Correspondence: Ken Kwong-Kay Wong, Universitas 21 Global 5 Shenton Way, #01-01 UIC Building, Singapore 068808 E-mail: kwong@u21global.edu.sg

¹is Assistant Professor of Marketing at Universitas 21 Global. He is also a recipient of the Faculty Excellence Award 2008, and was honored in all three award categories, including Outstanding Professor, Most Innovative Professor and Excellence in Online Education. Dr Wong has also taught marketing courses at the University of Toronto since 2003. He holds a DBA from the University of Newcastle, Australia and an MBA from Nyenrode Business Universiteit. His research interests include CRM and Online Education.

Received 14 March 2009; Revised 14 March 2009.

Abstract

In the competitive wireless telecommunications market, customer retention has become a priority to many carriers, as they face high customer acquisition cost and high churn rate. Prior literature has found that wireless customers often subscribe to inappropriate rate plans, and thus overpay for their services. A new database marketing strategy called 'Rate Plan Optimization' has emerged, but literature in this area is still limited. This paper aims to strengthen our understanding of this strategy by analyzing the potential moderating effects of customer's frequency of handset change, frequency of rate plan change, customer age and contract status on the linkage between rate plan suitability and customer tenure. The data set covers 1249 wireless users in Canada. The hypotheses are tested by factorial Analysis of Variance (ANOVA). This paper argues that except customer's age, all other factors being analyzed have positive moderating effects on the linkage.