Mobile phone-based offers: a two-edged sword

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By: Wise Marketer Staff |

Posted on April 10, 2006

Mobile phone-based promotional offers have little impact on customer satisfaction and loyalty, with almost one-third of mobile phone users who receive promotional offers having acted on them in the past two years, but few say these offers make them feel more satisfied or valued, according to a survey by Harris Interactive.

In terms of consumer choices about mobile phone service providers, the survey found that two-thirds (66%) of US adult mobile phone users are comparison shopping for their wireless service provider, with more than two in five (43%) starting to do so two months or less before their existing contract expires.

But while providers are having some success with promotional offers (29% of mobile phone users who receive promotional offers have responded to at least one offer over the past two years), such offers do not stop most from comparison shopping and also have little impact on customer satisfaction.

Frequency, method and effect
Two out of five mobile phone users (40%) said they receive promotional correspondence from their wireless service provider at least once a month or more often. Another 21% said they receive promotional offers once every three months (21%), and 10% every six months (10%).

The survey also suggested that there can be "too much of a good thing", as many subscribers who receive offers would like to receive them less often than they already do. In fact, f consumers had a choice about the frequency of offers, only 12% would elect to receive them once a month or more often, while 30% would want them only once every three months, and 20% would want them once every six months. One out of five consumers (20%) said they would never want to receive any offers.

While frequency certainly affects the success rate of promotional offers from their mobile service provider, the method in which the offers are delivered is also a major factor. Among mobile phone users who receive promotional offers, many would prefer to learn about offers via printed materials, either by mail at home (22%) or as an insert with their bill (23%). Almost one-third (31%) said they would prefer to learn about them through opt-in email (such as an e-newsletter).

Satisfaction and value
For mobile service providers hope their promotional offers will cut down on the number of subscribers who shop around, and increase customer satisfaction, the survey suggests that there is little hope. Almost all mobile phone users who receive promotional offers and comparison shop (98%) said that these offers do not stop them from comparison shopping.

Moreover, 85% of those who receive promotional offers said these offers do not leave them feeling neither less nor more satisfied with their provider, and 84% said such offers do not leave them feeling any less or more valued as a customer. In fact, such offers can have the opposite effect, as 9% of those who receive offers said they make them feel less satisfied, and 8% said they make them feel less valued.

What's the right time?
According to Joe Porus, vice president and chief architect for the technology research practice at Harris Interactive, "Wireless service providers are eager to hang on to current customers and to acquire new ones. However, the survey shows that many providers are reaching out to consumers too often and may not be sending these offers out at the best time. Promotional offers may be more persuasive if they were received within the 60 day 'shopping clock' before a contract expires, which appears to be the time where the largest proportion of subscribers are seeking a better deal."

Harris Interactive's Winter 2006 Telecommunications Report: Hot Issues Facing the Industry, was conducted online during January 2006 and took into account the opinions of 1,067 US adults, of whom 865 were mobile phone users.

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