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SmartBeep Turns The Page On Retail Strategy

Paging carrier SmartBeep, which has marketed $1.99/month local numeric service through its own stores for three years, has shifted gears and has begun to actively court retail accounts.

The Chesapeake, Va.-based company is primarily targeting small and large electronics retailers, camera stores, and video stores in about a dozen major markets where it also operates SmartBeep stores, said senior VP Grant Sibley. The company operates 85 stores in those markets and plans to open its first stores in April in San Francisco, bringing its store count to 93.

The markets with SmartBeep stores include Boston, Chicago, Cincinnati, Dallas-Fort Worth, Detroit, the New York City metro area, Phoenix, southern California, southern Virginia, and Washington-Baltimore. To promote service in those markets, SmartBeep runs a steady schedule of network and cable TV ads, Sibley said.

In launching its dealer program, SmartBeep sees opportunities among retailers who haven't sold pagers before and among airtime-reselling retailers who have tired of the customer-service and billing responsibilities involved in "owning" the subscriber, Sibley said.

The dealer program will also appeal to resellers, he said, which have experienced "a profit squeeze over the past 12 months." Analysts have pointed out that some paging carriers are moving away from reselling programs to boost their own margins.

Through its dealer program, SmartBeep offers six hardware/ service packages in which retailers make an up-front margin and no residuals. Dealers make a $30 gross profit on each package priced at suggested retails of $88.83 to $124.83, including a year of local airtime and an activation fee, SmartBeep also offers an airtime-only program for consumers who want to recrystallize their own pager. The airtime-only package costs dealers $23.88 in advance, and their margin comes from a $25 activation charge. SmartBeep will do the recrystallization and pay all shipping fees.

SmartBeep's $1.99/month airtime fee includes 300 pages per month and six months of free voice mail, which costs $1.99/month after that.

True to its advertising slogan, "Don't ask how. Ask how much," Sibley declined to say how the company could offer service to consumers at well below the industry's average monthly airtime rates. All that Sibley would say is that SmartBeep is profitable.

For two years, the company's only retail account was the New Jersey-based 6th Avenue Electronics chain, which sought out SmartBeep and whetted the company's appetite for indirect distribution, said Sibley.

SmartBeep's parent, MAP Mobile, markets answering-service/paging packages direct to businesses such as medical practices, he said. In 1993, MAP bought an existing paging network so it could begin offering its own paging service rather than reselling another carrier's service.

MAP's network is operational in 32 markets, and SmartBeep will gradually roll out company stores and a retail program to all 32, Sibley said without disclosing a timetable.

Although MAP's paging license covers the U.S., the company has no plans for now to initiate service outside of its current 32 markets, he said.

Through retailers, SmartBeep markets numeric service, but through its stores, it also offers word paging.

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