January 28, 2009

Understanding How US Consumers Buy Mobile

Except For A Fickle Minority, Service And Value Far Outweigh Devices As Drivers For Switching

by Charles S. Golvin

with Michelle de Lussanet, Abe Garon, Dan Wilkos

Executive Summary (This is a document excerpt)

With cellular service saturation looming on the horizon — more than nine out of 10 US online consumers own a mobile phone today — mobile operators have shifted their focus to subscriber churn. Yet despite consumers' increased level of experience with mobile, the decision-making process for subscribers is complex, incorporating diverse components of overall value, customer service, network coverage and performance, contract commitments, not to mention multiple retail channels and a landslide of marketing. Examining consumers' purchase process and underlying motivation, we identified seven segments of mobile buyers, including those who switch providers for better coverage, those who switch to save money, and those who switch to get a specific or improved device. To reduce churn, product strategists at carriers must understand their customers' and prospects' motivations and apply a differentiated approach to customer retention and acquisition in each segment.

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