As the economical crisis worsen worldwide, more and more people reduce their expenses by obligation in many cases and also by choice (preventive approach). The companies that benefit from that trend are as usual the ones that are in phase with the evolution of the demand and now more than ever these are the so called low cost types companies. In the case of the US cell phone industry, companies that can offer inexpensive easy to cancel services are reaping the benefits. Cricket Communication (parent company is Leap Wireless International, Inc. (NASDAQ:LEAP)) is an example of a company that takes advantage from this trend. The service they offer do not present a huge array of options for the consumer but a simple no contract dependable offering. For many customers who have learned to tighten their budget, this is a very attractive offering. At a time when many companies are losing money and market share, Cricket is actually extending its market coverage through a series of agreement with other carriers and claims to be largest low cost carrier.
“Premium Extended Coverage gives Cricket customers the advantage of the largest unlimited roaming coverage area of any low cost, unlimited carrier,” said Doug Hutcheson, Leap’s president and CEO. “This is a great added value for our customers since they now have unlimited calling in major metropolitan areas where they might visit for work or pleasure. The launch of PEC is another example of how Cricket consistently looks for opportunities to increase the value of our offerings and better meet customer needs.”
Our review of Cricket shows a simple offering with few options at a very competitive pricing. The cons are that the coverage is not yet national and also that a $15 fee applies when you sign up (most prepaid cell phone companies have waived sign up fees).
The lesson for marketers in a depressed economy and a very competitive marketplace is that cheap and flexible (no string attached) has become a “differentiation” in itself at least for now; it may not be very sexy but it works, the time of large offering and long term contract with top of the line phones has for now lost its appeal.