consumer communication preferences 2012 - a coming paradigm shift that will change everything
TRANSCRIPT
Consumer Communication Preferences 2012Consumer Communication Preferences 2012
A Coming Paradigm Shift That Will Change EverythingA Coming Paradigm Shift That Will Change Everything
Mike Jude, Program Manager
Consumer Communication ServicesServices
February 15, 2012
Today’s Presenter
Mike Jude, Ph.D.Program Manager
Functional Expertise30 years of experience in telecommunications and IT which includes technology application, market
research, consulting, and operations management. Particular expertise in:
Decision Analytics
Market and Business Analysis
Developing Innovation and Encouraging Creativity
Industry ExpertiseExperience base covering broad range of sectors, leveraging long-standing working relationships
with leading industry participants’ Senior Executives in
Local Exchange Telephone Service Providers
Broadband and Wireless Telecommunications Providers
Network Automation Technology
Service Automation
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Program Manager Service Automation
What I bring to the TeamQuantitative and Qualitative Research Design
Decision Analysis
Public Policy Expertise
Career HighlightsExtensive expertise in Telecommunications and IT.
Management positions in several leading technology firms:
U.S. WEST, Denver, Colorado
SUN Microsystems, Broomfield, Colorado
EducationB.S.E.E. University of Colorado
M.E.E.M. University of Colorado
Ph.D. Walden University
Poll Question
How do you feel about the economy in 2012?
• The economy will collapse in 2012
• The economy will slowly improve over 2012 into 2013
The economy will improve substantially in 2012
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• The economy will improve substantially in 2012
• The economy will improve dramatically in 2012 into 2013
• Don’t know
Focus Points
• Consumer Survey
• Consumer Confidence and the Communications Spend
• The New Consumer Value Assessment Model
• Bundling: the Preferred Service Offering Approach
• Conclusions and Recommendations
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Consumer Survey
• Sample of 2052 residential communication consumers in
the U.S. and Canada
• Conducted in November, 2011
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• Results published in a report released last week
• Minimum resolution: +/- 5% at the 95% confidence level
Demographics of Consumer Study (Sample = 2052)
75% Caucasian 47% Married
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Mean income = $56,702 95% High School or Better
Source: All graphs from Stratecast
Critical Implications
• Consumer communication preferences undergoing a
paradigm shift
• Significant implications for communication service providers
and policy makers
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• Consumers are
• Worried about the economy
• Seeking greater value through bundled service packages
• Willing to switch providers to get what they want
Market Characterized by Consumer Pessimism
Uncertain
25.7%
Do you expect the economy to improve in the next
year?
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Source: Stratecast
Yes
26.4%
No
47.9%
N= 2052
This Pessimism Extends to Communications Spend
Yes
64.2%
No
27.4%
Is the economy making you more cautious in your
communication services spend?
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Source: Stratecast
Uncertain
8.4%
N= 2052
Consumer Communications Value Assessment has Shifted
Value shiftingto cost side concerns
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Source: Stratecast
Consumer Preference is Shifting to Favour Bundles
• How do you purchase your communication services (cable MSO
subscribers)?
50%
60%
70%
80%
90%
Individual service Package deal/bundled Do not purchase Purchase, but do not know if packaged
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Source: Frost & Sullivan
0%
10%
20%
30%
40%
50%
Basic TV Premium TV Free-On
Demand
Pay per View Music Telephone
Service
Internet
Access
N=1023
Service Bundles Drive Value Perception
• At the same price, would you prefer a bundled service or a stand
alone service?
Individually
24.2%
Don't know
12.5%
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Source: Frost & Sullivan
Bundled
63.3%
N= 2052
Service Bundles are Driving Churn
• If a service provider had a service bundle that included a service
you wanted, would you change service providers to get it?
Yes
38.3%
Don't know
27.3%
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Source: Frost & Sullivan
No
34.4%
N=128
30%
40%
50%
60%
70%
Very Unimportant
Unimportant
Somewhat Unimportant
Neutral
Price is Important, but Ease of Use is Nearly So
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0%
10%
20%
Neutral
Somewhat Important
Important
Very Important
N=1615
Source: Frost & Sullivan
Major Challenges
• Bundles are the standard for consumer communication services
• However the bundle value proposition is being judged on whether
it is comprehensive. Must cover:
• Voice
• Video
• Data
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• Data
• Mobility
• While price is the most important consideration, ease of use is
almost as important and likely drives the utility aspect of value
assessment
• Achieving the proper balance between services and pricing is
challenging, but critical
Recommendations
• Consumer research points in the direction of well integrated
service bundles. With consumer confidence at a low ebb,
the only way to increase spend and retain customers is to
focus on the bundle
• Bundles, though need to be comprehensive: features and
mobility must be a part of the bundle
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mobility must be a part of the bundle
• However, bundles can’t be simply patched together: ease of
use is essential
Next Steps
Develop Your Visionary and Innovative SkillsGrowth Partnership Service Share your growth thought leadership and ideas or
join our GIL Global Community
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For Additional Information
Mike Jude, Ph.D.Program Manager: Consumer Communications Services Stratecast | Frost & Sullivan(303) 466-2377 [email protected]
Ron Gherman
Consultant
Information & Communication Technologies
(210) 247-3826
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Gina Villanueva
Research Analyst
Information & Communication Technologies
(210) 247-2488