Case Study: Accessory & Inventory Management

TESSCO Helps Premier Cingular Dealer Achieve Award-Winning Results

Strategic, tailored solutions from TESSCO enable Spring Com­mu­ni­cations to expand its business and become a leading Cingular Wireless dealer.

Background

Spring Communications, a privately held corporation, was founded in Utah in April 2001 by a savvy, local entrepreneur – and has experienced dramatic success ever since. In five years, the Company has grown from six locations to more than 80 in the Intermountain Region of Utah and Colorado, with sound strategies in place to continue this pattern of exponential success and to have more than 100 retail locations in the very near future.

Today, Spring offers consumers and businesses the most advanced mobile communications services available, including voice, SMS, and high-speed wireless data services. And as a premier Cingular dealer, Spring offers the largest mobile-to-mobile calling community with over 54 million customers. 

Challenge

At its inception, Spring Communications enjoyed success by delivering on its commitment to provide customers with a dependable network, premium products and attractive service plans. Concurrently, the company was cognizant that to prevail in a crowded and competitive wireless marketplace, strategies would need to be implemented to forecast those applications and technologies customers would find most essential.

With new products and services introduced everyday, the wireless industry was becoming increasingly complex – particularly for smaller business owners in the face of larger opposition.

Methodology

With competition in the wireless industry intensifying, Spring recognized that to provide the utmost value to its customers, the Company would also need to offer the best accessories available on the market to complement and correlate with its goal to provide national wireless coverage and premier local customer service.

In order to ensure that Spring customers could purchase the appropriate ancillary products for their wireless equipment, while efficiently managing the inventory and ordering process for their retail operations, Spring partnered with TESSCO in September 2004 to maximize accessory sales and streamline their point-of-sale infrastructure.

“As a fast-paced organization with a lean management team, it was critical for Spring Communications to choose a trusted, strategic provider with whom we could expand our diverse customer base and improve customer satisfaction by increasing operational efficiencies, as well as offering better breadth and depth of accessory offerings,” explains Jason Ellis, Spring’s president and chief executive officer.

Unlike other distributors of wireless products and services that Spring considered for a partnership, TESSCO took a more holistic, value-added approach by not only focusing initial efforts on revamping existing accessory activity, but also developing programs to combat discrepancies between the availability of mobile device offerings and the number of accessories that should be in place to complement them. As such, TESSCO initiated a system by which Spring’s inventory levels could be better controlled, managed and anticipated.

As a Total Source supplier to the wireless industry, TESSCO is positioned as The Vital Link® to Retailers such as Spring that require a single source provider that has the unique ability to match customer and manufacturer needs with both Product + Supply Chain Solutions – when and where they need them most. As a result, TESSCO was able to provide Spring with must-have products from original equipment manufacturers (OEM) for the first time – leveraging the Company’s ability to offer those reliable products and services that ultimately helped ensure the best possible wireless experience for customers. At present, OEM products account for 8% of Spring’s overall accessory product collection – creating a more robust, functional and diverse selection for discerning customers.

By adopting strategies planned by the TESSCO and Spring teams and then collectively implementing them, Spring was poised to offer customers reliable products and services, backed by a robust retail growth plan. Under TESSCO’s guidance, Spring gained a new and comprehensive understanding of the dynamics of the wireless industry and created an action plan based on specific solutions that TESSCO tailored and customized to meet their needs.

After joining the company in April 2001, Jason Ellis sought to build a solid management team and efficient operational infrastructure, and while Spring’s revenue was growing by 100% each fiscal year under his direction, Ellis sought TESSCO’s expertise to help Spring sustain this growth, particularly during challenging retail economic conditions. Ellis’ team and the dedicated representatives from TESSCO therefore implemented an impressive inventory management system that helped: (1) Determine the inventory needs in unique Spring locations; (2) Organize store locations; (3) Simplify the procurement process; and (4) Reduce costs and obsolete inventory.

Results

Streamlining the inventory process resulted in immediate and measurable results for Spring, such as an increase in efficiency across the business that enabled employees to spend more time consulting and selling, and less time on accessory management activity. And with a better understanding of the customer mindset and offering them world-class mobile devices and the accessories needed to complement them, TESSCO helped Spring differentiate themselves from competitors by staying ahead of the advancements in the wireless industry, as well as meeting and often exceeding the growing expectations of demanding customers through the promotion of high-quality, yet affordable products.

Within the Spring organization, encouraging, conclusive changes were becoming evident through the streamlining of business processes. TESSCO’s wireless accessories and merchandising solutions were having an enduring impact, enabling Spring to experience benefits ranging from enhanced employee performance and productivity, reduced inventory management expenses, increased revenue, and greater customer loyalty and satisfaction.

Award-winning results include:

• With 100% of Spring’s accessory business provided by TESSCO, Spring is able to increase operational efficiencies and profits by committing to one, total source provider rather than relying on several distributors.
• Attachment rates have increased from .75 to a 2:1 ratio; and for every activation opportunity, Spring currently sells an average of $53 in accessories such as batteries, vehicle power adapters, hands-free components, carrying solutions, travel chargers, and other products unique to Spring.
• Improved inventory management allows Spring to better understand customer purchasing habits, anticipate needs, and ensure that the products they want to buy are available when and how they need them – thus providing excellent customer support and experience.
• Streamlined ordering and delivery processes, and improved productivity in the areas of scheduling, product placement, shelving, stocking and information access.
• Spring maintains a competitive advantage by providing superior customer support and experience at the time of both sell and cross-sell.
• Increased ability to attract and retain customers – by having the tools and resources to satisfy customers before, during, and after the sale.
• The company continues to see growth every year and operates a Business-to-Business division, service and repair center, and customer care center in order to best assist its customers with premier wireless service. 
• Spring ranked No. 349 on the 2006 Inc. Magazine’s “500 list,” with a three-year sales growth of 394.1 percent – representing one of “the most innovative, dynamic, fast-growth companies in the nation.” 
• President and CEO Jason Ellis was deemed one of Utah’s 40 most impressive young business leaders under 40 by Utah Business Magazine in 2006 – for his ability to build the Spring business.
• Spring was recently recognized as one of Utah’s Top 15 “Emerging Elite” companies and has been a “Best of State” honoree in Consumer Electronics and/or Telecommunications Resellers in 2003, 2004 and 2005, and named Cingular Wireless’ “Best in the West.”
• Spring received honors from T-Mobile for the “Top Contract Extensions Performance” and the “Top Prepaid Performance” in 2005.
• The Company has earned approximately 10% market share for the wireless industry – an impressive accomplishment for a dealer that competes against national providers in an ever-growing marketplace.

Jason Ellis, concludes, “Spring has been fortunate to collaborate with TESSCO, a leading expert and 25-year wireless industry veteran, and Cingular Wireless, the nation’s largest wireless carrier – collectively, we are providing reliable national wireless coverage, premier local customer service and essential wireless products to an ever-evolving world.”