“Welcome to the XYZ trade-in solution. Please enter your IMEI. Actually, please also answer the next 12 questions over 4 pages and then we’ll mail you a rebate based on our own secret triage criteria. You have 3 days to change your mind but you can’t get your phone back once you mail it in so you can’t really change your mind anyway. Thanks for your business, we hope to take your money soon again”.
I’m sure you guessed it by now, this isn’t an actual trade-in message. Except for that last comment though, even large trade-in programs still often do/ask one or more of these. Why do consumers put up with such poor experience? More importantly, can we build a trade-in program with better user interface / user experience (UI/UX)?
When designing a program, it can be tempting to take the company’s perspective and select the most efficient or simpler solution. Today, many offers in the market still ask consumers to enter such information as an IMEI or even the internal device number. What’s an IMEI you ask? Is your phone an A1661 or an SM-G950U? My point, exactly: the company is asking you about obscure pieces of information because it makes their life easier, not yours.
As we discussed in a previous article, most Trade-In (TI) programs today are designed to drive new device sales. Other objectives include access to cheaper phones for insurance programs and increased customer life value (CLV) via longer life or higher average spend. What all these programs have in common is a need to drive attach rate. The more consumers decide to return their phones and buy a new one, the more effective the program. Yet too often, we still see solutions that simplify the company’s processes / reduce its risk at the cost of a negative consumer experience.
Today, I want to review some of these decisions and propose alternative solutions. They may be a little more complex to implement but would reduce friction, drive attach rate and improve consumer experience. The best TI programs already offer most or all these features by the way:
• Program navigation
Early on, filling out the application of an online TI program often meant answering at least a dozen questions across multiple pages. Today, the best user interfaces limit the number of questions to just one page. I am not a fan of drop down lists on websites, but check out the current Samsung solution! 3 questions in total: Brand, Device, Meets requirements. That’s it!
PS: No, I cannot take any credit for this UI/UX since it was designed after I left the team, and comes from a different group anyway. Yes, Apple’s solution also has the same number of questions but it does require me to move the page up and down a little more. Besides, I am the one writing the article so I get to choose the examples, so… yeah, sorry.
This stands for International Mobile Equipment Identity, not that anyone should need to know. This number is unique to your phone, much like a car’s VIN number. The difference is, cellphone networks and carriers have access to it in real time. Historically, most TI programs used to require the IMEI to help prevent fraud or confirm it wasn’t stolen. A problem of course is consumers usually do not even know what an IMEI is, let alone how to find it. Requiring this information causes significant friction and leads to lower attach rate. Shoppers with limited tech savvy will often decide to not return their old device, or even take their business elsewhere. A better user experience is to rely instead on good triage processes and offer to return the device if needed. We’ll discuss this feature a little later again
• Device condition, including water damage or FCC compliance.
Every TI program asks questions such as whether it powers on and is fully functional. These are easy Yes’ / ‘No’. questions, designed to assess the general condition. More complex are answers to questions such as “does the device have water damage” or even “is it FCC compliant”. Again, the role of these questions is to reduce the company’s risk. A phone with water damage has low resale value, and a phone without an FCC stamp should theoretically not even be in use in the US. You don’t truly need these questions though. Best practice today is for TI programs to keep things simple and model a little bit of loss.
Most new flagship devices since 2016 have been IP68, which means they are water and dust resistant. Water damage still occurs from time to time, but not nearly as often as a few years ago. A simple cost/benefit analysis will show it is better to take a chance on the phone and not risk alienating the 99+% of consumers whose phones are fine.
The FCC question is a bit trickier to answer, and many consumers truly do not know. Here again though, financial risk is low. The international secondary market for used products is highly developed. There is a large global demand for these products, and prices are often higher abroad than in the US, FCC compliance or not. Most products are already CE-compliant already but the same answer would apply in Europe by the way.
– Triage discrepancy
Early solutions often didn’t offer an easy way for consumers to contest a triage decision. For example, the TI partner decided the camera lens was broken but you felt the phone was in great condition. Some IT programs started sharing pictures of the broken device a few years ago. Today, the best programs systematically share both photos and high quality videos. They also allow the consumer to get the product back in case of disagreement on the value assessed. Sharing a video and allowing to return a product is simple in theory and the right thing to do for the consumer.
These features are complex to develop and demand a strong operational capability. Triaging process was already a highly competitive activity, so significant process improvements and productivity gains were required to pay for them. Still, videos and returns are critical to reduce customer dissatisfaction. Indeed, they are pretty much table stakes from the consumer’s perspective today.
• Instant credit
Last topic for today, I promise. This is the riskiest feature to implement for online TI programs, yet also the most powerful. Let’s run through an example to understand:
1. First, the consumer purchases a phone online, and self-enters a current device condition.
2. Second, the program calculates a trade-in value, and removes that amount from the price of the new product purchased.
3. Third, the buyer receives a new product, transfers data, and returns the old device via mail.
This is risky from the company’s perspective: consumers feel an incentive to answer their product quality is high, and fraudsters expect to not even return anything. To protect themselves, most programs wait until a product is received and triaged before giving a credit. Others offer an “instant credit” paid out over 24 months. This way, the company doesn’t open itself up for a large loss if the product it receives isn’t in the expected condition or if no product is ever shipped.
Today, I want to argue for a friendlier solution. At Samsung, we made the scary decision to always give a full expected trade-in value as an instant credit. The consumer gets the benefit of the doubt, and deducts this credit from the purchase price before even returning the old product. Shoppers love the peace of mind and lower out-of-pocket expense. Benefits to the company include higher traffic and attach rate. Even better, we noticed upsell: consumers feel the new device is cheaper, and splurge on a higher memory solution for example. Yes, there are downsides. Fancy receiving a rock in the box instead of a real phone? If you want to fraud, at least please ship an empty box so we don’t have to pay for shipping!
To protect the company, we did place a financial hold on the consumer’s credit card. This only went so far however since timing (holds are only valid for a few days) and outright fraud caused our early losses to remain high. Eventually, we purchased better fraud software and refined our analytics. Net-net, the outcome was positive thanks to higher attach rate and incremental sales. I would strongly urge you to consider instant gratification.
If this is too radical though, another option is to dissociate the return from the credit. Today, Verizon and Amazon offer a gift-card for example. This becomes more of a buy-back solution as we’ll discuss below in the ‘mix & match’ section. Consumer experience is good too, even if trade-in values offered are lower than they could be. One internal consideration before you go that route though: the internal group investing in the TI program may not be the one getting incremental sales – cf. internal budget & politics.
Back to our initial question then, what do consumers want? How to create a “good” trade-in user interface? Surprisingly perhaps, “as many features as possible” is not the right answer. There is no one-size-fits-all solution, and you need to cater to your various stakeholders. The former software developer and program manager in me would also caution against a big bang approach. Implementing everything at once is difficult, stressful, and often does not work. Instead, I suggest bringing a minimum viable product (MVP) to market, then layering on enhancements as they become ready. A strong development roadmap will help. Let me write it one more time though: keeping your consumers in mind is just non-negotiable anymore.
A little lost, have some questions? Let’s discuss and see if I can help you navigate these key decisions.