Wireless carrier marketing efforts during the last year have largely focused on new pricing schemes, but that may be about to change.
AT&T Wireless Services Inc. kicked off the trend more than a year ago when it introduced its Digital One Rate plan. In the year since the introduction, several carriers have introduced their own versions of single-rate plans.
Most recently, personal communications services operator Powertel Inc. announced nationwide dime-a-minute wireless rate plans that cut roaming and long-distance fees. The plans range from $30 per month for 120 minutes to $120 per month for 1,200 minutes.
Bick Truet, senior partner of Technologies Research Group in Clinton, N.J., said single-rate plans have served to clean up a market that was confusing for customers and has made wireless more attractive for later adopters. The ability to budget a rate for wireless service was a significant issue for late adopters, he said.
However, the single-rate pricing phenomenon, which originally was touted as the ideal solution for the coast-to-coast business traveler, has focused many carriers’ attention on the national picture. Truet said few single-rate pricing plans focused on smaller geographical areas have surfaced.
“They tend to forget that there is a very large market that doesn’t require service outside a metropolitan area or outside of a state,” said Truet, who noted those customers might respond to a fixed-rate pricing plan that includes a more limited area for a lower price. “Everyone is still pushing for nationwide.”
Truet warned that while lowering prices on the surface appears to be a quick and easy way to bring customers in the door, many carriers forget to consider whether the costs to support customers at a lower rate can be justified.
Innovative ideas
With so many carriers jumping on the single-rate pricing bandwagon, the playing field is leveling out, and carriers again are searching for ways to differentiate themselves from the rest of the wireless pack. While pricing remains one of the easiest and quickest ways to attract new customers, some carriers have begun to offer promotions that have nothing to do with price.
“This should be the time when the really fun stuff comes in,” said Truet.
Sprint PCS, 7Up and Nokia have teamed up for a promotion aimed at young people. As part of 7Up’s “UNderground Network” national promotion, 10,000 Nokia 5170 digital wireless phones with three months of Sprint PCS airtime will be given away. At the end of the promotion, 25 winners will be selected to attend an UNderground party and notified via a text message on their wireless phone.
In addition to reaching thousands of potential new customers, Sprint’s and Nokia’s logos will appear on more than 700 million bottles and cans of 7Up to be sold in more than 100,000 nontraditional points of distribution, said the company.
AirTouch Communications Inc. in March introduced its AirTouch Promise marketing campaign that includes six customer-service guarantees, including a welcome call, live customer service 24 hours a day, nationwide access to customer service via an 800 number and credits for dropped calls.
“We certainly pride ourselves on being price competitive,” said Jonathan Marshall, a spokesman for AirTouch. “But what really distinguishes us is our recent big marketing push-the AirTouch Promise-which is an effort to distinguish AirTouch from the rest of the wireless pack by emphasizing not only price but customer service.
“We think there’s a lot more to the value package in wireless than just the price per minute or the size of the bundle,” continued Marshall. “It can be confusing and it can be frustrating if you can’t reach customer service. The AirTouch Promise is really an effort to upgrade the expectations of customers and consumers in the marketplace and to associate really high standards of service with the AirTouch name.”
In its “U.S. Cellular/PCS Operator Report” released earlier this year, Strategy Analytics outlined several innovative marketing and promotion initiatives carriers have introduced. Several carriers are offering prepaid plans, additional line promotions and family plans that allow customers to divide included airtime among more than one phone, according to the report.
Strategy Analytics also highlighted a charity promotion offered by Pacific Bell Wireless in California that gave customers a free wireless phone, three months of information services, five free video rentals from Hollywood Video and a free pizza, all for a $20 donation to the Special Olympics.
Thinking globally, acting locally
In addition to attracting new customers through the promotion, Pacific Bell also likely generated some public good will when it handed over a $2 million check to the Special Olympics of Northern California last month.
Carriers are creating public good will through public-service programs and corporate sponsorships of everything from museum exhibits to golf tournaments to professional sports stadiums.
While that strategy may be good for reaching large audiences, Hunt Eggleston, president of San Diego-based Technology Trends Inc., envisions a more local approach.
“Why not sponsor a little league team?” asked Eggleston. “Or take out a quarter-page ad in some of the local yearbooks?”
Local sponsorships are just the tip of the iceberg of what Eggleston said should be an overall localized approach to marketing that complements the national plans carriers are implementing.
“In the industry, from a marketing standpoint, the big carriers are still trying to identify national homogeneous segments,” said Eggleston. “There really are significant regional differences.”
Not only should carriers develop marketing programs that are highly local, they also should segment customers and create an acquisition and customer-care program that caters specifically to that group. To succeed, carriers need to change the way they think about doing business, said Eggleston.
“Logistically it requires the conversion of a Volkswagen into a Porsche,” said Eggleston. “Is it doable? Yes. Will it take time, energy, money and focus? Yes. Is there a willingness to do it? No.
“Right now every carrier’s top line number of subscribers is going up, and no one cares how large the hole in the bottom of the bucket is,” said Eggleston. “If you have a relationship with your customers, you’ve given them a reason not to churn.”
Eggleston suggested carriers hire segment managers whose compensation is tied to acquisition and retention rates of customers in their specific category. Carriers also should continue to address specific segment needs throughout the customer-care process by providing a different 800 number for customers in specific segments to call and handling customers differently depending on which segment they fall into, for example, he said.
Wising up
These new creative methods for reaching and retaining customers have a long journey from concept to reality. Mike Crawford, president of M/C/C, a Dallas-based marketing communications firm specializing in high-tech industries, said wireless carriers are beginning to think about and deploy different marketing strategies.
“Carriers are looking at trying to create a brand and dispersing customer-acquisition costs,” said Crawford. “They used to just pound the airwaves with their ad message, and that put them in a pickle.
“Now they are standing back and trying to figure out how they can communicate value to customers,” he said.
Crawford noted that different makes of cars evoke different perceptions from consumers. The same thing should happen in the wireless industry, he said.
“You could be perceived as being a leader in the latest applications, services or technology,” said Crawford. “Or you could be perceived as being the most reliable or flexible or having the best customer service. Or you could be perceived as being the cheapest.”
Crawford said carriers don’
t need to communicate the value of wireless service anymore because that has been accomplished in the last several years of advertising.
“Now it’s about lifestyles,” he said. “Customers choose the service that meets their specific needs, and who they choose is where marketing comes in to play.
“Now carriers are giving customers a reason to understand the differences between one carrier vs. another carrier.”
