Understanding customers who carry two phones

Until very recently it seemed inconceivable that regular customers would bother to carry two phones. The phones were bulky and expensive. Calls on them were expensive. There was no other reason than calls to even carry phones. All of that has changed. Today among young employed Europeans and advanced parts of Asia it is totally commonplace to have two or more mobile phone subscriptions - and quite often that also means that the user will carry two phones.

I have been monitoring this development since I first discussed it in my second book, m-Profits in 2002. But it was mostly only techno-geeks (among whom I count myself) who would bother to have their pockets bulge with "one gadget too many". But last year as we were observing many countries where over 20% of the population has two or more subscriptions - and mostly also phones - this bas become an active interest for mobile operators and all who are involved with the industry.

So I wrote a column about the subject which was published yesterday at Wireless Watch. The site is free, so you might want to go read the full story at this link:

http://wireless-watch.com/2006/06/05/learning-to-win-in-a-multiple-subscription-market/

I entitled the article "Learning to win in a multiple subscriptions market. Here is a short excerpt on what that story is about:

Who are the first to get second subscription?

Who gets a second subscription? Those who are most addicted to mobile (read young). Those who suddenly get a new top-end phone, ie who have money (read young employed). Those who suddenly have a huge jump in their disposable income (read young first-time employed).

How do young adults, first-time employed, behave? Very irrationally. They have been poor students the past few years. Now with their first full-time jobs, they feel like they’ve won the lottery, the total disposable income explodes. What happens to their phone spending with the first paychecks and the brand new phone(s)? Their phone spending more than doubles, perhaps to three or even four times larger.

No, the measurements that should try to discover customers who have churned, based on a reduction in their phone bill, will totally miss these customers. It is very possible that these young customers will increase their traffic on your network, while at the same time putting twice as much traffic onto your most dangerous competitor’s network.

But are your marketing tools, experts, processes, customer acquisition and retention methods prepared for this churn war. The partial churn. The invisible churn. And that of the most desirable, super-heavy consuming young first-time employed, heavily addicted users? How can you capture the heart and soul of this type of customer?

For all who are considering the mobile phone as a new mass media (the seventh) - this discovery, that many actually own two phones - is also very relevant. Sometimes we may have our new expensive superphone, the smartphone we got from our employer, in our pocket. And we might have our own, privately bought and perhaps simpler but smaller phone also with us. But at other times, like going out clubbing in the evening, we might only carry one of the two. Which is the one your service is on, are you able to reach your customer in that multiple subscriptions market?

We'll keep you abreast also at this blogsite and track these developments. But for now, you might want to read the article over at Wireless Watch to start the thinking.

Comments

[Ian Wood]

Tomi the problem comes not in the fact that I have had two contract phones for 18 months, thanks in part to the slow launch of 3G services by my first network, but who have me on an original staff tarrif. But also in the fact that the network with who I have a second handset not realising that within my house I also have two other phones on pay as you go. Thus if this network had a crm system that was worth its name it would contact me and ask how they can help these three phones communicate. For a number of years I have had to listen to marketing people talk about family schemes which would allow such a system to work only to be told that it is not possible because of issues with the billing platform and data protection. However I think that it is more likely that the issue is one of Networks unwilling to reduce on network call prices. Perhaps the move to services such as Genion by O2 Germany will at last see some form of innovation in muiltiple phones houses.

My niece carries a single handset but 4 different SIM cards so that she can speak with Work, Family, Friends and Boyfriend depending on the situation and location. She is the most extreme example I have seen of someone to who Mobile Phones have always been around and who has had one for over ten years!

[Tomi T Ahonen]

Hi Ian

Very good points, thank you. Yes, I hear this often. A typical very bad example is where an aggressive operator outbound sales effort targets your "second" subscription, not knowing you ALREADY have your primary subscription on their network. So for a hypothetical example, if I had subscriptions in the UK on Vodafone and Orange, and I get a call to my Orange phone, trying to convert me to Vodafone, clearly not knowing that I was also on Vodafone already. This kind of marketing causes a lot of bad will with customers...

Yes, its a new issue for our industry, and one that is very poorly undestood. Your daughter is a perfect example of Generation-C behaviour, and we're seeing it all over the planet.

In Russia and other parts of Eastern Europe it has become so common to switch subscriptions, that the latest phone number is a kind of status symbol and a sign of how close you are to a given customer - if you don't have their latest number, then you must not be very close to them. That kind of thinking.

A new world of marketing, and one which is dumbfounding the mobile operators today.

Thanks for writing Ian!

Tomi Ahonen :-)