Promotions Have Little Impact on Customer Satisfaction and Loyalty - Report

A new Harris Interactive survey shows that two-thirds (66%) of US adult mobile phone users shop around for wireless service providers, with more than two in five (43%) beginning to do so two months before their contract expires or less. 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), these offers do not stop most from comparison shopping and also have little impact on customer satisfaction. The survey also shows 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 currently do.

Promotional correspondence

Two in five (40%) mobile phone users say they receive promotional correspondence from their wireless service provider at least once a month or more often. Another third say they receive them once every three months (21%) or six months (10%). However, if they had their say, only 12 percent would elect to receive them at least once a month or more often, while 30 percent would want them about once every three months and 20 percent would want them about once every six months. One in five (20%) say they would never want to receive any offers.

While frequency certainly affects promotional offer success, so does the mode in which the offers are delivered. Among mobile phone users who receive promotional offers, if they could choose, many would like to learn about offers via printed materials, either by mail at home (22%) or as an insert with their bill (23%). Almost a third (31%) would like to learn about them through an opt-in email, such as an e-newsletter.

Satisfaction, value and effectiveness

If providers hope their promotional offers will cut down on the number of subscribers who comparison shop and increase customer satisfaction, they are in for a let down. Most (98%) mobile phone users who receive promotional offers and comparison shop say these offers do not stop them from comparison shopping. Furthermore, 85 percent of those who receive promotional offers say these correspondences do not leave them feeling any less nor any more satisfied with their wireless service provider, and 84 percent say they do not leave them feeling any less nor any more valued. In fact, these offers have the opposite effect on some as nine percent of those who receive offers say they make them feel less satisfied and eight percent say they make them feel less valued.

Joe Porus, Vice President and Chief Architect for the Technology Research Practice at Harris Interactive comments: "Wireless service providers are eager to hang on to current customers and to lure new ones into their grasp. 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 out seeking a better deal."

These are some of the results of the Harris Interactive Winter 2006 Telecommunications Report. 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."

Posted to the site on 3rd April 2006