Cell phones have become a necessity of life, but extended contracts no longer are. While the vast majority of current cell phone users are tied into long-term contracts, recent data supports that two out of every three new customers are opting for pre-paid or pay-as-you-go plans instead. What is the cause for this recent trend? The following are some of the more logical explanations.
1. Less Expensive
Free with 30-year contract
Pay-as-you-go or pre-paid plans can be incredibly beneficial for a very specific group of users. While this fact hasn’t changed in the last five years, the state of the economy certainly has.
Many cell phone users are switching to pre-paid plans as an easy way to trim their monthly budget. Although less costly plans generally provide fewer minutes, the majority of people making this switch only use their cell phones minimally, meaning pay-as-you-go plans make the most sense for them anyway.
Another group of people for whom pre-paid plans make the most sense are senior citizens. In the past, many of these customers just opted to go without a phone at all, but the recent technological empowerment of the baby-boomers has changed all that. Now that Grandma is on Facebook, there is no reason for her to think she can’t handle a cell phone, which is why many of the new pre-paid customers are older Americans.
2. Better Phones
I like the gray one.
Once upon a time, the options for pre-paid handsets ranged from bad to much worse. Now, the variety of pre-paid cell phones available rivals the selection offered by many long-term providers.
Many pre-paid providers now have storefront locations and mall kiosks that highlight a dozen different brands of cell phone. Not only that, but many pay-as-you go providers also offer Smartphones, and a few carry BlackBerry and Android phones now, and more will in the near future. While the hardware offered through pay-as-you-go plans used to be considered outdated and lame, the handsets available now are top-of-the-line. With qwerty keyboards, touchscreens, and Smartphones, the options for pre-paid phones are matching the desires and needs of customers today.
3. Data plans
Little did Alexander Graham Bell know, his replacement for the telegraph would soon become a shinier telegraph…
A Smartphone doesn’t do much good without the network to back it up, and pre-paid and pay-as-you-go companies are proving to be contenders in coverage.
Pre-paid cell phone service used to offer the bare-bones minimum to customers who just wanted something to fill their glove box. Because of this, texting plans were expensive, and data plans were non-existent. However, since texting has quickly caught on as a viable (and in many cases preferred) form of communication, and since most pre-paid carriers now offer Smartphones, hefty data packages are available and affordable, giving pre-paid companies a huge advantage.
4. Overall Availability
Once something is carried by retailers, it is only a matter of time before everyone in the country has the item, which is part of the reason why pre-paid cell phones are more popular than ever.
While many pre-paid companies operate stores and kiosks on their own, almost all pre-paid companies have some sort of presence inside of major retail chains. Some stores have cell phones available for purchase and activation. The average customer is far more likely to purchase something that they stumble across; meaning putting pre-paid cell phones where consumers are is a much better strategy than trying to get the consumers to come to the pre-paid cell phone stores.
5. “Donald Draper Doesn’t Have a Contract”
I’m not signing this.
Diehard fans of Mad Men need no explanation, but the rest of the world might. Donald Draper, the best advertising man in the city of New York, operates without a contract. His reasoning is simple, human, and explains why many people are making the switch to pay-as-you-go.
A contract is a prison. It is an iron-clad, paper prison that can take minutes to get into and years to get out of successfully. Operating without a contract makes you far more valuable. Everybody wants you, but nobody can have you, Draper would say. But how does this relate to cell phone service?
This moment will haunt you for years.
Ask any customer of any major long-term provider about their overall satisfaction, and universally they will tell you that they hate their lives. It seems as though nobody actually likes their cell phone provider, and that there is little or nothing anyone can do about it. Breaking a contract is a far bigger headache than living with it; so many people just complain and do nothing.
However, if you are on a month-to-month plan, both you and the provider know that your business is fleeting. Pre-paid providers constantly work for your loyalty and business by offering discounts on phones and unlimited plans. You could leave their business at any time, giving you all the power and keeping your cell phone company working for your satisfaction. Although the idea of the customer always being right seems outdated, it is classic, refined, and still works.
Although pay-as-you-go plans seem to be an easy choice, they may not be for everyone. Because there is no guaranteed length of contract, pre-paid providers will not pay for your handset, meaning the up-front cost may be greater than with a long-term provider. Luckily, pre-paid phones frequently have sales, so that everyone can get great service without a contract. In many cases, pre-paid service is not beneficial for those who use significant amounts of minutes each month, or who need nationwide coverage. Cricket, for one, offers the best of both worlds: featuring unlimited minutes and texting, this option is perfect for everyone.
Pre-paid phones are not without drawbacks, they are certainly worth researching, as everyone’s personal needs are different. Whether or not they are ideal for you, pre-paid plans are becoming more ideal for a majority of people. These five reasons highlight why, and how the market has changed.
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