Wireless Companies Need to Update Their Marketing Strategy

For those who use cell phones, it is a well-known fact that when you first join a wireless service provider, you can buy a phone at a very low price or even for free. But once you have used the company for a while, if you try to upgrade your phone to a newer model, you are charged a hefty price for it. Although some companies offer a discount on phones if you are willing to extend your contract, the discount is much smaller compared with what new customers get. Below is a comparison of the prices a new vs. existing T-mobile customer (i.e., me) would receive on the same phone models:

Phone | w/o Extension | w/ 2-year extension | New customers

Nokia 6103 | $149.99 | $49.99 | $0

Motorola W490 | $159.99 | $109.99 | $49.99

Dash | $399.99 | $267.99 | $149.99

One can envision the reason for charging a higher price to existing customers when, in old days, people were locked in to a company by their phone numbers. If you wanted to switch to a different wireless provider, you would lose your number. That was a significant switching cost for a consumer. Therefore, it took “sweeter” deals to lure people to switch. Now with the portability of phone numbers, such a switching barrier is no longer present. By still offering much lower prices to new signups, cell phone companies are essentially encouraging consumers to switch providers frequently rather than staying with one firm.

While firms do have a need to make a profit and should not give everything away, under the new business environment, it makes much more sense to reverse the pricing strategy and offer existing customers a deeper discount instead. From a customer relationship management perspective, it is much more economical and efficient to keep your existing customers rather than trying to chase after new ones. When a consumer’s existing contract is about to expire with a wireless provider, the provider should offer the consumer an incentive to happily stay rather than going back onto the market and starting to look for better deals from another provider.

In sum, wireless companies should adapt their existing pricing strategy to the new market environment and aim to build a more profitable business around a core group of loyal customers rather than “hoppers”.

Mentoring Doctoral Students

Increasingly, doctoral programs are encouraging or requiring their students to submit a paper to academic journals. The purpose is to familiarize the students with journal publication processes. I am very supportive of this practice, and I believe it better prepares a student for an academic life, where research publication is an important indicator of ability and productivity.

However, recently, I have seen poorly-written doctoral student papers being randomly submitted to the best journals just to receive constructive feedback such journals tend to provide. It is good to aspire to high-quality journals, and many doctoral students are well-positioned to publish their cutting edge research in such outlets. However, some submitted papers are so under-developed that they make you wonder whether any quality control has been done before the papers were let out of the gate.

I personally believe doctoral student advisors should try to do a better job mentoring their students in this area rather than pushing this responsibility to the journals. Without proper mentoring, this practice ties up precious resources at academic journals and further clog the already congested review pipe. I am not suggesting that doctoral students should not try to work on research targeted at top journals or should not submit their papers to journals. Rather, I suggest doctoral advisors help a student on two things before his/her paper is submitted: (1) be a first round reviewer, point out problem areas, and suggest ways of improvement; (2) help the student select an appropriate journal to submit the paper to. This decision can be based on the research topic, the methodology used, the rigor of the research, among other things. By strengthening the quality control before a paper is submitted, we as a discipline will be able to better utilize our resources to advance knowledge.

For doctoral students who are interested in learning more about the publication process, Journal of Consumer Research has put together a very nice set of manuscript review tutorials that you may find helpful.