This week, I had what is perhaps the worst customer service experience of my life - with a cell phone carrier. A carrier I have been with for more than ten years. The resulting chaos got me thinking. What in the world is going on with mobile?
Here’s why I think cell phone companies have their heads stuck in the sand - and are determined to stay that way.
Mobile, as we all know, is booming. By some estimates, mobile traffic accounts for a whopping twenty percent of all web traffic today, and is estimated to increase 18 times in the next five years. We love our smartphones, and our tablets - our Facebooking and Tweeting. We’re not giving them up anytime soon.
Perhaps it is this thought that has the Big Three cell phone carriers relatively complacent. Frustrated with our lack of service? Our prices? Our ever-changing policies? Fine. Go ahead and cancel.
They know we can’t get off the Kool-Aid. With only three major cell phone companies in America, they figure the pie is large enough to go around. If they lose a few customers here and there, well - they’ll make it up. Where else are people going to go?
The problem with this theory is that where there are consumers willing to pay for a product, there will always be innovation. Companies like Ting are offering a la carte cell phone service - by my calculations, my already-low contract plan would be cut by $77 a month, a savings of $1862 over the next two years. And that’s including the purchase of two unlocked phones, but as the company seems totally fine with you bringing your own phone as long as you purchase your first one from them and are up for a little hacking, my savings would be even more than that. Ting even recently ran a promotion in which it paid off the prior contracts of thirty-one subscribers. With zero fees, bill credits for data and minutes that go unused, and a “no limitations” policy, signing another expensive two-year contract with one of the Big Three seems a little ridiculous.
[Disclaimer: I have no affiliation with Ting. Although I may very well be a future customer]
Amazon has also recently been making a big splash in mobile. The recent launch of the newest behemoth Android phone, the Evo 4G LTE, has Amazon undercutting the carrier by $50 on the contract price, and their unlocked price is pretty reasonable too - especially considering the prices are tax-free up front. Brick and mortar stores are also offering incentives such as gift cards to go along with on-or-off contract purchases, along with offering their own protection plans and buy-back programs--making the incentive to walk into a carrier’s retail store smaller and smaller. Add in overpriced accessories, falling customer satisfaction scores, and employees that are often less-than-helpful, and...um, what are we hanging our hat on again, Big Three?
Oh, customer loyalty. After all, a long-term relationship with my carrier should count for something, right? Four service center visits, four very frustrating calls to customer service, and several headache pills later, the answer in my case is - um, no. It doesn’t count for a thing.
With rumors of Google selling their phones directly and unlocked, and at an affordable price, the mobile tide may soon be changing. If other manufacturers follow suit and are able to give consumers an attractive array of options while providing the freedom to switch teams at their leisure, carriers are going to have a lot of scrambling to do. As selling on consumer relationship seems to be a thing of the past, buyers are going to be more than willing to go where the money leads them.
And competition may be about to get a lot more interesting.