My first car was a 10-year old Mazda Miata sportster, bought when I headed to college. I test drove the car, with the top down, and immediately fell in love with it. There’s nothing quite like the wind in your hair to close the sale… and to hide all of the strange noises that the car is making. End result, I became quite a regular at the local mechanics shop for the next few months. Clearly a longer test drive (and perhaps a rainy day to deter the desire to pop the roof down) would have been beneficial. And the same is true for mobile services; the longer the test drive, the more comfortable you become about the all-important network quality.
To address this, carriers all offer money-back guarantees within the first 30 days, but this is the equivalent of me buying the Miata and then taking it back. Yes, I get my money back, but I’ve already traded in my old car and need to start shopping all over again. And so to T-Mobile’s latest “Uncarrier” move: allowing you to test drive the service for a full week before you make a purchase. Potential customers sign up online and are sent an iPhone 5S, with unlimited minutes and data for a full week. At the end of the week, customers need to return the phone to a T-Mobile retail store, and if they are happy with the service, they can buy a new iPhone 5s or any other device at regular price.
The offer helps overcome a significant barrier to T-Mobile’s service: the perception that the network is not up to the task for many consumers. As such, it’s an ideal complement to T-Mobile’s Uncarrier strategy, which has been resonating well with consumers. The carrier’s contract-less affordable service plans and device upgrade programs have been a game changer in the mobile space, boosting the retail postpaid subscriber base by 3.5 million in the last four quarters when the three bigger rivals’ subscriber base grew by 4.9 million in total during the same time frame. And, unlike its rivals that banked on low-ARPU tablet activations for subscriber boost lately, almost all of T-Mobile’s subscriber growth came from phone activations.
Consumers are very well aware of the fact that T-Mobile offers the most affordable service plans, and even covers the early termination fee (ETF) if a customer decides to jump the ship before their contract expires. However, the NPD Connected Intelligence Mobile Connectivity Report reveals that the carrier still rounds out the bottom in terms of consumer perception on network coverage and speed. Only 2 percent of AT&T, Sprint and Verizon Wireless customers, in other words, potential T-Mobile customers, think that T-Mobile is the top carrier for network coverage. When the same question is asked to non-Verizon Wireless customers, 30 percent of them pick Verizon Wireless. T-Mobile is addressing this limitation with continuous network improvements (just announced 15 new markets with VoLTE coverage), and upgrades and the test drive initiative is a testament to the carrier’s confidence on its network. If the carrier can persuade those potential customers on rival networks to test drive its network for free, there is a good chance it will maintain the momentum it’s been enjoying for the last 12 months.
While my Miata sportster did have its teething problems during its tenure, the one thing that helped alleviate the pain was a mighty fine stereo. Indeed, apart from the roofless driving, the stereo was one of the major attractions (or blind spots) in my purchase decision. Music helps. And T-Mobile has realized the same thing; in conjunction with the test drive approach, T-Mobile has jumped into the streaming music business. No, it hasn’t made a stereo – or even a streaming music service of its own – but what it has done is make streaming far easier to digest: the data consumed by streaming music is now free, rather than being part of the monthly GB allocation. This applies to a plethora of music services including Pandora, iHeartRadio, iTunes Radio, Rhapsody, Spotify, and Slacker.
In addition, T-Mobile has built a new service, dubbed “Unradio” in partnership with Rhapsody (another Seattle-based company) that offers unlimited streaming songs with unlimited skips and no advertisement for $4/month (or free Unlimited Data plan customers). Considering the hype around music streaming lately (i.e. Apple’s $3 billion acquisition of Beats), the data-free unlimited music streaming offer should be a great differentiator for T-Mobile and a great value-add for its price-sensitive customer base.
All-in-all, T-Mobile’s Uncarrier theme has created a strong value proposition for consumers, and the carrier is continuously sweetening the deal with new incentives such as ETF bail, free data on tablets or data-free music streaming. And those users who are still questioning the network to make the switch, the one-week test drive on an iPhone 5S should give them peace of mind.