Brooklyn.

Productivity Increase

The cell phone was supposed to increase the productivity of our workers – correct?  However, very few companies actually analyze the cellular usage of their employees.  Do you know how many phone calls are made during the day? And are your employees making calls to help your business, or are they talking with their cousin in Topeka?

Sure, most paper invoices will list all of the calls made and when, but it is extremely difficult to cross reference this information to see how many of these calls were personal and how many were business-related.  If you get your billing information on a CD, you should be able to create a report that shows the percentage of calls made during business (peak) hours.  You can even cross reference the information against customer phone lists and your internal company directory to weed out those employees who are using it for excessive personal use during the day.

Finally, many carriers will automatically block calls to foreign countries, but usually Canada, Mexico and some parts of the Caribbean aren’t blocked from the start.  You should ask the carrier to restrict all international calls, and monitor your invoices for such usage, as a few calls to Mexico can add up to very expense charges. The same goes for international data usage – i.e. ‘data roaming’. One horror story is from a guy that went to a Caribbean island for a week, and racked up $2,200 in data roaming charges. The carrier is usually not going to credit these ‘oversights’.

Text messaging and instant messaging

If you have provided a worker with a cell phone, the chances are high that they will use it to send text messages (especially if they are under 30 years old).  Some users may only send one or two messages a month, but we have seen instances where users have sent thousands of text messages in a single month.  At $.20 per message, this may add up to several hundred dollars a month in usage charges.  And, your wireless carrier probably won’t even consider removing these charges.  You have to be preemptive and ask your carrier to block all forms of text messages before you give that phone to an employee.

But suppose that you give an employee an unlimited text messaging plan.  Perhaps they are in the IT department, and they receive text messages when a trouble ticket is issued.  So, their job description now requires that they have access to text messages.  How do you know that of the 1,000 messages that they received (or sent), all of these were for business purposes?  While a paper invoice will not have details on text message usage for each individual day (the total number of messages is usually summarized by the billing cycle), some of the billing CD’s will show you every single instance of text messaging – when and to whom the message was sent (sorry, none of the carriers will actually show you the message sent or received). You can then use this information to determine if an employee is being abusive.

High-speed (3G) data cards

High-speed data cards now make accessing the Internet from your laptop a breeze, especially for mobile workers or workers that travel frequently.  However, most high-speed Blackberries and PDA’s allow you to tether your laptop to your phone in order to access the Internet.  Instead of spending an additional $60 per month for the card (with a two-year contract and the cost of the card), you could have your mobile workers use their phones instead.  There might be some cases where this isn’t convenient, and a card is warranted.  But the ‘inconvenience’ might also lead to a higher level of productivity, as the mobile worker might not be inclined to waste time surfing the ‘net if it is too much of a hassle hooking their laptop up to their phone.

Dialing for information

When an employee needs a phone number or address, most don’t hesitate to dial 411 for information.  However, with each dial, the call is going to cost your company upwards of $2.00.  Instead of using your carrier’s 411 service, there are several free 411 services available that will provide you with the information you need, without the high cost.  1-800-FREE-411 or 1-800-GOOG-411 will provide you with the same information, and your only cost is the use of your cell minutes to make the call (some free 411 providers might make you listen to a 15 to 30 second advertisement). Or, your company may also opt to provide their own directory assistance services. There are several companies that offer this service.

Lesser-known features

Most carriers offer voice add-ons that can help a company cut down on their peak cellular usage.  Offerings like “Mobile to Home” or “Mobile to Office” enable a user to make as many calls to a single or group of phone numbers without using their peak minutes.  These plans are offered for a nominal fee – $5 to $10 per month.  But, unless you can analyze an employee’s usage, you won’t know if you could save money with these plans or not.

Unlimited Plans

With every carrier now offering unlimited calling for $99.99, cellular service is finally on the way to becoming a true commodity. Sprint Nextel even includes unlimited data, text, email (except for Blackberry BES email), TV, GPS navigation, UFO tracking (okay, I made that one up) for $99.99. It will cost an extra $20 per month to use a Blackberry Enterprise Server (BES) . If you take into account that 1,000 minutes will usually cost $50-60, and unlimited data/email is $30-40 per month, it does make sense to switch your heavy users over to an unlimited plan. Of course you will have to figure out the minute-usage threshold and data costs on a per carrier basis to determine if you should switch or not, but the savings could be significant.

In the last installment, we will take a look at the equipment costs involved with a wireless account, how you can drastically reduce these costs, and how to pick a wireless expense management company.

Tony Darnell is the CEO of WideVision, a wireless expense management company based in Suwanee, GA.  WideVision specializes in reducing wireless expenses for companies with 50 to 5,000 wireless devices.

Found Money: Take a good look at your wireless expenses

(Part 1 of 3)

Given the state of today’s economy, companies are (or should be) looking for ways to reduce costs, while maintaining the services that they need in order to continue doing business as usual.  Now, this statement is almost as cliché as “it was a dark and stormy night”.  The economy stinks, and so, yes, companies are cutting costs.

One expense that companies tend to ignore on a daily basis, much less during hard economic times, is their cell phone bill (or in fancy accounting terms, their ‘wireless expenses’).  And there is a good reason for this; reading and deciphering a cell phone invoice is harder than translating Homer’s ‘The Iliad’ from Greek to English.  And the carriers want to make sure that understanding your cell phone invoice is difficult.  A cell phone bill for a mid-sized company with 1,000 devices might contain over 5,000 pages of details.  It is a nearly impossible task to be able to read and understand the information and charges on all 5,000 pages.

Luckily, most carriers offer the billing information on a CD.  Now, access to this wealth of information should make deciphering your wireless expenses easier – correct?  Not hardly.  Let’s take a look at a CD that we received from a prospective client.  The CD contained the billing information for 180 separate  corporate-liable accounts.  The user interface is written in Microsoft Access (sorry Mac users), and the interface, well to be blunt, stinks.  You are limited to canned reports, and there isn’t anything intuitive or helpful about it.

If you dig deeper on the CD and find the actual Access database files, you might be able to bypass their user interface, especially if you have an Access guru available.  Inside the database, you will see 20 or so separate tables, with each table containing 25-30 columns.  Wait – there is a handy User’s Guide, explaining all of the columns in each table!  But, the explanations in the guide are generic and cryptic at best.  One example is a column named “call_type_feature”, which  in the user’s guide has the meaningful description of “Call Type Feature”.  It doesn’t explain that this column represents cellular calls, push-to-talk calls, packet data usage or the various types of messaging.  You have to figure that one and the remaining thousands of columns out for yourself.  And, a few of these tables are huge – with one table containing 1.2 million rows of data for a total of 1200 wireless devices (our company spent six months deciphering the database schema for one wireless CD product – and this is after working in the wireless industry for six years).

So, let’s assume that you have figured out all of the tables and columns, and you want to reduce your wireless costs.  You don’t want to switch carriers or ask your cousin who took a MS Access course at the county extension office for help.  Here is what to look for…

The Basics – Understanding your invoice

The first page of most cellular invoices contains a breakdown of all of the charges for that invoice, including amounts due from the last invoice, total amount paid, etc.  The wording varies from carrier to carrier, but each carrier usually lists these items, and most are pretty obvious, like messaging, directory assistance, etc.  One exception is the line item which usually has the name of ‘Access Charges’ -  this is another word for ‘overages’.  Take a quick look at these figures, and you can easily see the bulk of your ‘unnecessary’ spending.  If you don’t know what each line item means, ask your carrier representative (you might find that most of the salespeople won’t have any idea either, so call customer care).

Understanding your cell phone plans

When choosing a cell phone rate plan, it helps to know exactly what you are getting.  Terms like mobile-to-mobile, peak and off-peak are sometimes confusing.  Sure, the sales representative will explain them to you at the time of purchase, but once you leave the store, you will probably forget them by the next day.

The most important term is ‘peak minutes’.  ‘Peak’ describes the calling period where your cellular usage consumes the minutes from your cell phone rate plan.  If a plan offers 1,000 peak minutes, you will only be able to use 1,000 minutes during the peak time – so, you should understand exactly what time period falls into the ‘peak’ category.  Some providers have peak times from 7 a.m. to 9 p.m., others stop at 7 p.m.  Free ‘nights and weekends’ would then start at 9:00 p.m. (or 7 p.m.), and these minutes do not count against your rate plan allotment of minutes.  Free ‘mobile-to-mobile’ calling is when you call another cell phone for the same carrier.  These minutes used are not subtracted from the total number of peak minutes in your plan.

Rate plans and overages

The most common mistake that companies make is to try and assign a designated rate plan for each individual employee, and essentially estimating the amount of minutes an employee needs by pulling a number out of, well, you know where.  They are thinking that “Mary probably needs 600 minutes, so let’s give her the 600 minute plan”.  Given a 22-day work month, that only gives Mary 27 minutes a day of ‘peak’ calling time.  And no one realizes that Mary calls her friends during lunch and talks for almost the entire hour.  When Mary accumulates 726 ‘overage’ minutes at 40 cents a minute, that $49.99 rate plan is now costing the company an additional $290.40.  And most of the time, her additional usage and the resulting overages goes unnoticed for months.

Companies should try and get away from individual rate plans for employees and move to a ’shared minute’ plan.  Shared minute plans allow users on one account to share a larger pool of peak minutes.  For example, let’s assume that your company has 1,000 wireless phones and uses about 400,000 peak minutes per month on a single wireless account.  When determining the total pool of peak minutes that you need, you will want to add a buffer of at least 20% to that monthly usage amount, to accommodate fluctuations in usage.  So, your total pool of peak minutes should be at least 500,000.

You will then have 500 employees that are on a 1,000 minute plan, and 500 employees that are on a plan with zero minutes; but all employees will share from this pool of peak minutes.  The end result is 1,000 employees sharing 500,000 peak minutes.  Then, when Mary goes over her allotment of 600 minutes, she will just draw more minutes from the shared pool, and as a result, she will not have any overages.  Likewise, when an employee that previously had a 2,000 minute plan only uses 1,200 minutes, their ‘extra’ minutes are available for other users on the account.

You can’t always assume that the largest bucket of minutes is the best value.  You will want to figure out the cheapest ratio of ‘plans with minutes’ to ‘plans without minutes’ (add-a-phone plans).  Also, you don’t want to assign a shared plan with a large amount of minutes to an individual employee.  Assume that you assign five 10,000 minute plans to five employees, and the other 45 employees are on the add-a-phone plans.  If one of the phones for these five employees is turned off or canceled, then your shared pool has shrunk significantly, and overages are bound to occur.   In this case, you would want to assign a 1,000 minute plan for all 50 employees, so if an employee leaves, the total amount of minutes in the shared pool doesn’t significantly decrease.

Next…
In the next edition of this article, we will look at the ‘less obvious’ charges on a cell phone invoice – where lots of little charges add up to big money being lost – mainly because people just don’t know what to look for…

Tony Darnell is President and CEO of WideVision LLC., a wireless expense management company based in Suwanee, GA.

WideVision specializes in reducing wireless expenses for companies with 50 to 50,000 wireless devices – for more info, visit http://widevision.com.

AccessGPS is a low-cost GPS tracking application for your Nextel phone – visit http://accessgps.com.

There is such a thing as a free lunch…

One of the oldest business sayings is “there ain’t no such thing as a free lunch”.  This, for the most part, is usually true.   And I would tend to agree with this statement – except that I seem to be buying lunch for a lot of people recently.  There is another way of saying almost the same thing – “You get what you pay for”.  Translation:  anything that is free is often tantamount to being worthless.

Obviously, the general philosophy regarding these pearls of wisdom is the fact that more often than not, when someone offers you something for free, there is a catch.  How many times do you see an Internet ad for “Free iPod” or “free $25 gift card”?  Of course, with these ads, you have to complete and purchase a dozen things that you have no use for – just so you can get that free dinner for two at Chili’s.

Back in the early 1900’s, bars would offer patrons free food, as long as they continued to purchase alcohol.  We have the same thing nowadays, but it is usually in the form of free trail mix (and not very good trail mix at that…).    The best example of a free meal is the free breakfast at Embassy Suites.  Simply pay $200 for a room, and your $8 breakfast is free.  What a bargain!

And of course we have to remember the “loss leaders” of the world.  You get something for free, but the seller (giver) is going to make more money when you buy something else that compliments the freebie.  A personal example is a coupon for a free razor that I received several years ago.  I received the razor for free, but then I had to purchase these expensive razor blade refills (curse you, Mach III!).  Or what about the never-fail coupon where you buy a $4 sandwich and $2 fries, and they will give you a large Coca Cola for free (their cost for the syrup and carbonated water – 12 cents).  And finally, the classic “buy 24 (crappy) submarine sandwiches, and get one for free” – Elaine Benes taught us about that one…

Most everyone has heard of “caveat emptor” which is Latin for “buyer beware”.  But I am not sure if there is a Latin translation for “freebie recipient beware”.  When you were a kid in elementary school, how often would you offer that extra piece of food to a classmate – and instead of hearing “What’s the catch”, you would hear “Why, what did you do to it?”  People are generally weary of anything that is free, no matter what the source (and especially a soft red delicious apple when Granny Smith apples rock!).

Over the past few weeks, we have been reminded again and again that people are skeptical when they hear the word “free”.  We have a client that has over 3,000 delivery trucks.  In talking with them a few months ago, we discussed tracking their delivery vehicles via the GPS system built into their Nextel phones, and the benefits that they would gain.  Since most GPS applications that track cell phones (which they already have) cost about $20 per month on top of a $10 data plan, they weren’t very keen on paying $90,000 per month to track their vehicles – and unfortunately, the ROI just couldn’t justify the cost (even at the time with diesel at $4.00-plus per gallon).

So, we developed AccessGPS, a simple GPS tracking application that runs on their current Nextel phones.  And we decided to give it to our client for free.  Now, since we have a current relationship with this client, they didn’t balk at getting something for nothing.   And, with their carrier’s rate plan discount, they were able to get the cost down to $8.30 per truck per month with an ROI that  justifies the expense.  Our customer is happy, and we have retained their loyalty for a least the near future.

Since we had already invested in the development of the application, we figured that there had to be other companies that could benefit from our no-strings (or razor blades) attached generosity.  So, we started contacting other companies that could benefit from a GPS tracking system (free or not).  And of course, the initial push back was “why is it free?”.  They didn’t seem to want to hear about the features and benefits, their only concern was the lack of cost.  And most of these companies were already paying the $20-25 per month for a similar product.  They just couldn’t get over the fact that it was free.

Maybe it is because once you have paid for something (like their current GPS system), it doesn’t make sense for someone to offer it to you for free.  It is only when something starts out as free that people can understand the reasons behind it being free.  Do you think that Google is going to start charging people for their mapping software?  I doubt it.  Yahoo mail or Gmail at $5 per month?  Nope – both are free, and people aren’t going to start paying for it either.  I guess that we just need to tell our prospects that the GPS tracking software isn’t free, but it is $10 a month – and they can try it for three months for free.  And then we just forget to invoice them…

Or, maybe we just need a coupon.

Tony Darnell is President and CEO of WideVision LLC.

WideVision is a wireless consulting firm, specializing in invoice analysis and complete wireless lifecycle management – visit widevision.com.

AccessGPS is a free GPS tracking application for your Nextel phone – visit accessgps.com.

Want to Save $240,000 to $480,000? Here’s How…

On Twitter, SprintNews (twitter.com/sprintnews) recently posted a tweet for a new Sprint Nextel marketing campaign titled “Want to Save $240 to $480? Here’s How”.  The link (http://tinyurl.com/6rv9fj) embedded in the tweet sent you to a press release titled:

“As Wireless Consumers Feel the Economic Pinch, the Value of Sprint’s Family Pricing Plans Trump Verizon and AT&T – Families Can Save at Least $240 and Up to $1,000 Annually with Sprint Wireless Plans”

I applaud Sprint for trying to reach out to consumers in order to stop their spiraling churn (loss of customers).  For the past couple of years, right after their merger with Nextel, Sprint has committed dozens of business blunders, resulting in the loss of several million customers – and their stock has dropped from +$20 to less than $2.  The two “blunders” that I can easily remember were their decisions to ignore the Nextel customer base and Nextel iDEN network – which operates separately from other cellular networks, such as CDMA (Sprint, Verizon) and GSM (AT&T, T-Mobile) – and to “streamline” their customer support organization.

I don’t think that Sprint realized the customer loyalty in their Nextel direct connect product (the push-to-talk walkie-talkie feature).  Nextel users, who loved using direct connect, were almost as loyal to the Nextel chirp as Macintosh users are to their Macs.  Sprint neglected to maintain or expand the Nextel network, and once-loyal users jumped ship to other carriers, who offered free mobile-to-mobile calling as a way to squash the unlimited direct connect feature.

Many of Sprint Nextel’s rate plans for the Nextel/iDEN network included free unlimited direct connect, but users still had to pay $5 for unlimited mobile-to-mobile cellular calling.  Since the other carriers already offered free mobile-to-mobile, it was easier to switch from Nextel to another carrier.

But what made it even easier to switch was the poor customer (no)service experience.  Sprint decided that they didn’t need as many customer care reps or sales people (who besides selling, also performed account management duties), so they laid off hundreds.  Customer care then went downhill, and it gave the direct connect die-hards another reason to justify leaving.

So now, Sprint is playing catch-up.  Last summer, they finally offered free mobile-to-mobile calls on many Nextel rate plans (as well as unlimited nationwide direct connect).  If they had only offered this two years ago, they might not have bled as badly…  They have been very proud of their direct connect and other voice add-on’s, waiting too long to integrate them into their regular rate plans as a free feature.

However, they have trumped the other carriers with an $99 unlimited voice plan that included data – which costs as high as $50 per month – text messaging, TV, music, UFO tracking, etc.  The other carriers simply offered unlimited voice for $99.  And, their other voice rate plans are just as competitive (if not more so) than the other guys.

Sprint is making headway.  They still have great products, customer service is improving, and they are rededicating themselves to supporting the Nextel network.  They still have over 50 million subscribers, and I believe that they will turn the ship around.  Coverage is still as good as Verizon – Sprint just doesn’t shove this fact in your face like Verizon – but maybe they should (if I see one more “we have the network” commercial, I am going to shoot my TV).

But, in the meantime, what else can Sprint do to stop the carnage?  Well, they could copy our business model.  My company, WideVision, specializes in “wireless invoice management”.  Simply put, we review your monthly wireless invoices and determine if you are paying too much for the wireless services you need.  The wireless carriers change their rate plans all of the time, but many businesses don’t take the time to see if they are on the right rate plan for what they need.  They simply just pay the invoice month after month, and then when the invoice gets too high, and the T-Mobile salesman knocks on their door, they jump ship.

Sprint needs to keep the customer base that they have – many of whom are still loyal Nextel direct connect users.  Sprint should reach out to their current customers and assist them in “fixing” their rate plans.  But why would a company want to voluntarily write down their own revenue?  Well, they don’t – and they won’t (and I don’t really blame them).

We have reviewed thousands of invoices, and there is rarely an account that couldn’t use a bit of tweaking – which results in direct savings.  Even when we review accounts that are being managed by other similiar companies, we can usually still find additional savings.  Invoices have to be reviewed each month, and changes need to be made to accomodate changes in your business.  Many of the accounts that we review have hundreds to several thousand phones, and we typically can find tens or hundreds of thousands of dollars in annual savings – and with a return on investment of more than eighty percent.

So, to save $240 to $480, switch to Sprint.  They have good products, and things are improving.  To (potentially) save tens or hundreds of thousands of dollars, give us a call.  We can only hope Sprint doesn’t catch on to our idea.

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Tony Darnell is President and CEO of WideVision LLC.

WideVision is a wireless consulting firm, specializing in invoice analysis and complete wireless lifecycle management – visit widevision.com.

AccessGPS is a free GPS tracking application for your Nextel phone – visit accessgps.com.

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Disclaimer:  Tony owns a ton of Sprint stock, and is a Sprint Nextel authorized dealer.

I can save you money. No, seriously…

Being a salesperson, I am forced to contact people that I don’t know and to try and sell them my services – and to get them to say ‘yes’ (flashback to college days at O’Malley’s bar in Athens, Georgia).

And, since fate (well, the IT dot-com bust and a merger/downsizing that was beyond my control) has brought me into sales, I am now making a living trying to get people to listen to me.

The life of a salesperson shouldn’t be that difficult. If you have a great product or service (which I have), people should be beating a path to my door. But they aren’t. My service consists of the ability to save people money by reducing expenses that they already have. I am not trying to sell them a new gadget or trying to get them to sign up for a new investment scheme that my cousin just joined (he swears by it) – I honestly can save them money. They simply have to follow my (expert) advice, and then pay me a small fee instead of over-paying for the services that they already purchase from other businesses.

Yes, I do get paid a fee based upon how much money I can save them, but who wouldn’t spend $1 to save $5? Who wouldn’t spend $75,000 to save $500,000? Well, obviously, there aren’t that many takers out there.

A typical sales meeting goes like this:

Me: Mr. Jones, after careful review of your expenses in this area, I believe that we can save your company over $428,000 in the first year.
Mr. Jones: Wow, that sounds great.
Me: So, when can we get started? You ROI on this project is less than two months.
Mr. Jones: Well, we don’t have it in the budget, and it might take some effort on my part. We will call you when we are ready. Oh – and thanks for lunch. The surf-and-turf was excellent. That lobster was the size of a cat!

So, that leads me to believe that all of this hype about a bad economy is just that – hype. Companies aren’t really interested in saving money – heck, they must have tons of it. Gas prices are out of control? Nah, someone is just too lazy to increase production. Real estate prices are in the tank? People are just too tired to pay their mortgage (heck, American Idol is on!).

Even when you offer a bit of free advice to save them money, they turn you down:

Me: Mr. Jones, if you would just do these three things, you can save $30,000 – and I am even going to waive my fee. Just do these three things – I even wrote them down for you. And, here is how you do these three things, I wrote that down as well. Heck, I will even do it for you, just say the word…
Mr. Jones: Thanks, but we have it all under control. We are fine. Oh, thanks for lunch. I didn’t realize that Beluga caviar was that salty.

This leads me to believe that complacency is vital to operating a successful business. Heck, it seems to work for the multi-million dollar companies that I contact. I can understand that I am not the only one selling snake oil to these companies. But my snake oil works – it really does! I tried to be complacent, but I found it doesn’t pay the bills. My phone never rang.

You see, I believe that I have built the better mousetrap. My trap will not only kill the existing mice, but we also spread the word to the other mice, and they aren’t going anywhere near that box of gummy bears in your pantry. Honest.

I have even gone to companies where they were using the same service from my competitors. And, even after I have found mistakes that my competitors were making, they still decide to stick with what they have. Complacency rules!

Colin Powell (former Secretary of State and Chairman of the US Joint Chiefs of Staff) once said: “If it ain’t broke, don’t fix it’ is the slogan of the complacent, the arrogant or the scared. It’s an excuse for inaction, a call to non-arms.”

Now, I don’t think that these prospects are arrogant or scared, but I do believe that it is an excuse for inaction. The main reason is probably because they have been approached a thousand times by other companies with the same claim as mine – and were probably burned by a few of them.

But I don’t get paid until I have caught the mice. And I can even point out where the mice live, where they eat, and how they are managing to get into their desk where they keep their Raman noodles. But it appears that there are tons of mice-loving, happy-go-lucky people out there.

I guess I need to ask my prospects if they are cat-lovers first…

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Tony Darnell is President and CEO of WideVision LLC.

WideVision is a wireless consulting firm, specializing in invoice analysis and complete wireless lifecycle management – visit widevision.com

AccessGPS is a free GPS tracking application for your Nextel phone – visit accessgps.com