Two accountants and a lawyer are not usually the most promising start to a story, but this one involves a lurid parrot that squawks "Bollocks", Tourette’s-like, and the £78m collapse of a British high-street stalwart.
Former Phones4u executives John Whittle, John Morris and Steven Lloyd have banded together to form a mobile venture called Unshackled.com with funding from Phones4u founder John Caudwell. This time, they promise, things will be different.
Unshackled is an online-only mobile retailer that offers split contracts, separating the purchase of a phone from that of a tariff. It claims to offer better value for money because, unlike Phones4u or Carphone Warehouse, it is independent of the mobile operators. (Vodafone and EE were blamed by Phones4u’s owners for the business’ demise in 2014.)
Unshackled is upfront about the fact that it is effectively loaning money to consumers when they buy a handset. The start-up is working with banking partners such as Zopa to help customers finance their handset purchase for the best value. It then pairs customers with a suitable SIM-only deal. It takes a cut from each part of the split tariff in what the start-up claims is a sustainable revenue model for the long term.
14 million new contracts are signed in the UK every year, which gives some idea of the opportunity
The service competes directly with Carphone Warehouse but, its founders say, is not incentivised to push particular manufacturers or operators, and doesn’t need to fund an extensive retail network. And unlike the usual 24-month lock-in, Unshackled will actively encourage consumers to switch contracts midway if it works out cheaper.
"We have 15 years in the mobile industry and we’re aware it’s not serving customers in the way it should," Whittle, Unshackled’s chief executive, told Campaign. "Our mission is to change the way people buy their phones, fundamentally."
The venture is funded by the three co-founders and Caudwell for an undisclosed amount.
At the moment, Whittle says, most consumers are "ripped off" by 24-month contracts. His comments are supported by recent advice from Citizens Advice, which found that phone shops tend to recommend pricier tariffs than necessary, meaning consumers often fork out hundreds of pounds extra per year.
The trouble is educating consumers on the finer points of the market. Though many British consumers are inseparable from their phones, they are resigned to paying about £800 over two years for a £500 handset.
This is where the start-up’s unusual partnership with Manchester agency Love comes into play. Love chief executive Trevor Cairns – another Phones4u alumnus – is moonlighting as Unshackled’s marketing director in exchange for equity in the start-up.
He and his agency have come up with an in-your-face strategy to jolt consumers out of their inertia, giving the brand a Sex Pistols-inspired aesthetic and conceiving a lurid parrot to act as a consumer champion.
One online film shows a pallid salesman in a Carphone Warehouse-esque store called "Phoney Shop". As he tries to push a customer to sign a contract "here, here, here and here, in triplicate", the parrot appears, stuffs the paperwork into the salesman’s face and croaks "Bollocks".
For Cairns, dropping agency fees in exchange for equity is better than wasting time on pitches. Unshackled’s team is also located close to the agency’s offices.
"The efficiency of this model is better for both client and agency," he says. "Agencies are usually anything but a creative partner."
In short, there’s trust. "In the traditional model, there’s lots of deck riding, justification and stakeholder management, whereas this has been very lean and there’s trust on both sides," he adds.
Love is keeping its marketing efforts digitally focused for now, targeting 20- to 35-year-olds, though Whittle sees the audience expanding. He refused to give targets for the business, but pointed out that 14 million new contracts are signed in the UK every year, which gives some idea of the opportunity.
Although Cairns is unlikely to keep his role permanently, he sees Love as being involved with Unshackled for the "long term".
The marketplace very much looks to service itself rather than the consumer
And how long before Unshackled shackles up to a bigger player? The rest of the mobile market is consolidating, rather than expanding, after BT bought EE and buyers are circling O2 following Europe’s rejection of a takeover by Hutchison Whampoa.
"This is not a short-term venture – we’re looking to build a business that is successful and sustainable over the longer term," Whittle says. "Selling out in the short term means we wouldn’t necessarily feel like we were achieving our objectives.
"We are here to put consumers back in control of mobile – that’s very much our ambition."
To that end, Whittle says he supports the European Commission’s rejection of the O2 deal.
"The marketplace very much looks to service itself rather than the consumer, and anything that is only going to exacerbate that self-interest is against what we’re trying to do," he says.
"There are 15 networks and four physical [network] infrastructures. Many of those other 11 are more competitively priced than the four, and we will actively promote them because competition is a good thing."