Although they believe the future growth of the paging industry lies in advanced messaging, paging carriers continue to search out new ways to attract customers to traditional paging services as the one-way market becomes increasingly saturated.
Analysts say distribution is the key to this effort. The ability to reach new customers in creative ways will set carriers apart.
“A lot of carriers are looking at their distribution now,” said Darryl Sterling, wireless analyst at the Yankee Group. “Paging penetration is at 20 percent. The low-hanging fruit is gone and now they’re grinding to get customers … They are trying to drive demand by putting more people on the street selling it.”
One carrier making a big effort in this area is Metrocall Inc., which introduced several new programs in June aimed at broadening its distribution focus. According to Mike Scanlon, Metrocall senior vice president of sales and marketing, the goal is diversity-to have as many distribution channels as possible operating independently from the other.
“The different channels of distribution are like horses on a merry-go-round,” he said. “They go up and down. Even though some are up and some are down, overall, they are making progress and continuing to go forward.”
Metrocall boasts 14 separate tiers of distribution, Scanlon said. On the direct side, distribution channels include the company’s retail stores, strategic partnerships, telesales, Internet sales and database marketing units. On the indirect side, there are third-party retail sales, affiliate programs, catalog partnerships and traditional resale, among other channels.
“Each channel has been given the mandate to go out there and find new ways to market pagers to their demographic. It’s almost a constant process,” Scanlon said. “The more broad-based your channels of distribution are, the more secure you are if one were to have a problem. You have 13 others to pick up the slack.”
Last month, Metrocall added several more irons to the fire, the result of months of negotiations that are just now coming to fruition. In June, the company announced a nationwide marketing and promotional relationship with PageMaster Corp., a national promotions company, with which it has been working since the fall of 1998. As a result, PageMaster will offer Metrocall paging services to the customer bases of three different companies-Citicorp Credit Services’ Citibank credit-card customers, The Exxon Co.’s Driver Cash Card members and consumers of GE Lighting’s light-bulb products.
On a smaller scale, Metrocall announced a three-year agreement with AnswerNet Network, which will bundle paging devices and services with its other telephony services, such as live operator telephone answering service, text messaging dispatch, voice mail, telemarketing and live operator chat and voice support for Internet sites.
Strategic relationships such as these are central to the philosophy of Metrocall’s President and Chief Executive Officer William Collins III. Since he joined the company about four years ago, Collins has charged his marketing personnel with the task of opening new distribution doors in as many ways as possible.
“I’d like to think we have a more diverse distribution network than any of our competitors,” Scanlon said.
Analysts agree.
“Metrocall’s strategy is a lot broader. There are a number of different ways carriers are trying to differentiate themselves and are roping off their own little corner to do so. Metrocall seems to have their feet in everything,” said the Yankee Group’s Sterling. “Would you rather be No. 1 in one thing or No. 2 in five different things?”
Two of Metrocall’s newest initiatives involve the Internet and youth markets, which, Collins feels, hold great potential for future growth, as he said in Metrocall’s third-quarter earnings report last year.
The Internet effort began with Metrocall developing a stronger marketing presence on its Web site and forming a strategic marketing agreement with America Online.
Also in June, the company expanded on this focus by making what it called a significant investment in Klickback.com Inc.-an Internet-based catalog that advertises various goods and services to its members, who receive points for each purchase that can be used toward discounts on future purchases.
“We are testing advertising on other Internet sites right now,” Scanlon said. “We want to get a feel for who each site’s audience and demographics are and if it fits with our demographics and how we offer services.”
In targeting the youth market, one of the more innovative programs launched recently is Metrocall’s program to give incoming college freshmen pagers free of charge during orientation, which they can buy once school starts. A pilot version of the program was launched last month with Loyola-Marymount University in Los Angeles. Scanlon said Metrocall is negotiating with other colleges now and expects to announce other deals soon. That Metrocall is an affiliate member of the Association of College Stores trade group speaks to its dedication to that channel.
“Now, through the rest of the summer, we have a lot of swallows returning home,” Scanlon said.
