Verizon now Straight Talk Business Model

As business markets age the level of service needed by the customer changes.  The Cell phone Business Model is continuing to evolve.  These are the three  stages  Educational, Critical Mass, Mass Distribution.



Educational Mode for Verizon

When cell phones first came out you paid $1 a minute and you were one of a select few that could afford one.   They were expensive to use and no body understood how to use them.  They had lots of little extra things that we did not understand.  The Cell phone companies hired sales people to go out into the business world and Educate potential users.  Only the wealthy or busineses could afford them but they created the demand for everyone to want one.

The cell compaines rented high traffic retail locations and had a lot of salespeople on commision to sell.  They paid good commisions to salesman if he could get someone to sign a $100 a month contract.  They sold to the early adopters.  This has changed.  The Cell phone companies give very small commisions now compared to what they used to give and the quality of cell phone salesman has dropped.  Most of them now are just clerks trained to help people with phones.

Critical Mass for the Cell Phone Business Model

As the Cell phone became mainstream it now became important for Verizon to become one of the top players.  They had to reach critical mass.  They bought several smaller companies and have become one of the largest Cell phone providers in the country.  Their phones are selling because they are the dominant player in the market and they give free calling to other people on their network.  They have a lot of customer service issues that are mainly phone owner errors.  Most people will not accept that they dropped their cell phone in the toilet and they need to buy a new one.  They want it warrantied.

Mass Distribution gives Straight Talk the Lowest Cost Business Model

Verizon has repackaged their product (which is cell phone useage) and will sell it as Straight Talk Prepaid through the lowest cost outlet available– Walmart.  Verizon just started selling their cell service through 2,000 Walmarts only and online at Straight Talk Prepaid Website.  In time they will eliminate or at least cut back on their very expensive Verizon retail business model that has gotten them to this point.

This is the same path that computers took.  In the computer industry it bankrupted a lot of companies that could not adapt to the changing business model.  The margin the company has to work with keeps getting smaller as the business becomes more of a commodity business.  The company that continually adapts to the lowest cost business model will stay in business and thrive.

Straight Talk Flat Rate Service

This is the future of Verizon and Straight Talk.  They will have the largest cell phone tower network and they will be the largest provider of cell phones in the US.  They will have the lowest cost of distribution with the Walmart, Tracfone, Verizon partnership that is called Straight Talk.  If At&T does not adopt a similar strategy they will be left in the dust.  The lowest cost producer almost always comes to dominate a commodity market.   Cell phone usage has become a commodity.

Current Verizon Sales Associates

My recommendation if you are Verizon Sales Associate.  Become an expert in another field and move on.  Over the next five years the normal cell phone retail business will shrink because of Straight Talk, and Verizon attempting to move their customer service to the web.  If you are a Verizon authorized business partner I would recommend you find another business.

Unlimited Talk and Text Nationwide for only $45 a month from Straight Talk.

The $30 a month 1000 minute/1000 text plan is also a great value from Straight Talk.

The Computer Business Model

When Computers were first introduced you bought one from a computer store that had geeks working there that loaded your software and taught you how to turn it on.  These stores had pretty good markup and some of them made a lot of money.  As computers became mainstream they started selling them at big chain stores that lowered the margins.  We have seen the exact same business model migration with computers as we are now seeing with Cell phone minutes/service.

Here is a good video about the Straight Talk Samsung R451c

This phone is available for $100  Straight Talk.com It will be bundled  with either the $30 1000 monthly minutes card or the $45 Unlimited Minutes, Texts and Data card for $130 or $145.

Check out the Straight Talk Motorola Razr V3 Prepaid Phone

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