Wireless New Adopters Worth Less Than Experienced Users, Study Says

Share this article:
Though the U.S. wireless industry has room to grow, untapped market segments may not prove as lucrative as early adopter segments, according to a study on wireless services to be released today by Compete Inc., Boston, a predictive analytics firm, and Bear, Stearns & Co. Inc., New York.


For the report, "Characteristics of Wireless Subscribers and Non-Users," Compete and Bear Stearns surveyed more than 1,200 consumers to gain insight into wireless subscribers and consumers who don't have a mobile phone.


"In this study we found that new adopters of wireless services will generate less revenue than experienced subscribers," said Adam Guy, director of Compete's wireless practice. "Understanding the unique characteristics of these late adopters will be key to focusing on squeezing profits out of new customers."


The study assesses the wireless industry's growth potential, not just in terms of interested new subscribers, but also in how much these subscribers intend to pay for wireless service. Findings include:


· Safety reasons and family motivations are the main drivers for consideration among non-users who think they will adopt wireless in the future. Safety and emergencies account for half the reasons non-users want to get a wireless service, and family and friend considerations were cited 19 percent of the time.


· Creativity around business plans and service offerings will be needed to reach many customers in the non-user base. Carriers have recently emphasized hybrid plans over traditional prepaid, addressing lower-end customers but also leaving room for upward migration of service use. The study finds that family plans may be best to directly address many non-users and that carriers should leave true prepaid to the mobile virtual network operators, which have the capability to provide significant value in addressing the more economically sensitive potential subscriber.


· Service pricing and network issues are seen as the most likely reasons for customers to change service providers over time. The study found that the longer consumers had been wireless subscribers, the less effect price had on their choice of providers. Experienced subscribers have learned that being able to get and maintain a signal when wanting to use the phone is worth some premium over the low-end network experience.


"As the industry's 'acquisition' stage winds down, carriers will need to fundamentally shift from 'hunting' new subscribers to 'farming' their existing subscriber base," said Philip Cusick, wireless telecommunications services analyst with Bear Stearns. "Increasing the utility of wireless services and growing/deepening existing customer relationships will drive growth and success."


Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


Share this article:

Sign up to our newsletters

Follow us on Twitter @dmnews

Latest Jobs:

More in Multichannel Marketing

Wine.com Uncorks New Digital Marketing Opportunities

Wine.com Uncorks New Digital Marketing Opportunities

The online wine retailer's strategy incorporates different flavors and depths.

93% of Companies Are Ineffective at Cross-Channel Marketing

93% of Companies Are Ineffective at Cross-Channel Marketing ...

Companies point to a lack of resources as the most common reason for lackluster marketing integration, a study says.

Metal Mulisha Races Towards Customization

Metal Mulisha Races Towards Customization

The motocross apparel company boosts mobile and Web conversions through product recommendations and personalized search.

Copyright © 2014 Haymarket Media, Inc. All Rights Reserved
This material may not be published, broadcast, rewritten or redistributed in any form without prior authorization.
Your use of this website constitutes acceptance of Haymarket Media's Privacy Policy and Terms & Conditions.