Cutting the (Phone) Line: 5 Marketing-Related Factors to Consider

Market Research Insights

Roughly three out ten US households have cut their phone lines and are cell phone only according to a report from Citi Investment Research by analyst Jason Bazinet. Getting rid of the household phone line, referred to in the industry as “wireless substitution”, occurs at a rate of 5% per year. Further, one out of every seven households with both cell and landlines predominantly used the wireless phone. These households are likely candidates for cutting their landlines.

Currently, the highest concentration of mobile-only households is those headed by twenty-somethings. Having watched my parents’ reluctance to buy and use cell phones change as they understood how these devices could improve their lives, I believe that the wireless substitution rates will accelerate across age groups.

Since many forms of marketing rely on calling landlines and/or use information derived from landlines, this phone evolution has important marketing implications for a diverse set of organizations, including not-for-profits, political groups and the government. Here are five marketing factors to consider.

Area codes don’t necessarily correlate with location. Gone are the days when someone with a 212 area code actually lived in New York or someone with a 415 area code actually lived in San Francisco. Since consumers have the option of porting their phone number to a cell phone, their physical location is no longer certain.
Phone numbers are no longer useful for checking addresses. Since mobile phone numbers are unlisted, the telephone book, formerly known as the white pages, isn’t the useful database that it once was. This has an impact on diverse organizations such as the US Census Bureau upon whose surveys government spending and voting districts are allocated. Also, local businesses that depend on phone numbers to look up delivery addresses must create their own database.
Mobile phones are personal. Each is associated with a specific person, not a household. People living in the same residence, whether they are related or not, may have multiple phone numbers. From a marketing perspective, this means that you need permission to contact prospects and consumers by phone and must build your own database.
Mobile phones provide more than real time conversation capability. Cell phones allow communication via text or SMS. High-end smart phones also enable other forms of communication such as emails. Marketers must build opt-in databases of prospects and customers across multiple communications devices and note how consumers want to interact with them.
Mobile phones often have GPS and location based applications. This allows owners to get directions, find establishments like stores and restaurants, and locate friends and colleagues who are nearby using applications such as Geodelic and Foursquare. For local businesses, this translates to the need to have a mobile web version of your website to capture the maximum audience. At a minimum, your address, hours and phone number must be easily found by people using mobile devices.

As mobile phone usage continues to evolve, marketers will need to adapt and find new ways to connect with their prospects and customers via wireless devices. Given that the US economy is still challenged and many consumers have one or more mobile phones, it’s a good guess that this trend will accelerate.

How do you think that wireless substitution will affect your marketing? Please leave your thoughts in the comments section.

Happy marketing,
Heidi Cohen