how do consumers perceive corporate mergers?
TRANSCRIPT
How Do Consumers Perceive
Corporate Mergers?
Anjali Lai, Community Manager
Kristopher Arcand, Community Manager June 20, 2014
© 2014 Forrester Research, Inc. Reproduction Prohibited
How do consumers perceive corporate mergers?
In the past six months alone, we have witnessed a series of announcements indicating potential mergers between large telecommunications companies. From Time Warner Cable’s deal with Comcast to AT&T’s merger with DirecTV, these companies are changing the face of the industry landscape in swift, sweeping steps. With such major shifts on the horizon, business leaders and consumers alike are debating questions such as: What will these mergers mean for the customer experience? How will these mergers affect overall brand perception?
Will consumers respond by changing their behavior?
Forrester Research tracked consumers’ reactions to the series of merger announcements by tuning into relevant online conversations as they unfolded over the past six months. Forrester also leveraged its ConsumerVoices Market Research Online Community to get a pulse on consumer awareness of the news, interest in the potential changes, and opinions about what these mergers will mean to individuals.
© 2014 Forrester Research, Inc. Reproduction Prohibited
Regardless of whether they are current customers of a company that is proposing to merge, consumers are generally wary of such
corporate shifts because they fear:
Increased Costs
Consumers are concerned about the mergers’ potential for increased costs, reduced market competition, and decreased service quality
Fewer Choices Loss of Quality
“As a stockholder I
like it. As a
consumer, not as
much. If these types
of companies had
fair pricing I would
give them my
support [but] I fear
they will use their
power to raise rates.”
“I do not view big
mergers like this in a
positive way
because it reduces
competition.
Mergers might give
you more bells and
whistles in your
packages… but
most people don’t
need the bells and
whistles anyway.”
“I think this is just
more bad news for
customers. These
companies, from
what I hear, really
don’t care about
their customers.”
“I don’t think a bigger
company will do
anything better,
more likely it will
be worse.”
Source: Forrester’s ConsumerVoices Market Research Online Community, Q2 2014 (US)
© 2014 Forrester Research, Inc. Reproduction Prohibited
On the other side of the coin, consumers do appreciate the opportunities for innovation that the mergers afford
Source: NetBase Aggregated Social Listening Data, April - June 2014 (Global); Forrester’s ConsumerVoices Market Research Online Community, Q2 2014 (US)
While consumer-generated online conversation about each individual
company is characterized by neutral or negative sentiment, dialogue
addressing both companies in combination is significantly more positive:
Conversation Topic: Consumer-generated social chatter that includes insight-rich text
about the topics listed below.
Sentiment: A score representing how positive or negative
commentary is, where -100% is extremely negative,
0 is neutral and 100% is extremely positive.
AT&T 13%
DirecTV 18%
AT&T and DirecTV 23%
Time Warner Cable -2%
Comcast -23%
Time Warner Cable and Comcast 40%
“The idea of the innovations that might arise from combined services is
intriguing. It would be wonderful if this [merger] advances technology and
[results] in more features for users.”
© 2014 Forrester Research, Inc. Reproduction Prohibited
By being transparent about the real advantages at hand, companies can capitalize on consumers’ appetite for innovation
“Opponents of the [AT&T and DirecTV] merger who fear reduced competition in
pay-TV services are missing the bigger transformations that are reshaping the
telecommunications landscape… This step is only a means to a bigger end… to
build a ubiquitous digital platform.” - Jim Nail
While consumers respond to the idea of a large corporate merger with
uncertainty, few also recognize and appreciate the potential for more
innovative service.
Therefore, companies that effectively communicate the benefits of such
mergers and set expectations about potential changes in cost up-front
take the first step in quelling consumer fears and pivoting the conversation
to address the imminent improvements.
To learn more, see the May 2014 report: Quick Take: AT&T Buys DirecTV
To Launch Its Digital Platform Ambitions.
© 2014 Forrester Research, Inc. Reproduction Prohibited
How we can help you DATA-DRIVEN INSIGHTS THAT PROVIDE A 360° VIEW OF THE CONSUMER
Technographics Survey Data
Who are they? What do they say they do?
Technographics Behavioral Data
What, where, and when are they doing things?
Technographics Qualitative Data
Why are they doing it? Why are they saying it?
Technographics Social Listening Data
What are they talking about? How are they
talking about it?
Want to learn more about Forrester’s data offerings, take a look at Data Services.