Mobile Phone Promotional Offers Have Little Impact on Customer Satisfaction and Loyalty

ROCHESTER, N.Y. – March 31, 2006 – A new Harris Interactive^® survey shows that two-thirds (66%) of U.S. adult mobile phone users comparison shop for wireless service providers, with more than two in five (43%) beginning to do so two months before their contract expires or less. While providers are having some success with promotional offers (29% of mobile phone users who receive promotional offers have responded to at least one offer over the past two years), these offers do not stop most from comparison shopping and also have little impact on customer satisfaction. The survey also shows that there can be too much of a good thing as many subscribers who receive offers would like to receive them less often than they currently do.

These are some of the results of the Harris Interactive^® Winter 2006 Telecommunications Report titled "Hot Issues Facing the Industry." The study was conducted online from January 19 to 25, 2006 among 1,067 U.S. adults, of whom 865 are current mobile phone users.

Two in five (40%) mobile phone users say they receive promotional correspondence from their wireless service provider at least once a month or more often. Another third say they receive them once every three months (21%) or six months (10%). However, if they had their say, only 12 percent would elect to receive them at least once a month or more often, while 30 percent would want them about once every three months and 20 percent would want them about once every six months. One in five (20%) say they would never want to receive any offers.

While frequency certainly affects promotional offer success, so does the mode in which the offers are delivered. Among mobile phone users who receive promotional offers, if they could choose, many would like to learn about offers via printed materials, either by mail at home (22%) or as an insert with their bill (23%). Almost a third (31%) would like to learn about them through an opt-in email, such as an e-newsletter.

If providers hope their promotional offers will cut down on the number of subscribers who comparison shop and increase customer satisfaction, they are in for a let down. Most (98%) mobile phone users who receive promotional offers and comparison shop say these offers do not stop them from comparison shopping. Furthermore, 85 percent of those who receive promotional offers say these correspondences do not leave them feeling any less nor any more satisfied with their wireless service provider, and 84 percent say they do not leave them feeling any less nor any more valued. In fact, these offers have the opposite effect on some as nine percent of those who receive offers say they make them feel less satisfied and eight percent say they make them feel less valued.

Joe Porus, Vice President and Chief Architect for the Technology Research Practice at Harris Interactive comments: "Wireless service providers are eager to hang on to current customers and to lure new ones into their grasp. However, the survey shows that many providers are reaching out to consumers too often and may not be sending these offers out at the best time. Promotional offers may be more persuasive if they were received within the 60 day ‘shopping clock’ before a contract expires, which appears to be the time where the largest proportion of subscribers are out seeking a better deal."

"At what point do you begin to comparison shop for wireless service providers?"

Base: Current mobile phone user

"How frequently do you receive promotional offers, informational notices, bill inserts, special mailings, and/or personalized correspondence from your current wireless service provider?"

Base: Current mobile phone user

Note: Percentages may not add up to 100% due to rounding.

"Ideally, how frequently would you like to receive promotional offers, informational notices, bill inserts, special mailings, and/or personalized correspondence from your current wireless service provider?"

Base: Those who receive promotional offers

"If you could choose, how would you like to learn about promotional offers, informational notices, bill inserts, special mailings, and/or personalized correspondence from your current wireless service provider?"

Base: Those who receive promotional offers

Note: Percentages may not add up to 100% due to rounding.

"How do these promotional offers, informational notices, bill inserts, special mailings, and/or personalized correspondence impact your satisfaction with your current wireless service provider? Do they make you…?"

Base: Those who receive promotional offers

"When you receive these promotional offers, informational notices, bill inserts, special mailings, and/or personalized correspondence, do they make you feel valued as a customer by your current wireless service provider?"

Base: Those who receive promotional offers

Note: Percentages may not add up to 100% due to rounding.

"Do these promotional offers, informational notices, bill inserts, special mailings, and/or personalized correspondence stop you from comparison shopping?"

Base: Those who receive promotional offers and comparison shop

"Over the past two years, how many of these offers have you actually responded to?"

Base: Those who receive promotional offers

Harris Interactive^® conducted the online study from January 19 to 25, 2006 among a nationwide sample of 1,067 U.S adults (aged 18 years and over) of whom 865 are current mobile phone users, 722 receive promotional offers, and 501 receive promotional offers and comparison shop. Figures for age by gender, race/ethnicity, education, region, and household income were weighted to reflect the total U.S. adult population. Propensity score weighting was used to adjust for respondents’ propensity to be online.

In theory, with a probability sample of this size, one can say with 95 percent certainty that the results for the overall sample have a sampling error of plus or minus 3 percentage points of what they would be if the entire U.S. adult population had been polled with complete accuracy. Sampling error for the various sub-sample results is higher and varies. Unfortunately, there are several other possible sources of error in all polls or surveys that are probably more serious than theoretical calculations of sampling error. They include refusals to be interviewed (nonresponse), question wording and question order, and weighting. It is impossible to quantify the errors that may result from these factors. This online sample was not a probability sample.

About Harris Interactive^® Technology Research
The Harris Interactive Technology Research group doesn’t just monitor and measure the industry, it interacts with the thought leaders who drive technology, telecom and e-business everyday and provides insights from a variety of vertical perspectives. Using the group’s unique knowledge, experience, and expertise in both the telecommunications and information technology sectors, Harris Interactive asks the right questions, confirms business issues, designs and implements studies to provide clients with actionable results.

Harris Interactive Inc. (www.harrisinteractive.com), based in Rochester, New York, is the 13^th largest and the fastest-growing market research firm in the world, most widely known for The Harris Poll^® and for its pioneering leadership in the online market research industry. Long recognized by its clients for delivering insights that enable confident business decisions, the Company blends the science of innovative research with the art of strategic consulting to deliver knowledge that leads to measurable and enduring value.

Harris Interactive serves clients worldwide through its United States, Europe (www.harrisinteractive.com/europe) and Asia offices, its wholly-owned subsidiary Novatris in Paris, France (www.novatris.com), and through an independent global network of affiliate market research companies. EOE M/F/D/V

To become a member of the Harris Poll Online^SM and be invited to participate in future online surveys, go to www.harrispollonline.com.

Jennifer Cummings
Harris Interactive
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