The average rural wireless customer tends to be older and less likely to have children living at home in comparison with the typical American wireless customer, which has implications for rural wireless churn. This according to new rural wireless churn research from research firm iGR. But even though older people without children at home are less likely to switch carriers, there are opportunities for rural wireless carriers to steal customers from larger national competitors, said iGR President Iain Gillott in an interview.
Rural Wireless Churn
“People in rural areas tent to have been with their carrier for longer” in comparison with people in metro areas, said Gillott. About 80% of rural wireless customers have been with their carrier for more than a year – and that poses some unique marketing challenges, he said.
On a nationwide basis, a large percentage of wireless users are open to switching carriers, which means that marketing messages can be generic and broadly targeted, Gillott said.
“In rural areas, you have to be a lot more segmented . . . if you get all Taylor Swift-y on people, it’s not going to resonate,” he commented.
As for how to segment, Gillott noted, for example, that there are important differences between rural customers who use their service only for personal use and those who use it for business and personal communications. In particular, dual-use customers are likely to use their devices in a wider range of geographic areas and to be aware of areas lacking coverage. Accordingly, those rural carriers that have broader coverage than the national carriers may want to emphasize that and target dual-use customers.
Rural Competitiveness
Gillott believes rural carriers’ competitiveness against the larger national carriers has improved in the last few years. Three or four years ago, rural carriers were unable to get the most popular devices in a timely manner and in some areas, their network speeds were slower than those of the national carriers that were building out LTE. But things have changed and rural carriers are now in a stronger position, Gillott said.
“I cringe a bit when rural carriers say they can’t get the latest devices,” Gillott commented. “The iPhone 6 was available for the rural base a few weeks after the national guys.” And the situation with the Samsung Galaxy 7 was similar, he said. Additionally, many rural carriers now have deployed LTE.
Gillott also noted that some rural carriers may be able to offer something that three of the four national carriers can’t. Those rural wireless carriers that also have a local video business can bundle the services together. Of the Big Four national carriers, only AT&T — which now owns DirecTV — can make an equivalent bundled offer.
Gillott cautioned, though, that rural carriers wanting to gain market share against the Big Four may need to be prepared to offer price breaks – at least for a limited time – in order to get local residents to switch. The average rural wireless customer without children at home tends to stay with his or her current carrier because he or she believe switching would be too much trouble, Gillott noted.
“You’ve got to get them off the couch; you’ve got to get them to think about it,” he said.
Image courtesy of flickr user Alon.
