Reaching the Retired

When cellular first was introduced 15 years ago, the intended audience certainly wasn't the senior set. But today this group should be a primary target. Consider 65-year-old Emma Smith. She is retired and living on Social Security. She may not be wealthy, but she knows how to spend her money wisely. A cellular phone would be a great investment. Although she's not interested in the bells and whistles, she travels frequently and is concerned about her safety. Emma has thought about buying a cellular phone, but the ads she has seen have convinced her the phones are just high-tech gadgets for young people to understand and use.

In marketing programs, carriers tend to target young and middle-aged people, largely ignoring senior citizens such as Emma. Cahners In-Stat research found that although people in this segment (living on Social Security or largely retired) currently have the lowest adoption rates of wireless phones, they are one of the most promising growth-market opportunities. Representing 14% of consumers surveyed, it is a significant market segment that carriers have yet to exploit, established carriers as well as new companies.

Most carriers, including AT&T Wireless, Bell Atlantic Mobile and Sprint PCS, have no marketing programs geared specifically to this segment. Companies believe their wide array of pricing plans is reaching these consumers effectively. But research illustrates that carriers should restructure marketing programs to better reach this group.

Senior citizens' current usage habits provide valuable information that carriers should use to create effective marketing programs. For example, In-Stat research showed that although this group makes and receives the fewest calls, call length averages more than three minutes each, and few in this segment use pagers.

Research also showed that on a scale of 1 to 5, where 1 equals very important and 5 equals very unimportant, customer service (1.14), easy-to-use service (1.15) and geographic coverage (1.36) were the factors rated most important in selecting wireless service. In addition, 33% of the living-on-Social-Security segment rated past experience with a company lowest in importance of their purchase criteria.

Living on pensions and other savings, this group averages the lowest income at $27,000 per year. On budgets, Social Security recipients are more cost-conscious than most other segments. However, this criterion is far less important than customer service. One hundred percent of people in this segment rate it somewhat or very important in their buying decisions. Carriers should create special programs that revolve around a high degree of customer care for this group.

Carriers must be careful in how they position their service to this group. These potential customers do not want the latest, greatest technology. People who fit in the living-on-Social-Security category are the most likely to say that wireless technology is too new and untested (35% strongly or somewhat agree). They also are not the first to go out and buy consumer products. And they are one of the groups least familiar with the term PCS. Cellular carriers can optimize provisioning of analog service to this segment.

Consumers in this group are more likely than other segments to purchase wireless phones at retail stores (29%). Established cellular companies are more likely than new companies to sell through carrier-owned stores. Newer carriers make more extensive use of consumer-oriented retail channels, which fits better with this segment's channel preference.

Wireless carriers largely have focused marketing programs on bundling minutes and features. Although successful, these programs are not necessarily appropriate to reach selected audiences. More targeted marketing would be more effective in successfully selling to a largely untapped segment that has great market potential. Once new elderly customers sign on for service, carriers must reach out to these people through pro-active customer-service calls to ensure they are satisfied.