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Which mobile brand is doing the best job of engaging customers online?

James Hammersley compares the ecommerce performance of the companies in the headlines against their key competitors and benchmarks them to find the real winners & losers.

Carphone Warehouse has actively set out to compete online with the leading mobile telcos to capture customers (and their data) and act as an aggregator in the market.

In response O2, Three, EE, and Vodafone along with many of the challenger brands have responded by keeping their most popular SIM-only products in their own channels and invested heavily in trying to attract and engage customers directly into their sales funnels.

So who is engaging the customer and who is left hanging on?

Traffic

Insight: Revenue comes from traffic that converts. Having more traffic than your competitors is a real advantage.

Analysis: Among the five companies, there are c.15m visits on Google in a month from desktop/laptop alone. This suggests that while there may be some growth left in the market (Ofcom reported an increase in handsets in 2017 over 2016 of c.1%), current customers are actively looking for options as contracts come to an end.

Carphone Warehouse captures the second highest amount of traffic, while Three sits significantly behind the other four. EE leads the pack – and its advantage means it is putting its pitch to c. 16% more customer engagements than O2. Three suffers here in terms of scale by having no cross-selling opportunity to broadband/fixed-line or TV.

Paid campaign

Insight: If you are confident about your sales execution (ie customers stick on your pages and convert well) then you don’t have to outbid your competitors to gain a top three ad slot, which is where you will attract exponentially more traffic than position 4 or below.

Analysis: This suggests that Carphone Warehouse is attracting interest in the market far more than the telcos – it is buying approximately 33% more visits than O2 for example, despite O2 bidding for slightly more keywords. EE’s dominance in traffic is even more significant given its AdWords performance – its search advantage comes predominantly from its organic activity.

Of the big players Vodafone’s strategy is the one that looks the least successful. Given the cost of many of the keywords in this sector (at time of writing it will cost something like £2-£4 per click for iPhone8 and Samsung Galaxy S9 for example), the investment that Carphone is doing to achieve this advantage will be significant and against the telcos may well be more punishing for margins.

Landing pages

Insight: Landing pages are a mark of how well you understand the different customer needs that you are fulfilling. The Landing Page Ratio indicates how much thought is going into segmenting both the marketing proposition and the initial sales engagement – the higher the ratio, the more effective the customer engagement. The ratio takes the top 100 keywords and identifies how many, as a percentage, have an individual landing page.

Analysis: It is obvious that in terms of landing pages, O2 performs better than the others with a landing page ratio of 60%. In contrast, none of the others gets much over 40%. This could be particularly tricky for Carphone as it is buying so many more visits and potentially landing more of these on less relevant pages than visits to O2; as such that there is a bigger risk of wasting its investment in paid marketing.

Toolbox

Insight: Listening to your customers is vital, without understanding the needs and wants of a potential buyer it is near impossible to improve conversion.

Analysis: Only EE has a way of listening to its customers online and getting their feedback. This is a significant advantage over everyone else in this competitor set. Three is at an even bigger disadvantage as they are blind as to their on-page performance.

What can you tell from this?

The obvious conclusion: EE is the leading competitor among these five companies and at one level it should be, given it is the largest player in the market. Part of its strength is the ability to reach a good level of traffic despite having the lowest average ad position. It has the capacity, capabilities and financial backing to use this advantage to drive further gains. O2’s brand strength and customer loyalty will help it stay in contention.

The inevitable conclusion: Three appears to be the struggler as its search traffic levels remain low compared to other competitors. Also, the absence of a complete toolbox makes it more difficult for the company to optimise conversion.

The surprising conclusion: Vodafone, until the creation of EE, the largest player in the market, looks rather lacklustre in a market that is only going to get even more competitive. It continues to lag behind EE and O2 – for example the launch of Voxi comes six years after O2 launched giffgaff – and its reputation for customer service is doing little to help it win against the competition.

The insight: Dixons Carphone is going through a challenging period and new chief executive Alex Baldock has had to face a tough time as he adjusts market expectations. While there is a great battle in the appliances market, this suggests that there are also headwinds in mobile and broadband.

More recently it has been focusing on connected products, but to make this generate the same levels of profitability that network commissions have provided in the past, it will need to make a significant investment in developing a market-leading reputation for educating and supporting customer decision making, selection and post-purchase service in the emerging connected product segment. This engagement starts online.

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