Wireless wars

They're everywhere - in shopping malls, restaurants, even in high schools.
Cell phones have become ubiquitous. In fact, the Canadian Wireless Telecommunications Association (CWTA) reported that 44% of households had access to a wireless phone in 2000, and predicted the number would rise to 50% this year.

They’re everywhere – in shopping malls, restaurants, even in high schools.

Cell phones have become ubiquitous. In fact, the Canadian Wireless Telecommunications Association (CWTA) reported that 44% of households had access to a wireless phone in 2000, and predicted the number would rise to 50% this year.

As a result, the pool of potential users – those who still brave life without a mobile – is shrinking, forcing wireless brands to battle more intensely for their consideration.

The tendency is to turn to incentives such as free minutes and services. Take the Solo RealTime Weekender from Toronto’s Bell Mobility, featuring a mobile for $149, plus three months free service.

Or Calgary-based Telus’s Big Deal, which includes 150 minutes of weekday and weeknight calling, 100 free minutes of domestic weekend long distance calling and unlimited local weekend calling – all for just $25 per month. Telus also offers several other promos involving rebate cheques or credits.

Meanwhile, Montreal-based Microcell Solutions, which provides wireless services under the Fido brand, hands out a $100 credit for the Mitsubishi G310 – the price of the handset when you sign up for a monthly plan. Hence, the phone is really free.

Toronto-based Rogers AT&T will sell you a Nokia 3360 for $49.99, when you pay $25 a month which, of course, includes unlimited weekends. There’s a bonus if you buy online too: a free Nokia headset kit and cigarette lighter adapter, valued at $75 in total.

Confused? So are we – and these are just some of the plans wireless providers offer to get consumers answering their call. Strategy polled three experts from the P&I field to help sort it all out, and find out which plans really ring true.

Tom Beakbane, president

Beakbane Marketing, Toronto

The Rogers AT&T Pay-As-You-Go plan is the best offer. Even though the phone is initially expensive, the added value is high. The services mirror Bell Mobility’s offer and the accessories are more useful than those from Fido or Telus.

However, none of these companies offer a particularly distinctive program. They offer incentives for the wrong reasons. The problem comes when you don’t use them to close the sale, but to define the brand and service offering. They are making these offers because they haven’t figured out how to describe a meaningful point of difference.

In some ways, I feel sorry for these cell phone companies. They all have aggressive budgets and they have to sign up a certain number of users to keep shareholders happy. But the number of potential users is diminishing all the time – most people who want a cell phone, have one.

The upside is that there is still a potential market of marginal users including older folks, moms and dads. However, none of these programs really appeal to that group.

Rick Shaver, VP, client services

Encore Encore Strategic Marketing, Toronto

To stay in business in this constantly changing category, marketers must find reasons for customers to purchase their products every day. Incentives are at the core of brand choice determination.

But numerous incentive bundles, such as breaks on the cost of phone handsets, phone accessories, free airtime, and rebates are thrown at consumers daily. For target consumers, trying to decode what indeed are the best deals out there has to be exhausting.

Clearly Fido’s $0 deal on their Mitsubishi G310 is simple and breaks through to the consumer with the WIIFM (what’s in it for me?) principle in mind.

With cell phones now commodities, the critical differentiating persuasion factors become the incentives themselves. Thus to be able to say ‘buy this phone and with the $100 rebate it’s free’ has to be compelling. It makes the focus of sale for your advertising (free phone!) pretty darned simple for the consumer to comprehend in a very complicated category.

Simplicity always rules. Coupled with a killer incentive, it increases your chances of reaching your business goals.

Tony Chapman, president

Capital C, Toronto

I think what most of them have is the currency to give away weekend time, because there’s little variable cost to it. It’s become ‘one cent a minute for weekends,’ or it’s free. The longer they go with this, the less perceived value the consumer has for airtime, and the less effective the incentives will become.

Ultimately, the simplest programs have the broadest appeal, such as those offering something with more value than weekend time, which is accessories [from Rogers AT&T].

When you’re dealing with sexy new hardware, advertising a promotion is key, but it has to be a message I can grab immediately. The minute it’s mail-in rebates and free airtime between 4 p.m. and 5 p.m. on every second Saturday, consumers just tune out, because they don’t have time to comprehend it.

If I were Rogers or Bell, I would be looking at a bundled offering. Can I carry the consumer across to Internet and phone services as well, so that I have an even stronger relationship with the consumer? You have these four companies and it’s all about who can take the most pain to gain that customer.