Different Strokes

With wireless firmly in the mainstream, catch-all categories such as "consumers" and even "families" can make for scatter-shot marketing. Meet some of wireless' new demographics.

Wireless subscribers once were viewed as a homogenous mass that shared the same motivations and responded to the same marketing stimuli. As a result, marketing almost always focused on lower rates and bigger buckets.

As the industry matures, marketers are discovering that consumers aren't all alike. They're finding diverse consumer groups, each with its own needs and characteristics. These discoveries are spawning new marketing theories and ad campaigns.

"Price has become relatively equal among carriers," said Rebecca Diercks, Cahners In-Stat Group director of wireless research. "As prices have become more equal, there is more attention to market segmentation with carriers offering different plans for different consumer groups."

The challenge is identifying user segments and finding out what makes them tick.

Four New Groups
A 1999 Cahners In-Stat Group study identified four sub-groups, each with different levels of wireless usage, technological sophistication and marketing strategies:

• Information Junkies. Typically business professionals with high computer usage at home and work, these subscribers have a strong need for wireless Internet and data services.

"They're tough to reach because the corporations often make the decisions for their wireless services," Diercks said. "But it's important that they be supported with a high degree of customer service, or they'll probably complain to their decision-makers."

Marketing to both them individually and their companies improves the chances that one will introduce the technology to the other.

"For the data services, it's important to try to reach both the end user and the telecom decision-maker because there's potential for both types of usage in the corporation and for personal use," Diercks said.

• Family of the Future. These technologically savvy families have high adoption rates for computers and high-tech equipment, and they're not bewildered by buzzwords such as "IP" and "throughput."

"You can appeal to the technology advantages of CDPD versus circuit-switched data," Diercks said.

By the same token, however, they recognize and won't settle for poor service. "They're looking for the clearest connection with the fewest dropped calls," Diercks said. "It's important that a carrier stress that they're on the technological cutting edge. This group showed a great deal of interest in bundled services, and that could help tie them in for longer and reduce churn."

• Prime-Time Family. These families own few computers, partly because they're not comfortable with things high-tech. They're motivated by ease-of-use and price.

"They're not going to be looking for service quality or a wide range of features or data services," Diercks said. "To reach these people, they have to get a low-price plan and be shown that this technology is easy to use."

Marketing also should show how wireless fits their lifestyles.

"They need to be convinced why they need a wireless phone," Diercks said. "They're sort of the 'show-me' group."

• Mature, Moneyed Middle-Agers. These subscribers typically pay the most per call.

"They have a high usage of analog plans, so we recommend that carriers try to keep them on their analog plans as long as possible," Diercks said. "But as soon as their contracts come close to ending, be sure to reach them first before they start shopping around and get them to upgrade to digital."

Three of these groups are new consumer segments. The only group remaining from a 1998 study were the mature, moneyed middle-agers.

"E-commerce might be a big part of any new consumer group," Diercks said. "The family of the future group has this potential."

Ken Woo, AT&T Wireless director of communications, agreed that e-commerce likely would be a defining characteristic of some new consumer categories.

"When you achieve data speeds three times what they are today, with security, then you will see a big push to attract consumers to wireless Internet service," Woo said.

AT&T Wireless already has defined several groups.

"High-value customers are those who use their wireless phones a lot," Woo said. "They tend to want flat-rate plans. Data users are those on the cusp of high-speed wireless data. Young professionals tend to like features such as bright colors and logos on their phones. The aging baby boomers often purchase phones for family members."

Know Your Users
Some providers follow the variety-is-the-spice-of-life recipe when targeting emerging consumer groups. Sprint PCS, for example, has an array of plans.

"Clear and simple: That's our approach," said Ashley Pindell, Sprint PCS spokesperson. "Our rate plans and services are easy to understand, so more people are likely to try one of them."

The company offers three levels of Internet connectivity and several versions of Internet-ready "Web phones." In an effort to attract more Hispanic customers, Sprint PCS recently added phones with voice-activated features in Spanish.

One element of Sprint PCS' big-tent approach is its "Add-A-Phone" plan, which allows a customer to add more phones and share rate buckets with other group members. Targeting groups of users rather than individual members is a good strategy because that service now becomes the preferred means of communications for the group's members. A member considering churning to another provider might be dissuaded by rates higher than those available in that group's bucket. If the group uses wireless data to communicate, members who churn might have difficulty communicating or accessing information.

One example of group-targeting is Nextel, whose focus is the business market. Although the term "dispatch communications" is associated with the push-to-talk radios used by blue-collar work groups, it's expanded beyond that niche to include, for example, a way for members of a company's IT department to communicate in a building or campus.

"Nextel has changed the definition of dispatch communications," said Stephan Beckert, Strategis Group analyst. "They have extended the concept to include any predefined work group."

Nextel also is an example of how a provider's technology choice helps determine which markets to pursue and what usage patterns it might expect.

"We go after business customers because our technology lends itself to that market," said Kara Palamaras, Nextel director of communications. "Our average revenue per unit is $73, which is much higher than the industry average. That's because our customers are on the phone a lot."

But as competition increases and rates decrease, there are many more user groups waiting to be found. The company that uncovers one first has the opportunity to plant its flag atop that particular category, and once established, it's hard to displace. The wireless world is big, and only part of it had been mapped. All the rest is uncharted, unclaimed territory.

Gibbs (sgibbs@usit.net) is a freelance writer based in Germantown, TN.