Movin' On Up

There's one in every crowd -- the person who always has to buy the latest gadget, whether he needs it or not. The trick is to get the rest of the crowd to follow.

To increase profits and extend customer service, wireless carriers are promoting higher-end technology and hardware actively to their customers. Some, such as Cellular One-Upstate New York, are offering the latest, greatest phones at discounted rates to loyal, high-value customers as part of a customer satisfaction strategy. Others, including BellSouth Mobility and Omnipoint, are hyping digital technology and wireless data to technophiles and corporate customers.

For eight months, BellSouth Mobility has been persuading subscribers, especially high-end ones, to migrate from analog service to digital, said Jeff Battcher, BellSouth Mobility manager of media relations. The effort includes a pro-active telemarketing campaign as well as direct mail pieces. In addition to increased efficiency because of subscribers who have moved to the digital network, BellSouth has witnessed other results.

"We find that customers use more airtime on the digital plans," Battcher said. "If, for instance, they were using 1,000 minutes on analog, and we discounted the digital phone, they are now using 1,200 to 1,300 minutes. Our churn has never been high, but churn in the digital group is even lower than the analog group."

He said customers use more minutes on digital technology because the pricing plans are lower and are coupled with free voice mail, caller ID and a message-waiting alert. Therefore, they use airtime when checking voice mail, and caller ID makes them more comfortable with receiving calls.

Although the carrier does not encourage customers to upgrade hardware pro-actively, it will offer discounts on more expensive phones in certain situations through its BellSouth Mobility Service Plus program.

"Discounts vary with their usage or how long they have been with us," Battcher said. "It could be a heavily discounted digital phone, and in some instances, it could be a free phone."

The discount is based on the customer's past usage and is determined by a formula that BellSouth computes by the person's length of service, amount of minutes used and how often he pays bills on time.

HIGH-END HARDWARE Karen Merkel-Liberatore, Cellular One Group director of public relations for the upstate New York area, said her company also might discount upgraded hardware for loyal 1-year-plus customers.

"For the most part, depending on the phone they want, a customer will pay for an upgrade," she said. "However, there are situations where, if they are a very loyal customer and they spend a certain amount on their monthly bill, we make exceptions."

Although it does not always give discounts, Cellular One-Upstate New York does plug high-end hardware aggressively. For example, last May the carrier sent direct-mail pieces to its high-end customers advertising both the Nokia 6120 and 2160 phones as part of its Digital Edge service roll-out. As the exclusive provider of Nokia digital phones in the market, Cellular One-Upstate New York offered upgrades to select people. The program's success surpassed expectations, as the demand for phones far exceeded the supply, and customers were put on waiting lists for months.

Right now the company is promoting the Nokia 5120 line. If a customer renews his contract for two more years, he gets a 50 discount on the retail price. A 1-year contract is required with other upgrades. Merkel-Liberatore said the contracts facilitate discounted pricing and are justified by the expense of the equipment. The advantage to offering upgrades lies in the fact that customers perceive the effort as good customer service from Cellular One.

"Our high-end customers want the latest in technology, and it provides a maximum customer satisfaction," she said. "We want to be able to give all of our customers the products they need and want, so it is important to have an upgrade policy, not only for the high-end customers, but for any customer who has been on service for a year or more."

Jim Wurm, Einstein PCS director of marketing, said his company does not believe in discounting higher-end handsets to existing customers. Instead, it promotes advanced hardware through its strategic displays inside the store. Rather than grouping all of the phones from a single vendor in one area and taking customers to the vendor they request, it groups the phones as low-end, medium or high-end. Mid-line phones are an easier sell through that method, he said. And, if customers go to the high-end display, they can see a group of high-end phones from multiple vendors and have a range of pricing from which to choose.

"We try to move them up the scale of phones if they come in," Wurm said.

David Standig, Triton Cellular and PCS senior vice president & chief marketing officer, said Triton promotes upgrades, but not to its own customers. When it launches service in its PCS markets in early 1999, it will entice competing carriers' analog customers to move to its digital service. In those cases, it will give out credit for analog trade-ins, but that policy is simply a way to get customers to commit to changing service, he said. If they give back their old handsets, it seals the deal.

"It also puts your handset in their hand as their only phone," Standig said.

Wurm said Einstein PCS salespeople are granted leeway to offer discounts on trade-ins for higher-end handsets, but it does not believe in publicizing that fact to customers, either.

"Our focus is to steer away from the concept of cellular because the reality is, we are not. If we tell people to bring in their phone and get a trade-in, it puts us back in that mindset," he said. "We want to be in the airtime business, not the phone business."

DATA CAMPAIGN Wireless data also has forced carriers to step up their high-tech marketing efforts. Omnipoint has started pushing a wireless data solution to users of 3Com PalmPilot Professional and Palm III personal digital assistants (PDAs). The product, Snap-On, is a terminal adapter that connects a PDA to a digital data-ready GSM phone and turns it into a mobile data device. Then subscribers can browse the Internet, update their schedules, create and send faxes, and send and receive e-mails, said Ellen Webner, Omnipoint public relations manager.

"It is very appealing to some of the blue chip companies that we have contracts with," she said.

Although Omnipoint does not sell PDAs, it sells accessories that work with them, including the DI 27, which is a Snap-On infrared modem that is used remotely with PDAs or notebook computers. The DI 27 will be in stores soon, and the Snap-On adapter is available in Omnipoint stores now for the Ericsson 388 and Ericsson 788 handsets. Adapters for the Siemens S12 and Bosch World 718 will be available later this year, Webner said.

Omnipoint is marketing the data and accessories several ways. Its first step was a booth at this year's PCS show where it demonstrated its solution to attendees, including FCC Chairman William Kennard and other FCC commissioners. Omnipoint demonstrates the product to customers in its stores and to media and analysts as it takes the show on the road.

"We are not doing the marketing through advertising so much as through the corporate selling end," she said. "We are trying to approach it from various angles to make people more aware of the next step of wireless phones. It is not just voice anymore."

One interesting marketing angle for Omnipoint is its joint sponsorship with Ericsson of the Liberty Science Center, a travelling cutting-edge science museum that will be in New Jersey for the next seven months. The two companies have an exhibit, called Show of Hand, which explains how a person's hands are major forms of communications.

"The marketing hook for us is that the latest cutting-edge communications technology still comes from the palm of your hand," Webner said.

Cook Inlet is marketing the Nokia data suite and continuing to promote the use of short message service (SMS) for different types of applications, especially to dispatch, heating, ventilation and air conditioning companies, said Jim Healy, Cook Inlet Western Wireless president. The carrier has been active in public safety with its SMS by working with officials in Oklahoma to conduct wireless data trials. The tests include working with video.

"It was not too far back that when someone mentioned video over wireless, people rolled their eyes and said 'right.' Now you can go into a building that has been damaged and actually take pictures, and send back live video to experts in remote locations," he said.

BellSouth Mobility also is encouraging customers to add wireless data to their services. It does so through direct mail, and it employs wireless application specialists in every major market. These individuals work with other salespeople and go with them to call on business customers. For example, its sales team sold the company's COSMOS in-building wireless system to a Duckhead manufacturing plant through the help of a wireless application specialist.

No matter how you promote it, upgrading your customers to higher-end hardware or technology offers several advantages to you. As these carriers have shown, a little marketing goes a long way toward higher profits and increased customer satisfaction.