New Study Tells Where Subscribers' Loyalty Lies
By Eric Lin, Tue Jul 20 08:15:00 GMT 2004
A new study from Strategy Analytics says early adopters and technology lovers may be big spenders, but they aren't loyal customers.
The fight for who owns the customer has been heating up in the wireless space. OS makers, handset manufacturers and network operators each are fighting for brand recognition or more preferably brand loyalty among subscribers. Strategy Analytics recently released a report telling operators that they shouldn't try sway every lust sub. Their efforts are best spent on trend followers and the mass market.
Early adopters and technology trend leaders only comprise about 24% of subscribers in the U.S. and Western Europe however they account 38% of revenue. Since they comprise the users who will adopt 3G technologies first, they make an obvious target for carriers to focus on when launching next generation networks, especially since their spending habits are just what the operators need to recoup those high spectrum costs. Initially, early adopters sound like a great market, there's just one problem: they have no loyalty to carriers, they barely have loyalty to manufacturer or OS brands. They are loyal only to technology -- whoever can provide them with the coolest devices and network features gets their business -- until someone else can provide something cooler.
Instead networks should concentrate their resources on those who follow trends, not start them. The mass market customer is more likely to show loyalty to a carrier's brand. In fact, in the U.S. may subscribers refer to their handsets not by the manufacturer's brand but by the carrier's. The carriers are not ignorant to this fact, as most tend to concentrate their branding and advertising efforts on less expensive feature phone models. This mass market is also where carriers are concentrating their efforts with the Open Mobile Terminal Platform Alliance, working together to develop OS standards with the intention of making advanced (more lucrative) features accessible to more users. Bringing more powerful platforms to less expensive phones will help carriers speed 3G adoption among the mass market, just like the report suggests.