Branding Key to Cell Phone Purchase in USA

As the number of service features being offered on cell phones grows and new designs become more popular, US customers are increasingly influenced by the handset when selecting a wireless service, according to the recent J.D. Power and Associates 2006 Wireless Retail Sales Satisfaction Study Volume 2.

The study found that 19% of customers cite the type or brand of cell phone as a key factor during the initial process of selecting a wireless service, up from 11% in 2004. While the brand of wireless provider is still the most popular reason influencing the initial selection process, it has decreased significantly in importance, down 8 percentage points from 2004 to 40% in 2006. Other key factors that influence the initial selection process are price/promotion (29%) and retail location (12%).

Commenting on the finding, Kirk Parsons, senior director of wireless services at J.D Power, said "It is clear that as the number of cell phone service offerings increases, and the design and visual appeal improves, wireless carriers and national retail chains are using the handset as a key promotional tool to attract new subscribers." Additionally, as service plans are more competitively priced, retail outlets of the major wireless carriers are also using cell phones as a key differentiator, typically offering exclusive deals on new and popular models, such as the Motorola RAZR. Carriers and retail chains are making these trendy cell phone models more available in order to increase store traffic, raise market share and, more importantly, increase the likelihood of repeat purchases.

Mr Parsons concludes, "Promoting the cell phone instead of the service plan and the carrier that provides that service may drive more initial traffic to the stores, but it can potentially have a negative financial impact with higher churn rates."

Volume 2 of the 2006 Wireless Retail Sales Satisfaction Study is based on experiences reported by 7,530 wireless users who completed a retail sales transaction within six months prior to being surveyed. The results are from the two most recent reporting waves, which were conducted in April and July 2006.

The company is online at www.jdpower.com

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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