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How to structure a trade-in program that meets the users’ needs (+ 3 Examples)
A trade-in program wins when it is fast, clear, and fair. Here is how to design the journey around what users actually want.
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Trade-in is a great way for retaining customers but not every trade-in program is created equal. You need to incorporate a few key features to set yourself apart from the pack, aiming to not only satisfy your users’ needs but also convince them that your solution is the best. Here’s how to ensure that:
1. Make it easy and convenient
A trade-in program should be as simple as a 1-2-3 process. If you add unnecessary steps into the user’s journey, people will get frustrated and give up on it. Can you make it as simple as the user bringing their device and getting an offer in a few minutes?
Here’s an example from our team: The way we did that in Pandas was to create a network of entry points for our customers, streamlining the entire process down to every detail. Firstly, rather than offering trade-in options only in-store, we also expanded our services to include online buybacks and various drop-off options. Secondly, we structured our warehouse to allow fast device grading, without issues or delays. Additionally, right at the beginning of the process, we collect all necessary information about each device (such as maker, model, color, storage, IMEI numbers etc) automatically or with very minimal input from the user.
2. Go quick, quick, quick!
Time is your biggest enemy. Don’t make users wait weeks before their smartphone trade-in is completed. Most programs out there have a 3-week lag time between when a person trades in their device and when they receive payment for it. The reason? There is usually a lack of coordination between the warehouse and each store evaluating the devices, leading to constant back and forths, therefore extending the whole process. One way to approach this is first and foremost with how you build your product and your internal teams. Can technology replace time-consuming, manual parts in the evaluation? Go ahead!
Here’s another example of what we did. Pandas followed this approach: our customers can visit a dedicated web app we have built that takes them through a series of quick tests and gamified checks to assess all of their smartphone’s components. In less than five minutes, they are given a specific price quote and all they need to do is drop off their device at one of our autonomous kiosks or in-store. Already, this route has allowed us to evaluate remotely any device, get very specific information about its condition and provide our customers with an offer before they even have to leave their houses.
3. Be as accurate as possible
Fast and easy are good, but being able to correctly assess and grade a device is the lifeblood of this business. Use technology that automates the process and it’s laborless (as much as possible). Technological efficiencies reduce your cost per device graded making a visible difference in your bottom line.
Bonus tip from our experience: make the whole grading process completely transparent by showcasing users what you are checking and what is happening with their device in every step of the way. This increases confidence, which makes it less likely that they will dispute any of your decisions about its condition or acceptability for trade-in.
4. Have you got the right pricing?
This can get very complex very quickly. What is your ideal strategy (for the 1,000+ different trade-in models) that is both competitive as well as allowing you to offer fair prices to your customers? A safe way to approach this is by using technology that offers an algorithmic, data-driven approach. In other words, the price you give to your customer should combine historical data about the device’s price quotes as well as regularly cross-check it weekly with the demand it has on the market. If you take into account all this information, in the long term, you will manage to reduce your cost per device graded.
Furthermore, the most important attribute you need to consider when shaping your pricing strategy is your customer’s lifetime value. The fairer your pricing strategy is, the higher your retention rate. Users are more likely to choose your program again for trading in their next device or recommend it to their friends. Your business outlook will then be more viable with customers who are loyal to your brand.
