NEW YORK-The direct connection between a consumer’s choice of wireless services and a carrier’s own brand and retail stores is growing, even with the advent of the Internet and expansion of indirect sales channels.
At the end of 1998, 52 percent of wireless customers picked the service provider first before considering any other aspect of their purchase, according to J.D. Power and Associates, Westport, Conn. That total represents an increase of 7 percent compared with figures for the end of 1996.
“By keeping sales in-house, the carrier can control the information process and sell at higher margins,” Peter Dresch, director of telecommunications market analysis for J.D. Power, said.
Store location was the first priority in the decision-making process for 25 percent of consumers in 1998, down from 30 percent two years earlier. The handset brand was the main priority for 23 percent in 1998, versus 25 percent in 1996.
Company direct sales channels accounted for 80 percent of all wireless services purchased in 1998, up from 68 percent in 1997 and 54 percent in 1996, J.D. Power reported. Within the category of direct sales channels, carrier stores were the most important, followed by booths and kiosks, in-person sales representatives and telephone sales. At the bottom was toll-free call centers, which dropped in importance to 2 percent from 5 percent in 1997.
During the same period, indirect sources declined dramatically in importance-to 20 percent last year from 32 percent in 1997 and 46 percent in 1996. National electronics stores accounted for 7 percent in 1998, while local electronics stores accounted for 4 percent.
“Overall, customers of direct channels are significantly more satisfied with the entire sales process compared with those going through indirect sources,” J.D. Power said. “Customers who receive one-to-one contact, such as with sales representatives, are more satisfied than (with) less direct methods, such as (carrier-operated) booths.”
Furthermore, customers who buy their wireless service through direct channels spend an average of $67 per month and make and receive an average of 59 wireless calls per month. Those who purchase the service through indirect channels spend an average of $54 per month and place and receive 42 calls per month, according to J.D. Power.
Those who buy directly from carrier sales representatives generally are more experienced with wireless communications and are likely to use wireless for business purposes. Carrier-operated outlets like kiosks and toll-free call-in numbers “tend to attract less-experienced personal users, who spend less,” the J.D. Power study said.
