June 5, 2002 5:35 PM PDT
Wireless study: Low prices win hearts
A survey of more than 2,000 people with wireless phones indicates that the way to win consumers' hearts is through features like lower prices and better coverage, according to the Yankee Group, the technology research firm that conducted the survey.
Twenty-six percent of respondents said that offering lower-priced service plans was the top item their service provider could address to keep them from switching to another carrier. Twenty percent listed improved coverage, which came in second place; and 14 percent named phone upgrade programs as the third most important feature.
"Mobile phone users...are looking for better basic services," Yankee Group analyst Linda Barrabee said on a conference call.
Only 6 percent said that more enhanced services like wireless Internet access and text messaging would keep them from switching to another carrier's plan.
The issue of customer loyalty remains a concern in the industry, since 27 percent of people said they have switched carriers at least once since using wireless service.
The study also revealed that carriers need to market the value of enhanced services to customers more effectively. When asked the reason for not using enhanced services, 45 percent of respondents said that they either do not want or need them.
However, the service is making gains despite the lack of interest; 18 percent of respondents said they used wireless data or Internet access versus 8 percent of those in the survey done in 2000.
Wireless carriers have more work to do when it comes to coverage quality. About 25 percent of survey respondents said they experienced poor sound, poor coverage or dropped calls. This is an improvement from the 2000 survey of consumers but falls short when compared with carriers' view on coverage.
"It doesn't matter if carriers think that 5 percent of calls don't go through, when consumers think that it happens 25 percent of the time," analyst Knox Bricken of the Yankee Group said in an interview.
Bricken said that carriers can do a better job of bringing consumer expectations for wireless service to more realistic levels. Many users expect their cell phone to be as good as their land-line phone service, which is an inherently more stable technology that relies on wires instead of radio signals.