||Wireless Carriers Hold Consumers' Loyalty
In the battle of "carrier vs. handset" in building loyalty among wireless customers, the winner is clear: the carrier.
According to research from Market Strategies International, almost three-quarters of consumers (74%) said they consider remaining loyal to their carrier (due to factors such as coverage, customer service and plan) rather than their device (61%) or the operating system (60%) when the time comes to purchase a new plan or phone.
"The carriers own the customer, (who) then buys the handset," Paul Donagher, senior vice president, Communications Division, Market Strategies International, told Marketing Daily. "Typically, the carrier owns the customer relationship and that probably drives the loyalty."
The one exception is Apple, for whom 82% said they would remain loyal to the device, regardless of the carrier because of the familiarity they have with the phone and its operations. Among the loyalty drivers, 24% of Apple users said they were drawn to the phone's features (compared with 15% of other phone users), and 20% cited ease of use (compared with 12% of other users).
"Apple's loyalty is driven by a couple of things," Donagher says. "The brand is incredibly powerful. But when we asked consumers to break down what they liked, it's the ease of use and the functionality of the device. Once the consumer has learned the operating system, they're very loyal to it."
Comparatively, 83% of consumers said they would remain loyal to Verizon, regardless of phone choice. (Combining the two -- i.e., taking into account Verizon customers who use an iPhone -- increases Apple's loyalty scores by about 6%, while Verizon's stays about the same.)
"What consumers tell us is it's the network quality," Donagher says. "Consumers choosing Verizon have a superior network experience and are thus very loyal. Verizon has spent a lot of money and effort to gain that perception, and it's paying off."
Such brand differentiation will be more important now that every major carrier now offers the iPhone, and the U.S. wireless market is reaching saturation. The big key for telecommunications companies in the future will be loyalty, Donagher says.
"It's very much leveled that playing field," he says. "So the carriers need to build and work on their own loyalty. It will be interesting to see what they do. It's probably too early to tell, but this year is probably going to be a huge year when it comes to loyalty."
(Source: Marketing Daily, 05/06/13)