The curious case of Carphone Warehouse customer satisfaction performance

Carphone Warehouse remain a key player in the UK mobile retailing ecosystem, with their seemingly ubiquitous blue stores dotted on high streets across the country.  

This week I walked past their store in London's post-olympics mega mall Westfield Stratford, and was confronted by window displays advertising the "lowest price" on an iPhone 5 at £39 / month over a 24 month contract with a fully subsidised handset.  

Inside the store, in case you missed the window messaging, every service desk terminal in the store had a piece of A4 paper stuck to it repeating the message.

 UK's cheapest iPhone 5 price

UK's cheapest iPhone 5 price

Given that most competing offers from the networks' own stores for iPhone 5's averaged around £46 / month over a 24 month contract, I was intrigued as to what tariff actually came with this deal.

I was intercepted by the store manager, who was only too happy to provide me with the full details of the package. Carphone offer the iPhone 5 on O2 with 900 minutes of voice, unlimited texts and 100MB data. 

The deal is also listed on the Carphone Warehouse website for online purchase.

 iPhone 5 tariff with 100MB of data

iPhone 5 tariff with 100MB of data

After providing me with the tariff details for the offer, the store manager than proceeded to advise me that she didn't recommend this deal, as the tariff only contained 100MB of data which would likely result in me running up large bills due to out of bundle data charges. She advised that one of her colleagues could help me find a different tariff for an iPhone 5 that would better suit my needs.

I can't think of any customer scenarios where it would be appropriate to sell a customer an iPhone on a contract with only 100MB of data. It seems to be a sure-fire recipe for customer dissatisfaction, as the data intensive nature of the iPhone would quickly push a customer over this data limit and into additional charges.

Carphone were pairing the iPhone 5 with an O2 tariff, but if you try and buy the iPhone 5 directly from O2, they won't sell it to you without at least 1GB of data attached to it. O2's cheapest iPhone 5 tariff comes with 1GB of data, a 10x increase on the Carphone Deal.

You might chalk this deal promotion up to one store getting over-excited, but Carphone Warehouse are pushing the deal nationally via full page advertisements in the major weekend papers.

Mobile News reported the move as "Carphone offering iPhone 5 at UK’s lowest price" and carried some interesting quotes from Carphone's Chief Commercial Officer Graham Stapleton:

We know that iPhone owners typically consume more data than those using any other handset. In fact, iOS users average around 400mb of data per month and – as streaming, gaming and browsing on the move become increasingly popular – average smartphone data use is projected to rise to nearly 1GB per user by 2014. That’s why two of our top three deals include the large data limits of 1GB and above.

Active smartphone users should carefully consider whether a tariff with a higher limit is right for them; remembering that a larger limit will accommodate for any increasing appetite for data and avoid any potential additional charges in the future, ultimately saving money.

All this begs the question, why on earth are Carphone heavily promoting an iPhone deal with a 100MB deal when they know is not suitable for iPhone customers?

Which? magazine run an annual survey of customer satisfaction with high street stores, and the Daily Mail have kindly rendered the 2012 results into summary tables.

 UK's best high street retailers

UK's best high street retailers

 UK's worst high street retailers

UK's worst high street retailers

Looking through the list of the worst performers, in the consumer electronics categories there's no real surprise to see PC World, Comet and Currys making this list. All of them have a well earned reputation for offering a poor customer experience, aggressive extended warranty sales and unhelpful and unknowledgeable shop staff.

I can't imagine that any of the retailers on the "best performing" list would promote an offer via national advertisements and store window promotions, only to try and talk customers out of the offer when the customer requested it in store. It's not quite "bait and switch", but it starts to feel that way.

I can't see Carphone's "iPhone 5 UK's Lowest Price" promotion as a proof point of a customer centric organisation. It feels more like the type of marketing that resulted in Currys and PC World lagging the field in retail customer satisfaction.

Yet at Carphone's most recent strategy update to their investor community in June 2012 covering the period to the end of 31 March 2012, Carphone go to great pains to inform their investors that their own tracking of customer satisfaction via a Net Promotor Score (NPS) survey shows customer satisfaction at record highs.

 Carphone's own customer satisfaction tracking

Carphone's own customer satisfaction tracking

This is a disconnect for me. Carphone claim they are seeing their best ever customer satisfaction scores, but their promotional offers feel more cowboy than customer centric.

Regardless of Carphone's own internal customer satisfaction tracking, I'll be keeping a close eye on the Which? survey results going forward to get a bearing on where Carphone really stand in the customer satisfaction pecking order.

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