Why Wireless Operators Don't Sell Online

"Most operators … spend less than 1 percent of their advertising and sales budget on the online channel."

--A.T. Kearney

A.T. Kearney has an article on its thought leadership page titled "Selling Wireless Services on the Internet: Turning Clickers into Buyers," by Suman Sarkar, Bruce Klassen, and Martin Fabel. It reports a very interesting fact and what to do about it: that marketers of U.S. wireless services sell only about 3 percent of their products online versus U.S. retailers that sell about 12%.

The premise of the article is that wireless operators are missing out on a good thing by not catering to niche buyers who are either A) smart enough to buy high-end offerings without help from a store associate; or B) only want the basics anyway so they don't need a lot of help. The cost of sales online is a tiny fraction of brick-based retail, and 70% of buyers are already visiting operators' sites before they buy. So what's the big deal here? Let's just go out and buy some online marketing talent and have at it.

It's not that they can't -- or that the thought hasn't occurred to them -- so it must be that they don't want to -- and here's my theory why: To marketers, wireless services present a delicious mix of complex product and plan options that offer commissioned human salespeople a major upsell opportunity as they "help" customers navigate the fog. Higher web conversion rates would mean cannibalizing those sales at much lower margins. You can only cut a finite amount of cost out of anything, but you can always raise prices if you can get the customer to pay more.

And wireless operators know too that sooner or later their products may very well become commodities -- but they're not there quite yet. For now, their "product" is really the service plan, not the device or the minutes. There will be time enough later for niche and skimming strategies -- web based or otherwise. Staples. Lands End, and Apple do well online because a no hassle customer experience is part of their brand. Right now, the U.S. wireless market is a completely different game.