Marketers To Increase No-​Contract Phone Promotions

Consumers are looking for ways to streamline expenditures. One likely target of the new focus on finances may be the mobile phone. Up until the last few years, the monthly telecommunications bill for most people was a steady and predictable budget item. But the new need for connectivity has seen the cost of communications rise for many consumers. A significant percentage of consumers have already cut the landline cord to save money. But many more are considering making service changes to bring their wireless bills under control.

The Net10 Prepaid Wireless Consumer Trends National Poll found that the following percentages of consumers plan to make a change to their plans once they can do so without incurring a penalty from their current service provider:

  • Very likely to switch to a no-​contract or prepaid phone: 23%
  • Somewhat likely to switch to a no-​contract or prepaid phone: 24%

Currently, nearly 60% of consumers who have a contract-​based service would be very or somewhat likely to sign up for no-​contract or prepaid phone that allowed “unlimited talk, text and Web or email access for $50 a month with no penalty.”

There are other reasons that consumers would consider switching to no-​contract phones. These include:

  • Reducing expense of mobile phone bills 68%
  • Reducing expense of smartphone features that aren’t used 58%
  • Avoiding early cancellation fees 49%
  • Tired of poor service quality 40%
  • Tired of poor customer service 40%
  • Smartphones now available on no-​contract basis 36%

The survey also indicates that marketers may have more success promoting no-​contract or prepaid phones to younger consumers. This group, ages 18–44, had a higher rate (11%) of dissatisfaction with their current plan.  When it comes to older consumers, over age 65, only 3% had complaints.

As the smartphone market reaches critical mass, promotions based on price rather than features may become more common. Marketers who can profitably promote pre-​paid or no contract plans may find an extremely positive consumer response.

[Source: Net10 Prepared Wireless Consumer Trends National Poll. New Millennium Research Council. 3 Nov. 2010. Web. 17 Nov. 2010] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.