Take a look at the marketing communications of your typical mobile marketer and what do you see? That’s right, lots of young people laughing and brandishing mobile phones like they were the hottest thing since the iPhone. But take a look outside on your typical high street and what do you see. That’s right, lots of older people struggling with microscopic keypads and overcomplicated menus on their ill-designed phones.
The trouble with most mobile telecoms marketing is that it totally ignores real customers in favour of target customers. By target customers I mean those aged between 16 and 30 years of age. And this problem doesn’t only apply to the mobile phone industry. Just look at car adverts and you see the same problem.
The latest blow to older people is the refusal of UK mobile providers to provide a mobile handset specifically designed by Austrian company Emporia for older people. According to the BBC News, the industry has been accused of Ageism by Age Concern and other charities.
But does the refusal of UK mobile telecoms providers to cater specifically for older customers make sense?
POPULATION
According to UK Government population statistics, the biggest population group are people aged 30-44 with 22% of the population, followed by 45-59 with 19%, 16-29 with 18% and the over 60s with 16%. The biggest population group is clearly people older than 45 with over 40%. The young people typically depicted on mobile telecoms marketing accounts for only less than 20%. And as the UK rapidly ages, the number of older people will continue to increase as the number of younger people decreases.
So older customers are not only the largest single group of customers, they are also the fastest growing group too.
USAGE
According to the recent Mobile Life 2006, survey the heaviest users of mobile telephones for SMS calls are people aged 16-29 with 7 SMSs per day on average, followed by 30-44 with 4, 45-59 with 3 and the over 60s with 1. However, all age groups up to 60 make only 3 calls per day on average.
So younger customers are heavier users of SMS and voice services, but not significantly more. And with hundreds of SMSs and minutes of voice calls for as little as GBP20 per month, that doesn’t mean that younger customers are any more profitable than older ones.
MARKET PENETRATION
According to 2003 OFCOM statistics, the population group with the highest penetration of mobile services are people aged 16-29 with 90%, followed by 30-44 with 89%, 45-59 with 70%, and the over 60s with 60%with 60%. The biggest population group is clearly people older than 45 with over 40%. In practical terms, 70% penetration already covers the entire addressable market with one mobile. So over 70% includes second and third mobiles.
Practically all younger customers already have one or two mobiles, so the only way to increase their penetration is to sell them yet another mobile or to poach them from another provider. Recent analysis of one UK mobile operator’s P&L showed that they spent over GBP100 million acquiring new customers to replace the ones they had lost to other operators in the past year. 100 million!
So older customers are the group with the greatest market potential.
Putting it all together, although young people use mobile telecoms more than older people, they already have one or more mobiles, they get most of their SMS and voice calls on a cheap flat rate and they are a declining group in the market. In contrast, older people are a group with plenty of growth potential in terms of population growth, usage and penetration, but only with products and services that suit their lifestyles and their faculties.
The failure of UK mobile telecoms providers to clearly differentiate their products and services across different market segments in the population shows a serious lack of marketing imagination. Perhaps it is time for some fresh marketing blood from other industries to be infused into the mobile telecoms industry.
What do you think?
Are mobile telecoms providers doing a great job at marketing? Or are they just stuck in the acquisition-churn-reacquisition game with young customers?
Post a comment and get the conversation going.
Graham Hill
Independent CRM Consultant
Interim CRM Manager
Behing this is the idea that once a prospect is a customer, he/she will repurchase with the company. So the goal is to get the biggest share of first buyers and then only invest in loyalty.
The best examples of this strategy being banking and automobiles. But a little fresh thinking on this would be useful indeed.
Well, I think it would be very nice, if mobile telecoms could concentrate more on older people. But this maybe involves a general problem. These companies produce technical devices, which are crowded with functionallity and young people are simple the customers with the greatest potential to use them. And this is the main problem here. If people grow older, it’s harder for them to learn how to use the new devices. Most of them don’t need big functionallity. There’re looking for simple devices which are easy to use and don’t have much functionallity. But this conflicts with the strategy of technology companies and it’s very questionable, if they should change their strategy. In my opinion they’re supposed to advance in technology. If we oneday have computers with strong artifical intelligence, the devices will become smart enough, so that older people can use them without having to learn anything. Then they’ll really profit from the potential of new technologies and then they’ll maybe be the most important customers, i think.