Wireless Phones Reach Their Party
WIRELESS TELEPHONES are no longer merely for intense urbanites who can’t run out for a cup of coffee without staying in touch. Heaven forbid they could sip a latte without being on a call.
Nowadays, the demographic groups that comprise the 60 million wireless telephone users in the United States are much broader.
Deregulation has jet-propelled that growth, fueling competition among telecommunications companies and boosting direct marketing campaigns, such as the one cooperative direct mailer Advo is conducting for GTE Communications Corp., Irving, TX.
Telecommunications “is one of our primary focuses in the industry. Just a couple of years ago, most markets [had] just two competitors. Today, we’re seeing up to five or six,” explains Todd Nissen, vice president for strategic accounts at Windsor, CT-based Advo.
The result? Wireless providers that had used one-to-one direct marketing techniques have found it less cost-effective. Shared mail is effective for “this broad silo of specific users,” Nissen says, because it “can reach everything from an entire market down to a specific consumer segment.”
Advo delivers GTE’s ads as part of a four-page wrap package with other ads tucked inside. It goes to neighborhood clusters with similar demographics, which parallel GTE’s targets. Demographic, lifestyle, purchase potential and other data are overlaid onto these targeted clusters. Advo boasts a 74% readership and 34% response to one or more ads in the package. There are at least eight ads in each pack.
Why Shared Mail? GTE, which uses a variety of other direct response and other marketing methods to reel in customers, invests in shared mail because “it can be as much as 50% more efficient. Or it can be more than 50% more expensive. That’s why continued testing is important,” asserts Joel Dollar, GTE’s director of marketing communications. The rate for 1,000 names is $30 to $60 depending on how you target, Dollar says.
Shared mail can be counted on to eliminate waste. “It used to be you delivered every household. Now you can deliver the ones you’re looking for,” claims Dollar, adding that it is still not as effective as solo mail pieces, “but there are cost efficiencies because of the shared mail.”
It’s also effective for hitting a growing target.
Sub-targets That’s important to GTE because there are four very different sub-targets among wireless consumers. Those in the largest group (56% of users) need the devices “for emergencies,” says Nissen. They want to be able to call a tow truck if their car breaks down, or notify their spouse if their commuter train is late. This basic user delivers a low/average revenue rate, “but they tend to churn less and typically have the service for a longer period of time. Because these are relatively low dollar value users, their cost for acquisition has to be as low as possible,” he adds.
The most quickly growing sub-target is prepaid wireless buyers, typified by folks with budget constraints and credit problems.
Another group is catching up with them, though. These are people who are often affluent, but budget-conscious, those wanting a “telephone allowance” without the fear of going overboard-such as the parent who gives a prepaid card to a student away at college. Advo would suggest a target-rich cluster, for, say, the prepaid segment of more affluent households with a son or daughter around 22.
Members of the fourth group “are technologically savvy, with a need for more features.” These people may use more minutes a month than others, “but they are churners, more likely to switch services based on newer technology or better rate packages,” says Nissen.
