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When a market is virtually saturated with the same type of business, it takes either real belief or blind stupidity to set up another business offering similar products and services. And when senior industry executives also suggest it could be a real struggle, maybe it’s time to question the decision to proceed.
But the guys heading up Frequency Telecom are determined people. They
believed that whilst the market back in 2002 was extremely competitive, for a well set up and organised business, the potential was still very positive. It’s this quality that has seen Frequency Telecom continue to grow and thrive in an industry sector that is littered with casualties.
Strong, profitable trading
Frequency’s founders Gareth Limpenny and John Whitlock, along with finance director Andrew Cain have worked in the industry for some years and the lessons they learned helped them create a solid, prudently run company that manages change and looks externally at their business.
Now six years on, Frequency Telecom is well established with a good business proposition and a diverse customer base. The company has an impressive turnover around the £24million mark and ends its trading year in June with another strong, profitable trading.
Wisely recognising that the world keeps turning, Frequency is building for the future with a recent move to larger premises, new personnel, serious investment in training and a wider range of products and services. As keen as the company is to keep growing, industry experience of some of the difficulties the sector faces ensures the growth strategy is planned in close detail.
Frequency MD Limpenny comments, ‘We’ve worked hard at Frequency to ensure our core business is efficient and profitable and has a good reputation. We’ve built the company on a low cost platform so we can adapt better than others as business levels fluctuate. We’re also very strict in ensuring any new initiatives we bring in must be able to justify themselves in both revenue and relevance.’
and improve our service in a number of ways in the next few months with a real focus on
online communications, where we are about to launch some exciting new initiatives
People make it work
The business model in all Frequency companies and that includes the handset trading side, the Accessories division and the B2B operation Jelly Communications, focuses on the abilities of the people. Employees have to be committed, determined and resilient to be able to cope not only with the vagaries of a dynamic market, but to also withstand the sardonic humour that is part of the company’s culture. The banter that flies around the sales and purchasing areas does not discriminate and only the quick and strong survive. However the single digit staff turnover percentage indicates that Frequency has a pretty content and stable workforce and high levels of response from recruitment campaigns indicate there are many who are keen to join.
It is in sales and purchasing where Frequency believes it has an edge. ‘Much of what we do is built on relationship’, says Purchasing Director Whitlock. ‘We recognise that in terms of proposition, we don’t differentiate a lot from our competitors. But instead of expending energy managing complex and expensive incentive schemes or sales programmes that are difficult to measure, our teams work with their customers and suppliers to understand what their businesses are looking for then we provide the product and support accordingly. The bottom line is that we build up trust and loyalty and we all make money.’
Looking to the future
So what do the boys from Chessington think the future holds? ‘It’s clear that the independent dealer market is contracting and the large retailers are taking a greater share and there will be further casualties in the sector.’ says Limpenny. ‘Frequency is financially strong with no borrowing so we’re very confident about our own future. We feel our trade partners will want to buy less more often and want their goods delivered faster than ever, which we’re geared to do. Our recent move means we can comfortably manage both large and small accounts. We also feel that our customers will be looking for products and services that can provide additional, incremental revenues and we feel that mobile accessories is one of those areas that can really provide that. We are bringing in ranges of exciting, new products all the time that are ideal for this and we will be aggressively marketing this now.’
‘The other area for growth that we’re actively looking at is acquisition. There are some good businesses in our sector that compliment our range of services. With the support of a well organised business, they could be very successful. We’re currently looking at a few very good opportunities and hope to be able to announce new developments in the very near future. Interestingly, we have ourselves been approached by acquisitive organisations but frankly, the timing was not right. ’
We’re genuinely excited with our plans for the future. We can’t control what is going to happen
to the market and we cannot let that uncertainty stop us from planning and implementing our
strategy, providing we can flex to enjoy the highs and ride out the lows
Whitlock adds ‘Whilst we’re keen to grow, we will remain loyal to our traditional channels. Our goal is to adapt and improve our service in a number of ways in the next few months with a real focus on online communications, where we are about to launch some exciting new initiatives. We’re also looking at other channels where our type of operation can provide low cost, high volume, efficient business and we are working on a number of projects that will extend our expertise in slightly different directions.’
Handset trading will continue to be a key focus for Frequency and the impetus is currently with data products. Whitlock sees that the market is segmenting more than ever based on customer profile. ‘We’re enjoying buoyant sales of all handsets, particularly from our customers who are supplying the SME sectors, with data handsets and media phones being particularly popular. Part of our service is to discuss and review these trends with our customers which helps them sharpen their stocking patterns.’
Jelly keeps moving
Frequency’s own B2B company Jelly Communications is also performing at a high level with turnover doubling year on year. It too has a similar customer focussed strategy that helps it to win and secure the business. Jelly uses a bold marketing platform that works across all media with highly visible communications that raise awareness and stimulate response. The success of this strategy was recently demonstrated by Jelly winning the Marketing category in the 2008 South London Business Awards.
Jelly began trading in 2005 and now has over 400 customers, a number of which are large corporates. BlackBerry and mobile broadband are currently very popular and mobile accessories are generating good incremental revenue. For the future, Jelly is looking to move more into converged technologies and to utilise its winning formula to continue its impressive growth. Continued investment in people and training, along with stronger partner relationships will see Jelly become stronger and even more successful.
Enjoy the highs and ride the lows All markets see their share of winners and losers and even when business in general gets more difficult, there will always be companies that continue to drive forward. Those companies are the ones that have a clear understanding of their strengths with realistic, and achievable goals for the future. Frequency Telecom has proved it can survive in a challenging market and believes that it can continue to grow with the steady development of its solid proposition.
Limpenny sums it up, ‘We’re genuinely excited with our plans for the future. We can’t control what is going to happen to the market and we cannot let that uncertainty stop us from planning and implementing our strategy, providing we can flex to enjoy the highs and ride out the lows. We are keen to raise the profile and perception of all Frequency companies. We’re no longer the new kids on the block and we are confident we have a lot more to offer.
We’ve learned such a lot over the last six years and if we cannot use that to our advantage in the next six years then we don’t deserve to succeed. And to be honest, we’re not even prepared to consider that.’