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Paying for Services You Don’t Need

How Much Are You Throwing Away Monthly?

Carrier bills are littered with forgotten or unused features. Since a carrier doesn’t know if a feature is no longer needed, they are happy to include the cost on every monthly invoice and, because feature charges are recurring, it doesn’t take long for the wasted spending to add up. When your company lacks a way to track or identify unused features, they will continue to bill unnoticed. Since the benchmark of successful mobility management is to compare previous month spending, if an invoice is consistent with previous month billings it is often deemed adequate. An uptick in billings will draw immediate attention but stable spending becomes a false assurance that spending is under control.

There are two categories of feature expense deserving of attention. First are the usage-based features which include messaging, data, and international. Because overage charges can be painful, there is a tendency to overshoot on the feature tier selected. Rarely do companies have effective procedures to monitor these devices as usage drops below their peak. They are often sized based on peak usage months and as long as peak usage is a recurring event the strategy may work. However, some percentage of devices will return to a lower usage rate or even stop using features as the carrier invoice continues to bill at an elevated feature level and cost.

The second category includes features for which there is no usage tracking such as insurance, smartphone apps and navigation. There are also other monthly recurring services lurking where an employee may intentionally or unintentionally register by responding to a solicitation or download a monthly recurring app like ‘Daily Horoscope’. We usually recommend against carrier insurance because it is most often more cost-effective to self-insure.

Monitoring Usage-Based Features – invoices excel at letting us know when feature levels are too low by charging overage penalties but go silent when it comes to under use. Because messaging has become a more valuable business tool, most companies include messaging across the board. While this is simple to implement, it can result in unneeded monthly expense. If 10% of your employees are not utilizing messaging but paying an average of $10/month, charges can add up. For a company with 2000 cell phones that translates into $2000/month or $24,000/year in unneeded carrier expense. However, we caution against dropping a messaging feature without several months of contiguous usage data (indicating a pattern of non-use). Mobility Managed Solutions (MMS) are oriented to monitor monthly usage and track trends over time to permit easier decision making around removing or reducing features to lower carrier costs.

Non Usage-Based Features – the most frequently identified savings opportunity here comes from insurance charges. For families or small companies with a limited number of wireless devices, insurance can be cost effective because there isn’t a large base over which you can spread the risk. One company with 150 devices was paying over $400/month in insurance fees. Most insurance programs come with a deductible and while this can reduce the sting of paying retail for a lost device, it also can add up over time. In this scenario the company is paying nearly $5,000 a year to manage risk. To break even on this proposition, they would need to replace 8%-10% of their devices annually – a number higher than the industry averages. A more cost effective solution would be to self-insure, particularly when making use of buddy upgrades or recycling used assets as a way to avoid paying full replacement cost when there is a need for a non-warranty replacement.

Monitoring unneeded features can reduce the slow trickle of payments you shouldn’t be making. While there are other saving initiatives that contribute a higher level of savings (see our previous tips on these topics), paying for things that you don’t need can present a proportionately higher degree of angst. We find that a careful process of identifying and terminating unneeded features can reduce your invoice 1-2%. For companies with 1,000 mobile devices and an annual carrier cost of $800K, the savings for unused features could be as much as $8,000.