By Dave Dorwart - dPi Teleconnect

Independent research has confirmed that customers both want and need to know if obtaining service through your rental store is an alternative.

From the September How 2 issue of RTO Magazine

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Despite ten years’ worth of deregulation within the $300 billion telecommunications industry, 96% of consumers still use the local phone company to provide their home telephone service. So what is to account for the slow (but growing) penetration of third-party carriers? It could be as simple as consumers not knowing they have an alternative when their phone service is shut off.

Independent research has confirmed that customers both want and need to know if obtaining service through your rental store is an alternative. And while we all realize home phone service is a necessity and not a luxury, new research is shedding light on exactly how critical home telephone service is to our customers’ daily lives.

A recent study has shown that 85% of customers, when faced with an income crunch, consider maintaining home telephone service the second-highest priority for their family. The first priority, with 89% of consumers’ votes, was maintaining power. That study gives home telephone access precedence over several other services including cellular and even cable or satellite television.

When a family has school-aged or younger children living at home, a “reliable” home telephone number – and not a cellular number – is the contact method of choice when maintaining communication with schools and physicians. 85% of parents provide their family doctor with a home telephone number as the main contact method and 80% provide their home telephone number as the emergency contact method for their children’s schools.

But the most surprising statistic, as recently quoted by The Wall Street Journal, is that 21 million households within the United States still use a dial-up internet connection. That means home telephone service provides the only method of internet access for millions of rental customers and their families. In fact, the four largest phone and cable operators – AT&T, Verizon Communications, Comcast, and Time Warner Cable – have seen a significant deceleration in the amount of consumers signing on for their high-cost, high-speed broadband internet connections. And the trend is expected to continue. Industry watchers suggest that the broadband market is maturing and predict that the U.S. will remain well behind other countries in broadband penetration. Currently, our country is ranked a dismal 25th with just 50% household penetration behind such nations as South Korea (89%); Macau (69%); and Canada (63%).

So why is internet access critical for credit-constrained customers? Most say it is their method of choice for finding jobs, staying connected to friends and family via email, and it also provides their children with an opportunity to do their homework online.

Now that you know exactly how critical home telephone service is to your customers, ask yourself this question: Do you know which local carrier(s) provides your customers’ home phone service? If you don’t, you should.

Rental stores whose employees consistently communicate their home phone service offerings can, without difficulty, sign up a minimum of 10% of active customers as home telephone customers. That figure is often easily matched by walk-in telephone service-only customers.

In a store with 350 customers, those 70 home phone service agreements equate to bottom-line profit of $500 per month or $6,000 per year – per store. Not to mention the fact that a rental store can expect to achieve between a 10% and 50% conversion rate of walk-in home phone service customers. That means a strong percentage of people who come in just for home phone service will walk out having rented one or more products from your store.

Consistently offering home phone service can positively affect your store profit in less obvious ways, as well. It’s currently estimated that 35% of agreements on rent do not contain a home phone number. This lack of a direct line of communication wreaks havoc with the collection process. Home phone service isn’t just important for your customers. It is also in your best interest to offer reliable home telephone service to every customer who walks through your doors. Wouldn’t you rather pick up the phone and discuss an account with a past-due customer rather than have to pick up your merchandise?

While the rental-purchase industry is estimated to generate a healthy $6 billion per year, consider how it is dwarfed by the $100 billion home telephone industry and the separate $200 billion long distance industry (and that is yet another opportunity!). By offering and consistently selling home telephone service to your rental customers you are tapping into a market that is much larger than what is available to you through the rental-purchase industry alone.

Opportunity is calling. All you need to do is pick up the phone.