If 2018 was “The Year of Unlimited Data Plans” for wireless carriers, 2019 is “The Year of 5G.” Ever since 4G came into reality about eight years ago, there was anticipation about the next big thing—gigabit speeds and full-length movie downloads in seconds. Finally, 5G is here. Kinda.
Although Verizon launched a home broadband service using 5G technology last year and AT&T brought 5G service to a dozen cities, we won’t see the launch of actual 5G mobile networks—and phones that will work on them—until later this year. 1 And all the leading carriers are focused on being first to put it all together.
In the meantime, there’s another competition—the ongoing battle for customers. In the first half of 2018, as Sprint and T-Mobile fine-tuned and filed their merger application with the FCC, wireless provider promotions continued to lean heavily toward unlimited data plans, unlimited streaming video and reimbursement of fees.2 During the same timeframe, Hawk Incentives conducted a study with research firm Leger in hopes of learning what types of promotions consumers find most attractive—in general, and within specific industries. One of the key verticals we looked at in this study was wireless phone service.
What Motivates Consumers to Make the Switch?
Wireless service providers have a variety of promotional tools to leverage in new subscriber and win-back campaigns. In our survey, we specifically addressed rebates offered to cover the cost of switching providers, bill credits given to offset the fees that accompany a switch in providers, equipment discounts, free accessories and free digital assistant service.
When asked which of these incentives they would prefer (“Select all that apply”), 60% of respondents selected the rebate delivered as a physical reward card within three weeks, and 54% selected the rebate delivered as a digital reward within one week.
While wireless rebate promotions incorporate factors that generally keep fulfillment timelines on the longer side—which customers are used to—that one-week timeframe is not outside the realm of possibility. Digital rewards eliminate production time (and costs) and drastically reduce delivery time.
An example: Imagine the wow-factor for your customer when she receives her rebate in the form of a virtual prepaid card on the very device she just purchased from you, and is able to instantly port it to her mobile wallet. In this scenario, you’ve wiped out your production and shipping costs, and delighted your customer by putting the latest virtual reward right on her smartphone.
Data comparison shows increasing consumer desire for rebates
As this was the second year we ran the “Consumer Incentives by Vertical” study, we compared the results with those from last year’s survey. The most interesting trend we saw was that more respondents this year are actively searching out products with rebates.
They’re also more likely to agree that rebates:
- catch their attention as they research a product online
- make them feel as if they’ve caught an exclusive sale
- represent great savings opportunities
Interestingly, respondents who told us rebates make them feel like they caught an exclusive sale were more likely Millennials than GenXers or Boomers.
Rebates can help build customer base and boost ARPU.
If you handle marketing, promotions or a loyalty program for a wireless service provider, you know that positive reviews and customer referrals translate into new customers, and gathering more data from your customers can mean greater ARPU. One of the biggest advantages to running a rebate promotion as opposed to offering a bill credit, discount or other type of promotion is the fact that the rebate submission process lets you build in activities that can net you new leads and new marketing opportunities.
During our survey, we asked participants how willing they would be to write a review, recommend a service or provide additional data in order to obtain a rebate. Incredibly, 90% of respondents said they would be willing to do at least one of these tasks.
Another 2018 Hawk Incentives survey—this one conducted by the Aberdeen Group—asked marketers and loyalty program managers what drives them to run a rebate promotion as opposed to a discount or other type of promotion. The top response given:
“[Rebates help me] collect more customer data, allowing my company to personalize future buyer interactions and/or better understand buyer personas and purchasing habits.”
For the wireless carrier, this translates into increased ARPU. In fact, respondents reported a 6.1% increase in average profit margin per customer with rebate promotions versus discounts.3
So, should your next consumer campaign include a rebate?
Following their evaluation, the Aberdeen Group created a checklist based on the research data that offers marketers and program managers a set of six factors to consider when deciding between a rebate promotion and another type of marketing promotion. You can download the one-page checklist through the form on this post and use it to help you determine your best course of action.
If you've already decided to go with a rebate, but haven't yet chosen a provider, you may be interested in reading our post on how to evaluate a potential rebate provider.
And if the word “rebate” evokes images of cutting out bar codes and filling out long forms, check out our infographic to discover how technology has reshaped the rebate experience and made it lightyears better for both consumers and marketers.
Key takeaways for wireless marketers and program managers
The buzz surrounding the coming of 5G has carriers, industry analysts and, yes, consumers excited and eager. One or two carriers may be the first to get there, but they won’t stand alone for long. As soon as all players have suited up for the game, the playing field will once again become level.
Our research proves time and again that we are now a nation of deal-seekers. Regardless of income, consumers have become addicted to the rush that comes with having found the best smartphone, the best plan or the best value. So, as you plan your 2019 promotional calendar, keep the following in mind:
- Your marketing and loyalty promotions will be as important as ever in helping your company differentiate itself from the competition
- Rebates remain a strategic differentiator for marketers, and present longer-term marketing opportunities that don’t come with other types of promotions
- If you haven’t already looked into digital reward options, it’s time
An online survey of 1515 Americans was completed between January 25 and February 05, 2018, using Leger’s online panel, LegerWeb. The margin of error for this study was +/-2.5%, 19 times out of 20.
1. Tom’s Guide, “The Truth About 5G: What’s Coming (and What’s Not) in 2019” January 11, 2019.
2. Federal Communications Commission, “20th Annual Mobile Wireless Competition Report.” September 27, 2017.
3. The Aberdeen Group, “Next-generation Promotions: Foster Customer Engagement & Maximize Marketing Effectiveness.” Survey of 212 organizations conducted between February and March 2018.