Satisfaction Study Again Puts Virgin Mobile At Top Of Prepaids

by Laurie Sullivan, Aug 24, 2007, 5:00 AM

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Virgin Mobile has received kudos via J.D. Power and Associates' 2007 "U.S. Wireless Prepaid Customer Satisfaction Study" released Thursday. It ranks the company No. 1 in prepaid wireless satisfaction for a second consecutive year, outshining others in cost of service, account management, initial activation and service plan options.

"It's interesting that Virgin Mobile can consistently score as high as they do," says Kirk Parsons, senior director of wireless services at J.D. Power and Associates. "Particularly in the wireless industry, it's difficult to be consistent in service because there are so many things that can go wrong like software glitches, network and product problems, and customer care issues that require constant attention."

Also ranking above industry average are AT&T GoPhone, Boost Mobile and T-Mobile To Go, respectively. Prepaid offerings from Tracfone Wireless, Alltel, and Verizon Wireless fell below the average.

The study measures customer satisfaction among prepaid wireless service. It considers call quality, company image, service cost, account management, initial activation, service plan options and customer service. Overall satisfaction improved by 10 index points since 2006 to 727 on a 1,000-point scale.

The study finds that the availability of new services and better pricing options contributed to the increase. It also recognizes that call quality improved by 14 index points since 2006--particularly specific to connection and quality-related issues, such as local calling area and ability to place or receive calls inside buildings.

Brand image has become important, too. In the study, it represents reputation, honest advertising and other related factors, accounting for 19% of the ranking. It takes the No. 2 spot behind call quality at 24%.

"It's important, especially for the smaller carriers," says Parsons. "Larger carriers advertise more and have been around a lot longer. So when someone goes out to look for a carrier that offers prepaid service, you look at their reputation. You want to know they're going to be around next year."

Virgin Mobile wants that too. So the company launched the "You Rule" teaser campaign last May, targeting specific New York boroughs and professions with ads posted to Manhattan billboards, before expanding the message nationwide in July. The national ad campaign taps into print, TV, viral marketing, and local hometown messaging in select markets.

The "You Rule" campaign reflects Virgin Mobile's attitude that month-to-month plans can offer flexibility and better service than two- to-three-year contracts. They speak directly to customers who don't want a contract. And that type of flexible cellular service can get a bit tricky. "We have to earn our customers' respect daily, and can't really depend on our ad budget to attract customers," says Virgin Mobile spokesperson Jayne Wallace.

Durham, N.C.-based McKinney designed the "You Rule" campaign around Virgin Mobile's commitment to customers, rather than the customers' commitment to cellular carriers. Analysts think the concept works, considering that Virgin Mobile's yearly ad budget pales compared with the "big guys." This year's ad and marketing campaign investment ranges between $30 million and $35 million, whereas AT&T and Verizon might spend double that amount, Wallace says.

Wireless carriers combined spent more than $1.5 billion in advertising from January through May 2007, according to Nielsen Monitor-Plus.

Parents appreciate stability from carriers that offer prepaid plans for kids under 18 who haven't learned the concept of quelling talk times. "Kids can talk you into bankruptcy without control mechanisms in place," says Roger Entner, senior vice president/communications sector at IAG Research. "Virgin's message aims at today's youth and their parents, and companies that put effort into messaging get rewarded."

The 2007 Wireless Prepaid Customer Satisfaction Study is based on responses from 2,925 wireless customers who subscribe to prepaid service plans. Findings are based on surveys conducted in January and April 2007.

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