Mobile Telecom Vendors to Continue High Rates of Advertising

With mobile phones now reigning as must have devices, telecom firms are battling for the most lucrative customers. Earlier this week, one survey revealed that a significant number of consumers are spending more on mobile phone service than they are on groceries. To capture most of this spending, telecom firms are increasing their ad spending, a strategy that is definitely working.

Research conducted by the CMO Council, sponsored by Ricoh, shows that consumers don’t consider themselves loyal to their mobile provider. In fact, less than 1/​3, 29%, say they’ll stay with their current provider. What consumers do care about are the details – they want the best package available and the latest upgrades. Only about 43% of surveyed subscribers believe that they are getting what they pay for. The biggest complaints center on poor quality, hidden fees and costs, and surprise charges on their bill for data use or texting.

Operators in this competitive industry are well aware of consumer complaints and frequently advertise to lure new customers. Consumers are noticing these ads. In fact, advertising is the top reason consumers consider switching carriers:

  • Seen ads for other companies 16%
  • Current carrier has no loyalty reward plan 12%
  • Want to switch to pay-​as-​they-​go plan 11%
  • Negative experience is leading them to switch 10%

The survey also revealed that consumers do not see the value in complaining to the current carrier about problems they have experienced. The overall level of customer satisfaction stands at 70%, which is lower than motion pictures (76%) and computer software (77%). The current consumer attitude regarding mobile phone service leads to a higher likelihood that they will be open to promotional messages from competing carriers.

[Sources: Woodruff, Mandi. One in Five People. Businessinsider​.com. 12 Sept. 2012. Web. 13 Sept. 2012; What’s Critical in the Telecommunications Vertical. Cmocouncil​.org. 2012. Web. 13 Sept. 2012] 
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.