Remember the channel standoff around poaching and churn? Well now, O2 shops are actually working with dealers, such as Purecom, to boost sales. Michael Garwood observes a dealer revolution in Shrewsbury
Shrewsbury-based B2B dealer Purecom is a “small company with big ambitions”, according to its founder and managing director Matt Sandford.
Such a statement is perhaps a better indication of Sandford’s own appetite and confidence than it is an actual measure of Purecom’s scale, for Purecom manages a very credible base of 620 customers and 8,000 connections, and claims a seven-figure turnover and decent profit.
It has built its base steadily over a period of five years, and claims in the period not to have lost a single customer to a rival business. Its churn is market-leading for a customer-facing business in this sector. And yet Sandford is ready to put his foot on the gas. He has organised an office move and set a blueprint to triple the numbers it has put on in five years in just three.
And he has the support of O2, Purecom’s chief provider. Few dealers, if any, work so closely with an operator partner. Far from the grim days of network poaching and dealer churn, Purecom has embarked upon a collaborative programme with O2 retail stores in his local area, which sees consumer business passed one way and business sales the other.
Purecom’s story is one of the more forward-looking in the difficult dealer channel. O2 is essential to its plot.
History and ambition
Sandford suggests Purecom is punching above its weight, and concedes his ambitions for the company are stretching. But he also reckons they are achievable, and in line with its hunger.
“We are 100 per cent on the acquisition trail; no two ways about it,” he says.
“We are young still, and we have to grow. I would like to think that within three years we’ll have 25,000 connections. That’s where we want to be. It may sound ambitious but, then, we are ambitious.”
And Sandford knows the game well enough. He set up dealership Ternhill Communications, also in Shrewsbury, in 1986. The business managed 20,000 connections at its height. It was sold to service provider Project Telecom in 2002, where Sandford took the role of regional sales director.
In turn, Project Telecom was sold to Vodafone eight months later for £155 million and Sanford exited.
Subsequently, Sandford was approached to sit on the board of directors at service provider Yes Telecom, where he remained for three years until its sale to Vodafone also. In the period, Yes Telecom grew staff numbers from 26 to 144, and turnover from £6 million to £44 million.
He claims to have enjoyed his time at both Project Telecom and Yes Telecom but says he prefers to be his ‘own boss’.
And after some persuasion from old Ternhill customers, complaining about service levels from their subsequent suppliers, Purecom Communications was born in 2006 with the old “hug them, love them, squeeze them” values Sandford had instilled at Ternhill.
Back and front ends
Sandford now finds himself in the process of, literally, building the bricks-and-mortar foundations of Purecom again, at a new site a stone’s throw from its modest housing at present.
It expects to move into the facility, which covers 3,800 square feet across two floors, by Christmas. A new recruitment programme will run in tandem with the office move, and Sandford reckons Purecom will double its headcount to 16 by the middle of next year.
The company received IS09001 certification for its systems and processes in June, something Sandford is proud of. The new office will build on its present resources, including a training and events area for staff and customers, equipped with plasma screens and demo units.
This customer-facing aspect is important for Sandford. Purecom spends a “great deal” on staff training and customer service. It has to “exceed expectations,” remarks Sandford. And impressions count for him. The company website is being overhauled so it is more interactive and so customers can access information from their mobile phone as well as their desktop computer.
Sandford’s point is most dealers talk a good game, but follow-through is generally lacking in most cases. The high-quality video testimonials from customers online, for instance, make Purecom stand out from the outset as a quality provider. Customer references are handed to prospective clients on a Purecom branded USB stick as a matter of course.
But ultimately, effective customer service must underpin this exterior work.
“First impressions are important, as are second and third impressions. Ongoing service has to be first rate. Otherwise customers will leave. Customer service is everything. We probably don’t make as much as some dealers because our customer service work is so labour intensive,” he says.
“No matter is too small for us. No customer ever speaks with the network. We deal with everything.”
A way to limit issues down the line is to manage customers’ expectations in the first instance, observes Sandford. “You have to instruct customers mobile broadband is not going to allow the same speeds as home broadband, for instance. You must manage expectations. If you deliver what you promise, then no one gets disappointed.”
But for some minor Vodafone and Orange sales, via VPS and Avenir respectively, Purecom is an O2 dealer. Sandford has been an O2 loyalist since the Ternhill days, in part just because O2’s signal strength in the West Midlands area is superior, he says.
“From 1986, right from the outset, we have always been behind the blue network,” explains Sandford. “That’s how it’s always been. Yes, we connect Vodafone directly also, and do some Orange sales but 95 per cent of business goes to O2.”
Purecom became one of 18 O2 Centre of Excellence dealers in January 2009, and as such is recognised by the operator forits high ARPU and low churn. A longer-term Centre of Excellence contract has been signed since.
Sandford shows a certificate recently presented to Purecom by O2 head of partners Maggie Kennedy and O2 business sales director Ben Dowd for achieving annual churn levels of below five per cent. In fact, Purecom’s churn is practically zero.
“In five years of trading, we have only lost one customer,” explains Sandford. “We’ve had customers leave after going into liquidation, but they are not actually leaving to go elsewhere.”
O2 head of SME sales David Plumb says of Purecom: “It does an incredible job for business customers. It has an incredibly high standard of service, clear in the fact it is a founder member of the sub-five per cent churn club.”
Data is, of course, another prerequisite of elite dealer clubs these days, and Purecom reckons half of its base is now tied into some form of data package, mostly with BlackBerry bolt-ons.
“We are pro-BlackBerry,” he explains. “It is the perfect business tool. I don’t dislike the iPhone, but I don’t see it as a business tool. We sell it, but I will talk up BlackBerry all day long.”
In the consumer market too; Sandford applauds the Canadian firm’s entry into the space and appeal to a wider market.
“The BlackBerry 8520 is a fantastic phone,” he says, pointing out its functionality and £150 or so SIM-free pricepoint, and the relative disparity when lined up with the £400 plus iPhone.
Standford likes the continuity in O2’s channel team. It is easier to build relationships with O2, he suggests.
“I don’t want to knock Vodafone, but my day-one mission on setting up Purecom was to get an O2 relationship. In the old Ternhill days I found it really good to work with and I am still dealing with a lot of people I was 10 years ago. It seems people at other networks come and go every five minutes.
“At O2, the culture is consistent. It doesn’t change with the wind when someone new starts. That’s so valuable.”
He goes on: “I’m old fashioned about certain things, I guess. Business works better when it’s with people you like, and I like the people at O2. They don’t always get everything right but they do listen when they don’t, and they address any issues that come up.
“Sometimes you look at the upfront [commission], and think, yes, I could make more money elsewhere. But your view has to be longterm, and O2 talks the talk.”
As a Centre of Excellence partner, Purecom was earlier this year handed a number of O2 clients to manage, understood to be several thousand in terms of connections; customers originally signed by O2 direct and distributed among its elite dealer base to manage going forward.
Purecom accepted a glut of business accounts of five-15 lines based in the West Midlands area. Sandford says Purecom turned down the chance from O2 to manage certain smaller accounts, and accepted instead a handout where the profile of business better suited its regular 20-25 line accounts.
“It’s brought down our average a little but it’s all good quality business,” says Sandford. “It’s an incredible gesture from O2 really. It shows its belief in our service offer. To buy a base of that scale right out would cost a lot of money.”
Rules of engagement
Sandford likes the new rules of engagement O2 has set down with its dealer partners, which he says have removed conflict between the channels. More often, O2 will work with dealers and intervene to help them win accounts.
If business customers with direct relationships with O2 look to exit their contract because of service levels, the customers are passed to its dealers to manage.
Sandford remarks: “We now work corroboratively with O2. There is no ‘us and them’ anymore. O2 steps in to help if I need support with big deals. If it has customers which prefer to be managed locally, they might be referred to us.
“We are working on a deal for 300 connections in Birmingham and O2 is supporting us. Anything under 15 connections, it passes straight to us. It’s a real partnership. Two years ago, you could never work like this. O2 knows what a damn good job we do for it.”
Purecom’s collaboration with O2’s direct sales team in many ways sets the benchmark for new dealer-operator relations. It has now established a presence within local O2 retail stores in the Shropshire area for B2B connections.
For the past few months, it has been receiving leads on business enquiries made in store for connections over a certain number which surpasses the allowed limit to be connected in store.
Purecom, at the time of writing, had connected 15 business deals through leads from stores in Telford, Shrewsbury, Lichfield and Cannock.
O2 retail staff receive a commission based on all successful leads to Purecom, paid by O2.
Purecom sales managers regularly meet with O2 store managers and also attend their regional meetings. O2 staff are even being invited on Purecom team building events. Likewise, enquiries into Purecom about consumer tariffs are passed to O2 retail staff.
“We work with all the O2 stores in our region. It’s still early days but we are already doing good connections as a result,” says Sandford.
Plumb says: “It works really well with the O2 retail stores and direct sales people in their area. The cross channel collaboration provides a fantastic customer experience and allows customers to benefit from the unique value multiple channels can deliver.”
It is the kind of highly-developed channel relationship that, arguably, those operators only now hooking up their dealer channels to their future vision of third-party sales cannot yet match.
And Purecom is among O2’s chosen ones.