Non-contract Plans Look A Lot Like Contract Plans


Non-contract wireless plans are beginning to look a lot more like the contract plans, with nearly half of non-contract owners using monthly -- rather than pay-as-you go -- programs.

According to a new study from J.D. Power & Associates, 49% of non-contract plan customers have monthly plans, many of which now mimic traditional contract plans and offer benefits such as unlimited calling and texting, compared with 30% in 2008. The increase can be attributed to a combination of cost savings and increased service offerings, as well as positive recommendations from existing customers.

"Over the last couple of years, [the non-contract providers] have replicated the service plans of the contract providers," Kirk Parsons, senior director of wireless services for J.D. Power, tells Marketing Daily. "Those types of plans are becoming a lot more popular."



According to J.D. Power, overall satisfaction to no-contract monthly service plans (762, on a 1,000-point scale) is comparable to pay-as-you go plans (768). (In 2009, the satisfaction difference between the two was 14 points, according to Parsons.) These higher satisfaction levels may also drive customers to purchase additional products and services. According to the study, 53% of non-contract customers said they were likely to purchase additional products or services offered by their current carrier over the next six months. Overall satisfaction index points for those customers were 90 points higher, on average, than those who said they were content with their current plan and/or equipment.

On average, non-contract customers spend $32 less per month than customers with contracts, according to the study ($60/month vs. $92/month). In addition, nearly 40% of contract customers who said they were likely to switch over next year intended to choose a non-contract service, according to the study. And, Parsons points out, many of the no-contract providers are able to provide smartphones and data plans that rival the contract providers.

"It used to be the idea of having a contract plan was that you have better phones and service, but that has changed," he says.

Among the non-contract companies, Boost Mobile scored highest in overall customer satisfaction, with an index score of 808. Also ranking above the industry average of 765 were: Metro PCS (792), Tracfone (789), Net10 (780), Virgin Mobile (773) and T-Mobile To Go (769).

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