The Ultimate Small Business Mobile Phone Buyers Guide
You've come to the right place
So, you’re a small business owner or manager looking for a buyers guide to help you to buy business mobiles phones? You’re in the right place. As a small business you can’t know the ins and out of every product or service you buy. That’s why we’ve built this guide specifically for small business owners and managers to help guide them through a market that is fairly complex.
We’ve built this guide because we know your time is valuable. The whole guide is obviously worth a read, however we’ve broken it down into easy to digest sections so that you can focus on the parts that are most important to you and your individual circumstances. We’ve also created some handy tools and downloads to help you.
Business mobiles are one of the most important “back-office” contracts a business can sign: more and more business applications, data, emails, contact with customers are handled via smartphone. The costs can also be significant. Contracts for just five employees in a small business will cost many thousands over a typical two year period. Therefore getting these contracts right is critical.
Even if you don’t want to move networks there are important savings that can be made with a little upfront planning.
What this guide will give you:
Information on how the small business mobile telecoms market works
Identify the information you need upfront
Tips and hints on how to drive the best deal from your provider
For any job that needs to be done well, preparation is key. You’re going to get the most out of this process by doing a bit of preparatory work up front. Most of this is simply taking some time to think through what your objectives are, but you’ll also need to dig around in your bills and contracts to get some key pieces of information too.
Here’s what we’ll be covering:
Setting out your objective
Understanding what you’re spending today
Understanding more about data usage and growth
The key dates in your current contract
Setting out your objective
This might seem obvious or a rather simple question, but it’s surprising how often people overlook it. Don’t dive into the process of getting offers from the networks without thinking about what your objectives are - what the most important factors are for you and your business. If you leave this part to the salespeople you meet you could end up with a contract that isn’t fit for purpose.
Think about what you want to achieve from your contract over the next couple of years.
New kit for the team
This is probably the most common objective.
Are your old devices getting old, broken or slow?
Are old and broken devices not giving the right impression to your clients?
Do more of your staff work out in the field and need quality mobile devices?
The next most common objective when looking for a new business mobile contract is to save money. When you’re spending thousands on a service, the temptation will always be there to shave a bit off the monthly bill.
Has your business reduced in size since last contract signature?
Do you have more staff using their own devices?
Do your employees travel less
Do you have old add ons that aren't needed any longer?
To enable new ways of working
More and more of our daily lives are run and managed via smartphone. For small businesses this is no different.
Mobile opens accounted for 46% of all email opens, followed by webmail opens at 35%, and desktop opens at 18%. – Litmus “Email Client Market Share Trends” (Jun 2018)
Do you increasingly use any of these apps on the move?
All of these apps are moving from being exclusively on the desktop to having smartphone capabilities too.
If your business is one of those putting mobility at the heart of how the business operates then enabling these technologies will be one of your objectives.
Adapting to new customer expectations
Related to the objective set out above, the expectations of your customers may have changed too. Think about any recent client wins:
Has your business won new types of business?
Have you won contracts overseas or where staff will be out of the office more than they have been in the past
Do you and your employees visit client sites more often than in the past.
If the way in which your business does business has changed then your mobile phone contract should reflect this.
Your business will have changed since you last renewed your contract. Whatever the objective you are setting for your business is take time to think about it.
The more you are able to drive the objective, the less able a salesperson will be able to enabling you to drive subsequent conversations better.
Here’s what we think you need to be thinking about:
Do you need new equipment for the team?
Do you need or want to make savings?
Do you need to adapt to new ways of working?
Do your customers have new expectations
Get a free template here that will help you to work out your business objective
Know what you're spending and where
Know how much you are spending and where
You’ve now taken some time to establish what you and your business are looking to achieve. The next step is to do some work on establishing how much you are currently spending on your mobile phone bills and what you are spending it on.
You likely spend on some or all of these things:
Mobile phone contracts aren’t like buying a product from Amazon that has a set price. Your bill is made up of:
Extra services (perhaps software licences for mobile device management or email)
You can read more about extra charges in a future post.
Why is this important?
The networks are obsessed with calculating customer value. Customer value is basically the margin they will make from you over the period of your contract. Customer value is therefore the sum of all the revenue less the investment they make in you as a customer (typically the value of the handsets they give you).
A customer with a high customer value relative to the investment the network has made will have the ability to push for extra discounts or higher value devices than a customer with a low value.
Your spending checklist:
Get three months worth of billing
Check your spend on:
Call and data charges
Roaming (including roaming packages)
Your current mobile phone provider knows how valuable you are. Systems and algorithms, developed over many years, will calculate this for them. If you are asking a new network to quote for you, they won’t have similar information available to them. It’s therefore important for you to be able to provide them with this information if you want to drive a better deal for yourself and your business. Most small businesses should be able to show at least three months of bills (preferably in Excel format). You can either just hand these over to whoever you are asking to quote or run the calculation yourself. Check your bills and work out how much your business has spent on the the following items:
Shared Bundle Costs (if applicable)
Extra charges for usage - minutes, SMS and extra data
Roaming Packages - £3/5 per day roaming costs
Value added services - things like extra software, apps you use
If you’ve spent consistently on items falling into 3, 4, 5 you should be able to push for money off your line rentals or extra investment in better devices.
Examples of two different customers
Jim is a consultant and spends £45 per month on line rental and a further £20 per month on roaming charges when he travels to the US once a month.
Line Rental: £45 x 24
Roaming: £20 x 24
Customer Value: £960
Investment Ratio: 38%
Lisa manages a small factory and spends £15 per month on line rental and £2 per month on other charges such as national rate calls.
Line rental: £15 x 24
OOB Charges: £2 x 24
Customer Value: £158
Investment Ratio: 61%
As you can see, the percentage of the total contract value the network is investing in Lisa is much higher than for Jim, therefore Jim is more likely to be able to extract discounts or perhaps a better device than Lisa is.
How much data?
As indicated above, more and more mobile applications are being used in business to help mobile employees stay productive.
The average small business continues to use around about 2GB of data per month, per user - with the key caveat that the phone is for business type applications such as email, web browsing and business applications.
If you are going the way of some other small businesses and using more rich media applications (video conferencing or live streaming in particular - think of a plumber livestreaming a problem back to the office in real time), you’ll need a lot more data going forward.
Here’s the example of using Netflix, which is reasonably comparable to a video conferencing or live streaming type of application:
Another use case where data usage for small businesses can be high is tethering a phone to a laptop or tablet. It’s hard to calculate how much data tethering will use as it depends on what you end up browsing for on your laptop or tablet.
A page designed for a laptop is likely to use more data than a page designed for a mobile device. If you stream a lot of data on a page such as Netflix or Spotify you’ll end up using a lot of data whilst tethered..
Data Usage Example
Streaming one hour of Netflix in HD will use:
Streaming five hours of Netflix in HD will use:
Streaming a lot of video uses a lot of data for even small durations.
If streaming gets out of hand, an entire data allowance can be used in a matter of hours
Know your contract end dates
One of the ways in which it can be more challenging to move between mobile networks or providers is where you have a number of lines with a number of different contract end dates.
This is a particular problem where you have a plan where all of your users share a pot of minutes, SMS and data.
If you try to leave a network to go to another they will typically look to have the lines that are still in contract bought out. You should offset the amount of buyout against any tech fund or investment the new network is prepared to offer.
Before entering into any agreement with a new provider it is important to ascertain the cost of buyout - we have seen a number of businesses surprised when they look to cancel lines with a legacy network provider and find there is a large bill to pay for lines still in contract. This often leads to deals falling apart and a lot of wasted time.
If you want to move network providers it may be necessary for you to buyout your contracts. See this example for an explanation.
Contract buyout example 1
Here, we have a business with four lines, three of which are out of contract, one of which is in contract.
Total buyout required: £110
Contract buyout example 2
Here, we have a business with seven lines, two of which are out of contract, five of which are in contract.
They want to move their contract from O2 to EE. In order to do so they will have to buy out the in-contract lines from O2.
Total buyout required: £315
Be clear on which of your lines are in contract when you look to move network
Contract buyout can have a significant impact on the amount you have to spend on new devices, tech fund or have as cashback.
How many lines do you need?
As businesses grow they tend to add more and more lines to their mobile phone accounts. As employees leave, they can be forgotten about until someone audits the bill or the account and closes them down.
Dormant or inactive lines don’t tend to be so much of a problem for smaller businesses, but for larger ones they can be a major unnecessary expense. In larger companies as many of 10% of their lines can be dormant - employees who have left the business, those who use a personal phone rather than the allocated business one and so on.
If you think this could be a problem in your business be sure to get a report from your network and audit who is using what in your business.
The simplest way to reduce cost is to audit your lines and remove those not being used
What are the tariff options?
As a business you have a broader range of tariff options than as a consumer. Normally, businesses go down one of two routes:
So, what’s the difference between each of these?
These are plans where each user on your account has their own discrete tariff. That means they’ll each receive their own allowance of minutes, SMS and data and do not share it with other users. Each user pays a monthly fee in line with the type of plan they have. These plans can be sim-only or bundled with a device.
As a business you have a choice between individual and shared plans
Usually this means an allowance of unlimited minutes and texts for each user and a shared pool of data. If sized correctly, the pool of data should give all of your users enough shared data to get them through the month.
Pros and cons of individual plans
You purchase plans that are large enough for users who use a lot of data so they don’t consume all of the shared pool
You can attribute costs to cost centres more easily if you need to as each user has a clear individual cost
Moving users to another provider is easier as you don’t have a shared pool of data to worry about
You probably won’t end up using the data as efficiently as lots of users might end up with a surplus at the end of the month
May work out more expensive overall
If cost is your main concern, shared plans will probably work out cheaper
Pros and cons of shared plans
Shared data tends to be used more efficiently than individual data allowances
A shared plan with enough users probably costs you less overall
Harder to account for the cost of the shared pool of data
Can be harder to move users as you have a shared pool of data and staggered end dates for sharers
Because the cost is less, it may be harder to get high end devices on a shared plan without paying more
Heavy users of data can eat into the overall shared allowance and leave other users short
A shared plan will work well if you have enough users to use the shared pool of data efficiently
What sort of devices will you get?
This is probably the biggest thing your employees will be interested in. When they get a shiny new phone, what is it going to be?
This is probably also the area where expectation and reality collide most violently. It all comes down to having a feel for how much a network is prepared to invest in you as a customer. If you want to have new top spec iPhones for everyone your bills are going to have to be pretty high to cover the cost. Most likely your tech fund will cover low to mid range devices. That doesn’t stop you asking for iPhones or top of the range Samsungs but it pays to be realistic to avoid disappointment.
Be realistic about what type of device you can expect based on how valuable you are to the network
How do you want to buy your next contract?
Now you’re ready to get going on the purchase process, let’s have a look at the different ways of buying in the mobile market.
If you’re used to the consumer side of things, you might think that your options are to go directly to one of the main networks, walk into one of their shops and the salesperson will sort you out with a deal. Even if you don’t go to one of the networks directly, you can head off to Carphone Warehouse and they’ll sort you out.
It works a little differently in the business to business world.
You have two main options:
What is Direct?
Direct is the business equivalent of walking into a shop belonging to one of the main networks. You’ll engage with one of their channels. For a small business that means either Telesales, Online or perhaps a retail store. In each of these channels you’ll have specialists that can offer business to business tariffs and offer advice on the best fit deal for you.
In the case of a direct deal you’ll always be in direct contact with the network.
What is Indirect
The indirect channel is where an intermediary takes on the role of selling and providing customer service to the end customer. The indirect dealer or distributor (read more about Indirect here) has access to the same tariffs and deals as the main networks do and the networks pay the dealers for introducing the customer to the network and for managing the relationship with the customer on an ongoing basis.
Why do these models matter to me?
The strange thing about this model and the way it works in practice is that even for the same network, the network and the dealer can be in competition - in addition to being in competition with other networks.
By knowing that this internal competition exists helps you to find the right supplier for you.
Be realistic about what type of device you can expect based on how valuable you are to the network
An example of how this works
Say you were on EE direct and wanted to stay on EE as you found the data speeds and coverage good. Your initial thought might be that there wasn’t away to get competitive bids in place - you could only go to EE Direct and hope you could negotiate a good deal.
In this case you could instill some competition into this by going to both EE and an EE dealer for a price and have them battle it out for your business.
As EE and EE dealers operate independently of one another they are free to compete. If the dealer thought on looking at your past history that you might be a more profitable customer they could offer you more tech fund or discounts than EE might do direct, therefore driving a better deal for you.