Family Plan Tariffs Provoke Strong Consumer Loyalty - Report

Just over forty percent of US adult mobile phone users say they currently have a family plan, and 97% of these consumers say they never had a family member leave their plan, according to a recent survey by Harris Interactive. Looking to the future, even more subscribers could sign up as one-third (33%) of mobile phone users who are not currently in a family plan say they will consider one when their contract expires. The survey also reveals the factors that fuel purchase decisions when selecting a family plan and who is making these decisions.

The study was conducted online from January 19 to 25, 2006 among 1,067 U.S. adults, of whom 865 are current mobile phone users and 342 are in a family plan.

The survey shows that about three-quarters (71%) of family plans primarily consist of just two members, spouses or partners, but the network of family plan users extends far beyond couples. Other members include:

• Parents (19%)
• Adult children ages 18 and over (18%)
• Children ages 10 to 15 (10%)
• Adult children with separate households (8%)
• Children ages 16 to 17 (6%)
• Elderly family members (3%)
• Other (9%)

Who's making the call

When it comes to contributing to the purchase decision for a family plan, 84% of adults say they put their two cents in. In some cases, other relatives (19%), parents (12%) and adult children aged 18 and over (7%) and those with separate households (5%) contribute their say.

Deciding factors

There is a mix of factors that impact a purchasing decision, but for those in a family plan, coverage/quality of service (32%) is almost as important as the price/monthly fee (41%) . Other factors like the phones available (14%) and customer service (13%) play a slightly smaller role.

Joe Porus, vice president and chief architect for the Technology Research Practice at Harris Interactive, states: "Wireless consumers clearly love family plans because they deliver great value. Wireless service providers offer such plans to build subscriber loyalty and reduce churn. However, this might not prove a winning strategy for providers in the long term. When contracts near expiration, consumers shop for the best deal and if a better family plan presents itself, the entire family will jump to the new provider. So, in the long run, family plans could contribute to lower margins and have little impact on churn."

Posted to the site on 31st March 2006