In Q4 2022, US postpaid carriers experimented with ecosystem promotional bundles that would increase users’ average monthly spend on their services and devices. Black Friday deals were available online and in stores through November and December, which aided the new promotional strategy.
Why should carriers and OEMS invest in ecosystem promotions?
Investing and creating a product ecosystem helps carriers and OEMs improve consumer loyalty and create new product and service revenue streams. A strong ecosystem enables them to offer products that co-exist, ensuring users’ needs are met efficiently while making them impactful players in the industry. Promotions aid in highlighting use cases and adding visibility to the new line of products that otherwise might be overlooked by the average customer.
Carrier promotional moves seek to increase ecosystem userbase
Last holiday season, postpaid carriers made a big push to increase their product ecosystems’ userbase. They advertised a variety of offers for Apple, Samsung, and Galaxy Pixel devices that included promotions on connected devices and accessories such as earbuds, pencils, and styluses if users added a service line on eligible devices. For instance, Verizon offered $40 off the Apple Pencil (2nd generation) when users purchased select iPad models with an unlimited plan. The carrier further offered a premium promotional bundle featuring a free smartwatch, tablet, and ear buds to users purchasing qualified devices in Q4 2022.
By offering deep device discounts to users when they purchase multiple service lines, the carriers are not only increasing users’ average spend but also keeping churn at bay. Users have to honor EIP clauses that typically run 24-36 months to remain eligible for the discounted device prices.
These promotions also encourage the average user to try new products at a low-cost threshold while ensuring a predictable recurring revenue stream for carriers.
OEM promotional moves seek to increase overall spend in-store and online
While Apple, Samsung, and Google encouraged users to increase their holiday spend with them by offering manufacturer gift cards with the purchase of certain devices, they fell short of promoting specific products. OEMs must capitalize on the opportunity to actively drive smartphone users to new product categories to increase their user base.
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While they should continue offering credits and gift cards that give customers shopping choices, they must also encourage product discovery by discounting related accessories and suggest pairing them with relevant devices during checkout. OEMs already utilize this strategy to promote their services (e.g., Apple offers three months of Apple+ TV service for free to all new product users).
Extending this policy to new device categories will help with adoption rates and increase their base. As ecosystems grow with new products and services, there will likely be a range of innovative and creative promotional strategies from all major stakeholders who are competing for the consumer’s wallet and mindshare.