The first is by demographically-based segmentation attributes, and the second is through services offered. Neither of these is optimal for understanding and responding to unmet needs in the users bases, a point discussed in the following section of this paper.
Demographic segments include the following:
General Consumer/Residential: The largest segment of users, this is the segment that also generates the highest level of price competition and pressure in the market as well. Churn is highest in this segment.
Small and Medium businesses:
The primary segment where bundling is used for generating high loyalty due to the ability of members of this segment to overcome price pressure due to the need to have services in place to support their business models.
The most profitable of segments and also the more difficult to penetrate and sustain customers, AT&T Wireless has successfully served this segment with Wide Area Networks (WLAN) and hotspot technologies in addition to the roll-out of beta tests of 3G technologies.
The services segmentation approach is also heavily used throughout the telecommunications industry as well. These include the following:
Cellular Telecommunications Services: This segment includes but is not limited to 2G and 3G services and analog (1G) services. The primary uses within this key segment include voice and network access services.
Paging and Other Wireless Services: Referring to both one-way and two-way data communications sent to a wireless device, paging can now be considered an increasingly niche-based product.
Emerging Wireless Telecommunications Services: This segment includes WiFi, hot spot and metro wireless network support including industry-specific applications, for example the use of wireless networks in hospitals for example.
Strategies for Reducing Churn
Clearly the concentration on segmentation criteria on demographics or services sold is insufficient for finding the unmet needs of both consumer and commercial customers. A direct result of this lack of ability to find unmet needs is a major contributor to churn in the industry (Bienenstock, Bonomo, Hunter, 2004). Lessons learned from churn in Korean telecommunications market are applicable to the lack of needs-based segmentation also evident in the U.S. cellular market as well (Ahn, Han, Lee, 2006). Based on the research cited, presented are three strategies for minimizing customer churn through research-driven strategies.
Needs-based segmentation based on psychographics of customers - This is the first potential solution to the impending churn that AT&T Wireless will be facing as pricing becomes the preferred approach to creating differentiation on the part of competitors. Psychographics or the study of how consumers (from both consumer and commercial markets) assign themselves to market segments is critical as the foundation for finding out what unmet communication needs customers have. This includes event-based research including focus groups with youth groups and teenagers to see what their emerging unmet needs are as well.
Creating roles-based messaging for commercial accounts that tie into it architectures - the promise of 3G is that it has the potential, through information transfer speeds, to play an integral part on the convergence strategies in many corporate environments. Yet in the move to convergence in commercial accounts, there is the corresponding need to provide guidance on how to make roles-based workflows more effective for corporate accounts. Segmentation studies on this specific area have a very high potential Return on Investment (ROI) as insights from commercial accounts could lead to entire corporations standardizing on AT&T Wireless.
Development of CEO and CIO Advisory Councils with commercial accounts to gain insights into how 3G will impact their companies...
The company needs to break immediately from being focused on demographics or services sold for segmenting their market, and concentrate on how consumers and commercial users define their groups and unmet needs. The use of psychographics research for segmentation is yielding significant results across consumer packaged goods, services and manufacturing industries (Wang, Dou, Zhou, 2006). The use of psychographics as a research strategy will also lead to a more precise definition of unmet needs and their prioritization as well.
AT&T Wireless needs to gain these insights to guide their bundling efforts to reduce customer churn over the short-term and longer term customer profitability over the long-term. Psychographics will most likely develop segments including young consumers who are predominantly focused on Instant Messaging (IM) and texting, in addition to those consumers who are seen by others as content mavens, a term Malcolm Gladwell uses in his book the Tipping Point. Psychographics will also provide insights into the mainstream consumer segment that includes parents that have hectic schedules caring for their children while trying to keep a household running. In summary the solution to customer churn is in finding out about unmet needs through groups-based segmentation over purely demographic criteria applied to AT&T Wireless' segments.
Ahn, Jae-Hyeon Sang-Pil Han, Yung-Seop Lee. (2006). Customer churn analysis: Churn determinants and mediation effects of partial defection in the Korean mobile telecommunications service industry. Telecommunications Policy, 30(10/11), 552. Retrieved March 15, 2008, from ABI/INFORM Global database. (Document ID: 1166810491).
Allison, Kevin (2007, November). AT&T spills beans on faster 3G iPhone launch. FT.com,1. Retrieved March 17, 2008, from ABI/INFORM Global database. (Document ID: 1391331811).
Randolph Beard, George S. Ford, Richard P. Saba. (2006). An Econometric-Driven Merger Simulation: Considerations and Application. International Journal of the Economics of Business, 13(2), 217. Retrieved March 12, 2008, from ABI/INFORM Global database. (Document ID: 1149224251).
Robin Bienenstock, Paola Bonomo, Richard Hunter. (2004). Keeping mobile customers. The McKinsey Quarterly,(1), 9. Retrieved March 15, 2008, from ABI/INFORM Global database. (Document ID: 542491091).
Kenneth Cline (2008, March). Mobile Banking. Banking Strategies, 84(2), 36-45. Retrieved March 16, 2008, from ABI/INFORM Global database. (Document ID: 1436859391).
Wang, G., Dou, W., Zhou, N (2006). CONSUMPTION ATTITUDES and ADOPTION of NEW PRODUCTS: A CONTINGENCY APPROACH. American Marketing Association. Conference Proceedings, 17, 145. Retrieved March 18, 2008, from ABI/INFORM Global database. (Document ID: 1169416621).
Joan Engebretson (2006, October). What Telecom Megamergers Mean to Enterprise Customers. Business Communications Review, 36(10), 26-30. Retrieved March 17, 2008, from ABI/INFORM Global database. (Document ID: 1147281711).
IBIS (2007). Wireless Telecommunications Carriers in the U.S. Report 51332. IBISWorld. Research Firm. March 10, 2008. Retrieved March 17, 2008, from ABI/INFORM Global database. (Document ID: 1147281711).
Aurelie Lemmens, Christophe Croux. (2006). Bagging and Boosting Classification Trees to Predict Churn. JMR, Journal of Marketing Research, 43(2), 1. Retrieved March 12, 2008, from ABI/INFORM Global database. (Document ID: 1031334041).
Kharif, Burrows (2008, February). On the TRAIL of the MISSING IPHONES:About 1.7 million more have been sold…
Wireless Technology Is Difficult to Connect To Other Parts of Information Systems There are many challenging aspects to even the most fundamental system and process integration tasks within organizations that have standardized on a common platform. When platforms vary significantly by protocol and by technologies, as TCP/IP-based networks often do across any organization, integration becomes even more difficult. When the strategies and processes that organizations rely on to attain objectives are included
Wireless Broadband Technology Overview of Wireless technology Presently it is quite evident to come across functioning of a sort of wireless technology in the form of mobile phone, a Palm pilot, a smart phone etc. With the inception of fast connectivity in the sphere of commerce it is customary and useful to operate from central locations communicating with the remote branches, conducting conferences in remote places, discussing with every body at every
The second stage of the process will involve developing the stratospheric platforms that can be used in routing electric power from the power plants that will be established to the source areas scattered all over the world. The last stage will involve the full utilization of the space power technology where clean and efficient space power will effectively be used to light and power the world. While many of these
Wireless Local Area Networks The establishment of home and business networks desirous of upgrading to Wireless Local Area Network- WLAN confront with the problems of choosing from available alternatives. The vendors offer several products for sale that hovers around different wireless standards like 802.11a, 802.11b, 802.11g and Bluetooth. During the year 1997, the Institute of Electrical and Electronics Engineers -- IEEE developed the first WLAN standard. They termed it 802.11 in
Wireless Networking Phenomenon Today's world is faced with a myriad of challenging and complex issues that require advanced technological solutions. As technology becomes increasingly user-friendly and focused on the consumer, it is evident that users have become more dependent on wireless technological devices as mechanisms that promote convenience, survival, and economic prosperity. Devices such as cellular phones, laptop computers, and personal digital assistants have become absolute essential components for many consumers
Networking Wireless Options for the Production Building Lake View Chemicals has made the decision to implement a new wireless networking option for their production building. The requirement to move between different locations within their building to utilize more versatile portable computers as opposed to being mired at fixed workstations is the main objective. As an IT consultant for Aspen IT Services, I feel that as Lake View Chemicals explores the use of