- Consumer Cellular is leaning hard into the senior market at a time when the Big 3 are pushing customers toward apps and everything digital
- The company started opening its own retail stores about four years ago after losing Target as its main distributor
- Verizon remains Consumer Cellular’s biggest source of new customers, followed by AT&T and T-Mobile, largely reflecting the size and demographics of those carriers’ bases
News flash: Not everyone who walks into a cell phone retail store wants to be told to download an app before they talk to a representative. If that were the case, why not just stay home and summon a bot from your couch?
But that is exactly what’s happening.
“We're hearing all kinds of crazy stories that somebody walks in and before the rep will even talk to them, they make them download the T-Life app onto their phone,” said Consumer Cellular CEO Ed Evans. “Imagine this 75-year-old who walks in trying to get a question answered and they're trying to force this.”
For Consumer Cellular, this forced migration to digital customer service has resulted in a “pretty nice uptick” in new customers porting into its service, specifically from T-Mobile. But overall, the biggest pool that Consumer Cellular pulls its customers from is Verizon, which makes sense. It has the most customers.
The second is AT&T and the third is T-Mobile. That’s in part because T-Mobile is newer and it has a younger customer base. (AT&T is Consumer Cellular's host network under an MVNO arrangement.)
Consumer Cellular’s unique approach
At a time when big carriers are closing carrier-owned stores and pushing customers to use apps, Consumer Cellular is opening new stores and inviting to folks to stick around for a while.
Founded in Portland, Oregon, about 30 years ago, Consumer Cellular for many of those years relied on third-party retailers to distribute its phones and services. But shortly after private equity firm GTCR bought it about five years ago, its biggest distributor – Target – decided to longer carry Consumer Cellular’s goods and services.
(Consumer Cellular isn’t the only one; Fierce has learned that Target has pretty much halted wireless sales nationwide and Wave7 Research confirmed that wireless is dead at Target stores.)
Being a relatively small wireless brand compared to the Big 3, the removal of Target came as a blow to Consumer Cellular. In fact, they kind of panicked, according to Evans.
At the time, he was of the same opinion as most everybody else: Retail stores are expensive, with big labor costs and “all the headaches” that go into that.
But a visit to a rival’s store changed his mind. The experience – taking a number and waiting in line like everybody else, some of them in physical walkers – in that store in Surprise, Arizona, was so bad that he decided if Consumer Cellular was going to embrace retail, it needed to do so in a big way – and provide enough room in stores for customers to wait comfortably.
This past summer, Consumer Cellular celebrated the opening of its 100th store, this one in Salem, Oregon, not that far down Interstate 5 from where the company was founded all those years ago.
Consumer Cellular’s stores are usually around 3,500 square feet, providing plenty of room for sofas and chairs for customers to wait in comfort – or, as comfortably as anyone can get in a retail store setting.
Sure, Consumer Cellular offers a basic cell phone app for those who prefer that experience, but mostly, its product experience is set up around people who prefer to interact with real people. Evans’ goal is to open about 120 stores by year’s end.
Consumer Cellular’s target market is aging
Some industry analysts argue that businesses like Consumer Cellular that cater to seniors are digging their own graves: By definition, their customers are dying off.
However, flip that around, and the next generation is aging into it.
“As 40-year-olds become 50-year-olds and become 60-year-olds, they’re much more digitally savvy, right? I mean, they’re not going to be as resistant as the current cohort is, but we think there’s a real window for us to make some hay around this right now and use high-touch venues that we’ve created to really sort of capture some additional share. So far, that’s been working,” he said.
“Our churn is a little bit higher than what the Big 3 see, and a big part of that is mortality,” Evans said. “I haven't been able to fix that, but it's OK. There's plenty of them coming up. When you compare us to any other prepaid guy out there, our churn right now is running 1.24% so we're getting pretty close to where some of the Big 3 are right now, with a pool that's materially older.”
The average age of a Consumer Cellular customer is 66 to 67 years old right now, and “we feel pretty good about it, and it's continuing to grow,” he said.
Actually, Evans and his team are concentrating even more these days on the 70+ segment, as evidenced by its new Speakeasy brand that’s designed specifically for adults aged 75 and older; it features devices with larger buttons, loud speakers and plans starting at $14.95/month.
Another recent addition is the Iris Ally Go, a watch-style wearable that provides emergency assistance, similar to the Iris Ally pendant that it’s been offering for a while.
Jeff Moore, principal of Wave7 Research, said Consumer Cellular is smart to pitch medical alert devices. It’s in the same ball park as Lively, a brand sold at Best Buy stores that was formerly known as Jitterbug.
Some wireless industry old-timers will remember Jitterbug as the brand created by Great Call founders and industry pioneers Arlene Harris and Mary Cooper. At one time, GTCR actually owned Great Call before selling it to Best Buy.
The distinction between Lively and Consumer Cellular is Lively is largely focused on medical alert devices, with many users frail and under the care of their daughters and sons, Moore said.
That may increasingly be part of Consumer Cellular’s target market, but it’s also catering to active people in their 50s and 60s.
“In their ads, we see older people playing golf, biking and playing pickleball. That said, some customers may have been with Consumer Cellular 10-20 years and may be in need of a medical alert device,” Moore said.
AI serves a purpose – but it’s not everywhere
Customer service is a big part of serving this age segment; Consumer Cellular operates about five call centers around the country. It also uses AI to improve the customer experience – with a caveat, according to Evans.
“AI listens to every one of our phone calls and summarizes the call at the end of it and inserts that into the notes,” he said. “We use it as a coaching tool, so for each individual rep that's out there, it literally summarizes the call and then provides coaching guidance to them.”
But AI isn’t going to replace humans at Consumer Cellular. “I don't want AI talking to my customers. I want AI giving my reps the correct information,” he said.
Part of that is listening to what the customer is interested in. “You can't do it by just following a script. That isn't going to work. You've just got to listen to what they're asking you and then respond the right way,” he said.
Shortly after Chicago-based GTCR took over, he would listen to the calls that came into customer service and was struck that the average call lasted about 10 minutes – even when the customer’s issue was addressed almost immediately.
As the CEO, Evans saw an opportunity to change that and get call lengths down to four minutes, thereby saving the company some money.
But as he dug further into it, “I just sort of had this epiphany that this is just in our DNA,” he said.
People weren’t just calling to check on their payment. They wanted to socialize and talk about their grandkids for a few minutes.
“We’re not going to change that. We’re going to leave it alone. That’s going to be part of who we are,” he said, and it’s turning up in the customer satisfaction surveys.
“Our average call length is still nine minutes today. It's nine minutes and 30 seconds … It hasn't moved, and that's OK. We can make that work financially. It works for us. We understand it,” he said.
Read more about Consumer Cellular:
Consumer Cellular stays course in a topsy turvy market
Consumer Cellular kicks off new ad campaign
Consumer Cellular opens 2 stores in Florida
Consumer Cellular taking over Verizon space in 1,500 Target stores