The other day I read an interesting article in the Chicago Tribune; the headline read: Hard-hit Millennials less likely to be brand loyal. As a “hard-hit” millennial (those aged 19-34), who owes the value of a modest-home in student loans, I was very interested in what the marketing masterminds of the world had concluded. Turns out, it’s not so good.
According to a study released by WSL Strategic Retail, 25% of Millennials reported that they do not have enough money to cover basic needs. It also concluded that 80% of Millennials believe it’s important to get the lowest price when shopping and 60% would choose a lower priced item over their usual brand if it meant saving a few bucks. The article also suggests that retailers had previously considered Millennials their “golden ticket” to growth and success. I guess they opened the wrong Wonka bar.
As an agent of consumer research, I began to wonder about our clients and other brand marketers. Are they spending sleepless nights trying to develop plans to compensate for a demographic that is not only unwilling, but virtually unable to spend? Millennials have already been dubbed “untouchable” by traditional marketing standards due to the digital boom; it makes you wonder why brands would invest countless dollars in research and marketing efforts if Millennials are such a lost cause. My advice to marketers? …don’t start losing sleep just yet.
To be clear, we see evidence that supports WSL’s conclusions. Our Winter 2011 Consumer Pulse research on loyalty found that Millennials expressed less loyalty than Boomers to a range of products, with the exception of social networking sites and electronics.
However, we can also find support that suggests Millennials are not as hopeless as they seem. The same Pulse research found that 84% of Millenials consider themselves moderately loyal. In addition, nearly half (46%) said that there are companies or products they’re so “loyal” to that they do not consider price when making a purchase decision. So how does one crack that egg? What it comes down to is experience. Fifty-three percent of Millenials were willing to pay a bit more to companies they’ve used before and whose products they know they’ll like.
Despite it all, Millennials appear optimistic. Having grown up in an era plagued by war and economic strife, you would think the negativity would bring us down. However, Millennials are seeing a light at the end of the tunnel. According to a separate Consumer Pulse research study CMB conducted in summer 2011, 48% of Millennials surveyed were optimistic that their financial situation would get better in the next 12 months. And nearly a third (29%) said the economic downturn had no effect on their stress levels.
While our pockets may not be as deep as we would like, we are optimistic they one day will be. In fact, the same Summer 2011 Pulse research found 59% of Millennials viewed “being indulgent” a highly important goal/value. When the day finally comes where we can afford to spend, you can bet we will, and loyalty will be a driver. So have a little faith, brand marketers of the universe…we Millennials sure do.
To read our latest Consumer Pulse reports exploring exploring trends in social media, healthcare, technology, travel, entertainment, and finance, click here.
Posted by Keri Ibbitson. Keri is an Associate Researcher with the Travel and Entertainment team. She considers herself very brand loyal, always choosing General Mills Cocoa Puffs over store brands.
Remember the heyday of the music industry? Remember how the big music companies pulled off a nearly unthinkable feat—convincing consumers to re-buy previously purchased products (vinyl) on a new medium (CD)? That’s what can happen when you’re the only game in town.
In addition to generating “found” revenue, the move from vinyl (including vinyl 45s) to CD had another profound impact—it solidified the album as the industry's unit of purchase. Hear a song you like? Hand over ten or fifteen dollars and you can own it. We’ll of course throw in other songs; maybe you'll like them, maybe you won’t. But you really have no other choice.
Somewhere along the line, young consumers—college students especially—got it into their heads that they no longer wanted to pay for music. And, as hard as it is to believe, they were even less interested in paying for music they didn’t want in the first place. File-sharing sites like Napster were happy to oblige. Not only did consumers begin downloading music for free, but perhaps more significantly, they also embraced a new type of music business model—an à la carte, unbundled model, where they could choose only the music they wanted. How quickly did the music industry adapt? Well, you know how that played out….
Young consumers appear to be at it again, poised to disrupt another industry that's built its fortunes on a bundled-service business model and on being the only game in town: the pay TV industry. The numbers aren't huge yet, but 5% of consumers in our recent New Age of Television study say they've never had a pay TV subscription. If you’re thinking that these are the folks with aluminum-foil rabbit ears on their TV sets, think again. Half of these "never had pay TV" household decisionmakers are 22-30 years old (more than double the percentage in the study’s total sample) and 63% have college degrees (also higher than the norm) Their income is lower than average, but they've chosen to spend their money on broadband service (they had to have broadband to be included in our study), and not on cable and satellite.
And yes, they are watching TV and movies. They're just accessing that content the same way they presumably learned to do so in college—on their laptops (72% watched on a computer in the week prior to the study), and finding content from aggregators like Hulu (43%), network TV sites (33%), and file-sharing sites (10%). They’re accessing the specific programs they want without paying for unwanted programs or networks in a bundle. They may have to wait a year to watch the first season of Homeland, but that may not be a huge deal, considering how much they'd need to pay for that privilege and how much other content is available online.
The multimillion-dollar question: Will these young consumers eventually get pay TV? The answer: unlikely, at least based on what they told us. Only 15% said that they would definitely or probably sign up within the next 3 years.
Three years is practically an eternity in today’s TV world; who knows what will happen between now and then? Once these consumers settle in to a more stable life, start a family, and make more money, they could decide that the convenience of picking up a single remote for access to a ton of content is too attractive to resist. But then again, by that time someone may come up with an online solution that's just as, or even more, convenient. And maybe it will be less expensive.
We're going to keep an eye on "never had pay TV” consumers in future waves of our study. And the industry will probably want to as well. After all, it’s not as if college graduates—looking for places to live, comfortable accessing content online, and with limited finances—are going to be in short supply any time soon.
Posted by Peter Fondulas. Peter is co-author of the New Age of TV study, a CMB consultant, and President of Fondulas Strategic Research.
Download the summary report The New Age of Television: How Consumers Make Choices in a New Era of Entertainment Options
In 6th grade, my teacher sent home a survey to parents about “What motivates your child.” My mother wrote down three things: candy, money, and anything free. I remember this so vividly because I was mortified. I wanted her to say something meaningful like, “positive praise” or “a creative academic environment.” But no, she laid it all out on the table; that I was a greedy, Twix-loving, free loader.
Here at CMB, we spend a considerable amount of time investigating what motivates consumer behaviors. We want to know what the consumer is doing and why, and we want realistic and actionable insights. Keeping this in mind, I have considered my mother’s response to that long-ago survey and realized she probably should ditch being a nurse and consider a career in marketing.
To take an in-depth look at what motivates consumers to “Like” a company on Facebook and subscribe” to e-mails we partnered with Constant Contact to survey 1,481 Americans over 18. The top motivators to these two strategic means of engagement are: to receive special discounts, or take part in special promotions. This concept of free giveaways, deep discounts, and being privy to special information is a major driver of customer engagement.
While the understanding that consumers enjoy receiving deals and free gifts may not seem like breaking news at first, it’s an important finding for companies looking to get the best return on where they decide to spend money on special deals, discounts, and giveaways. In a recent Consumer Pulse exploring the motivations of customer satisfaction survey takers, we found many consumers were motivated by the desire to improve the company and service rather than free gifts and incentives. Yet this doesn’t hold true for consumers “liking” brands on social media or subscribing to email lists.
Many consumers don’t particularly care about the bottom line of their favorite brands or businesses. They want to know “what can you do for me?” Businesses who utilize e-mail and social networking to engage with their consumers need to heed this opportunity. More often than not, consumers want to know how they will benefit from a long-term business to consumer partnership. Organizations that best understand the underlying intentions of their consumers have the key to turning special promotions and discount programs into lasting customer relationships.
Long-term engagement is essential to solidifying a brand in any market. With the volume of communication and information sharing ever growing, businesses need to be prepared to meet their markets’ expectations. Consumers spend a lot of time on these outlets and businesses must be able to find a way to provide something meaningful so they’re not lost in the noise. Facebook pages and informational e-mails are only as good as what they can provide to their audience.
Download the full report: 10 Facts about Why and How Consumers "Like and Subscribe here.
Posted by Keri Ibbitson. Keri is an Associate Researcher with the Travel and Entertainment team. She has found her motivational drivers have grown since 6th grade, and they reach well beyond candy, money & free stuff.
Last year we partnered with Constant Contact to learn how consumers use Facebook to connect with brands. Take a look at this cool infographic from Intuit and Column Five featuring some of our findings and how small businesses are using social media:
Download the full report here.
When we set out, in our latest CMB Consumer Pulse, to discover how consumers are navigating the unprecedented range of options for accessing TV and movies, we knew some of the things we’d find out—e.g. the number of people who have completely cut the cord is still small, Netflix streaming is very popular, and many people are watching on smartphones and tablets. However, some things surprised us:
Completely cutting the cord may be rare, but that’s not the only, or even the most important thing to worry about
People who have completely “cut the cord” entirely are a very small group (3% of the study’s population). The more compelling finding is the number of people who may be “on deck”— those who have tried Over-the-Top TV (OTT) and/or those who are considering reducing their pay TV service.
More than half (54%) of respondents used the Internet to watch TV at least once. (tweet this)
Nearly half (43%) of pay TV subscribers said that they were at least somewhat likely to cut back on premium services (like Pay-Per-View or premium channels) in the next year. (tweet this)
This suggests that a big chunk of consumers’ TV-watching dollars could shift, even if their pay TV cords remain intact. And, that awareness and perceived value of OTT have risen to a point where consumers of all kinds are investigating OTT as an option.
The biggest screen does NOT always win, and the definition of “watching TV” is changing
Everyone knows that new devices are impacting consumer behavior. But our research suggests technology is driving fundamental changes in how people define the “TV watching experience.” For example:
Among people who watch TV on tablets, 58% say that they watch TV on their tablet when they’re at home. (tweet this)
Nearly two-thirds (63%) of those people say they’ve used a tablet even when they could have watched the same show on their TV. (tweet this)
There’s no indication that people will stop using their televisions entirely. But this does suggest that mobile devices have a role in the TV experience that transcends their mobility; and there are more scenarios where people will choose something other than the biggest available screen.
Not all elements of the TV watching experience are created equal
In our survey, consumers completed an exercise that forced them to trade off different attributes of a TV service provider based on what was most important to them. Some of the findings were obvious (e.g. people want to pay less for their TV). But other priorities offered more of a surprise:
Streaming Content beats Owning Content: Consumers prefer alternatives that rent/stream video over those where you download and own the content. (tweet this)
More Content beats Newest Content: More consumers say having the largest catalog of content was more important than the fastest access to new content. (tweet this)
In short, technology and features matter but complexity is a barrier to switching over completely. Today, people who want an OTT solution have to manipulate a Rubik’s cube of devices, platforms/providers, and payment models. However, that will change as more streamlined solutions come online.In the future, the most successful offerings will be those that provide a simple solution that's built around the things that matter most to consumers.
Check out this short video:
We surveyed nearly 1,500 consumers in the U.S. to get a pulse on their TV and video viewing habits and what it means for the future of OTT. Learn more, download our Consumer Pulse: The New Age of Television
Posted by Jon Giegengack, Jon is a Director at CMB and leads research for digital entertainment companies in television, music, videogames, and social media. As a veteran cord cutter, he knows the good, the bad and the ugly of today’s TV options.
Last week I blogged about the positive intentions of consumers who take the time to participate in customer feedback surveys. One of the more disappointing findings is that most companies fail to respond when customers give poor scores or negative feedback. On this point, we asked respondents to recall the last time they provided negative feedback or a complaint in a customer satisfaction interview, and whether a company provided a response. A majority say they did not receive any response—just 35% recall any type of response from the company.
This was quite a surprise. Companies are investing tens of thousands of dollars in their customer feedback programs, but many are missing the point. When customers complain it’s because they feel disappointed or disrespected, treating them like an anonymous statistic is another kind of service failure. How do you teach a company or brand to mind their P’s and Q’s? Maybe we need an Emily Post for corporations!
When you think about it, customers who take the time to respond to a customer satisfaction interview have given time and effort to provide information that should be valuable to the company. Those who’ve had a bad experience could easily turn and walk away. Instead they respond to a request for feedback. Whether it’s a complaint about a service failure, a suggestion, or even a review of a positive experience, companies need to let customers know they’re being heard.
And yet the majority of companies are turning their back on these people!
The thing is, technology makes it easy to manage and respond to feedback; and most people don’t expect much. In fact, confirmation and a commitment to improve will go a long way to show appreciation. And of course, a simple “thank you” can’t hurt.
Download the full report: Customer Satisfaction Surveys: Open the Door to Customer Engagement
Posted by Jeff McKenna, Jeff is a Senior Consultant at CMB, and the creator and host of our Tools and Techniques Webinar Series.
As CMB has grown and expanded our customer satisfaction measurement practice, we’ve invested considerable time and resources into conducting research on research, to make better decisions about managing these programs. In addition to direct feedback from clients, we conducted a study among managers at medium and large businesses who rely directly on customer satisfaction measurement for decision-making. The findings point to many opportunities to improve the overall usefulness of these programs.
Our next step has been to look at customer satisfaction research from the consumers’ point of view – i.e. the respondents who complete the surveys at the bottom of their receipts or that come into their inbox. What we found might surprise you…
We’re gaining deeper insights about the nature of people who respond, their frequency, and the reasons for responding to the requests. For instance, most people respond to share details of both positive and negative experiences; just 8 percent say they respond only when they have had a bad experience. What this tells us is that people voicing their opinion in customer satisfaction are NOT more inclined to be negative. In fact, most people respond with good intentions to help the company improve or maintain good service/products.
Here are a few other facts worth sharing:
Many customers give feedback as part of their “job” as customers—50% say they give feedback to improve the company. Tweet this
57% of customer satisfaction survey takers say they do it to give positive feedback. Tweet this
Only 28% of customer satisfaction survey takers do it to win a prize or get a reward. Tweet this
Download the full report here.
Next week we’ll talk about why and how companies need to respond to the feedback.
Posted by Jeff McKenna, Jeff is a Senior Consultant at CMB, and the creator and host of our Tools and Techniques Webinar Series.
I started my career in sales. In sales, you very quickly learn that it is much easier to sell to an existing - rather than a new - customer. The fact that existing customers are valuable isn’t a tough concept to grasp. Customer loyalty researchers report that, on average, companies lose about 50% of their customers each year, that it costs 20x more to do business with a new than existing customer, and a minimal reduction in customer defection rates can significantly boost profits.
So, can someone please explain why so many companies are making headlines for initiating new fees or penalties that seem designed to aggravate their customers? I’m sure at least some of these stories caught your eye…
In July, Netflix unbundled their DVD rental and streaming plan, effectively forcing customers to pay $6 more for the combo plan they had grown accustomed to. Then, in September, Netflix CEO announced that DVD rentals and streaming would become two totally separate services. The streaming service would retain the name "Netflix," while the DVD branch would be called "Qwikster." Reactions were predictably negative, and on October 10, before Qwikster had even launched, Netflix ended the failed experiment.
Throughout the year, one after another of the major airlines (with the exception of Southwest and JetBlue) raised fees on checked baggage. Fliers hate baggage fees and the long lines at airport security screening are made worse by passengers carrying on more bags. The TSA estimates that the number of carry-on bags has increased by 87 million since 2009.
On December 30th, after a customer ‘uproar,’ Verizon Wireless decided it will not institute a $2 convenience fee for online or telephone single payments, 24 hours after it was announced.
Even my favorite hotel company recently hit me with a $50 change fee for a mistake I made on the dates of a business trip. I was coming to the hotel for goodness sake – just not on those dates!!! Ugh.
I understand that companies need to make money; and changing regulations and technology can affect a corporation’s ability to deliver profit. But in the spirit of the Occupy movement, someone needs to be watching out for the customer!
From a recent CMB Consumer Pulse – 44% of respondents report feelings of loyalty to 10 or more companies they do business with – another third to 5-9 companies. In addition, we learned that two-thirds enjoy it when a company thanks them for their loyalty… and one-in three expects a company to thank them….boy they must be disappointed when instead of a thank you, they get hit with new fees and charges!
CMO.com recently listed the 10 things CEOs need from their CMOs …drumroll please… #3 on the list is A Customer Whisperer…someone who can tell them what customers in the future, will want. And #9 is A Customer Advocate… someone who can be the voice of the customer in the executive suite. Someone, who, in the face of pressure from finance or legal, will fight to ensure sufficient consideration is paid to the needs and interests of customers. Marketers should seek to uphold our own version of the Hippocratic oath: "first, do no harm to our customers."
So, what’s a brand manager or CMO to do?
The problem probably isn’t that you don’t have enough data-the problem, instead, may be that you have too much information! Or maybe the information isn’t being delivered to you in a way that makes it easy to find insights or support for your decisions. If you work for a company like most, a significant portion of your research budget is dedicated to a customer feedback, performance, or satisfaction program. Are you getting the return (in insight) you are making for the investment you’re making? Maybe it’s time to revitalize the program to enhance your role as customer whisperer and advocate!
Here’s what we believe you should be getting from your program:
Direction for product/service investment decisions: If you had $20 million to spend, where should you invest? Where would you get the biggest bang for the buck? Upgrading something customers see as a “table-stake”…. Or enhancing a service that is a “customer delighter?”
Identification of deal-breakers: What interactions/events/problems cause customers to run away to your competitors?
Insight into the needs of key segments: How loyal are key segments (Next Gen customers, Gen X/Gen Y, repeat customers) to you? What percent of their wallet are you attracting?
Direction for operations improvements: How well are you performing on the key drivers? How does that compare to what guests get from competitors? Which locations are excelling – and what is it that they are doing? Which locations are lagging – and what can they do better?
Brand-operation alignment: How well does the customer experience match what you promise? (remember the ‘fly the friendly skies’ ad of a major carrier?) What’s causing disconnects?
Competitive intelligence: Who/Where are you leading? Where are you lagging?
The voice of the customer: Verbatim comments about what it’s like to buy from you.
While an effective CSM program won’t answer all the questions the organization might throw your way, our clients find themselves better prepared to advocate for their customers, support investment decisions of brand or line managers, focus on areas of importance to key customers-to provide insight to reduce risk around your business decisions. Customer performance measurement is a tool that you should have in your kit to help you engage and retain your customers. Maybe it’s time to "sharpen the tool!"
For more on getting the most from customer feedback, download our Consumer Pulse on Customer Satisfaction Programs
Posted by Judy Melanson. Judy leads the Travel & Entertainment practice and loves collaborating with clients on driving customer loyalty. She's the mom of two teens and the wife of an oyster farmer. Follow Judy on Twitter at @Judy_LC
Seems like everywhere I turn I see a QR code. From product packaging to billboards in the airport, those funny little black and white designs are popping up all over—even on T shirts. So we set out to ask consumers what they think about the 2D bar codes known as Quick Response or QR codes in our latest Consumer Pulse: Scan Me-9 Things To Know about Consumer Behavior and QR codes.
There is no doubt it’s a very cool tool brands and companies can use to engage and share information with consumers, but even the coolest tools and applications need to provide meaningful information to be successful. Just like Twitter, Facebook and other social media marketing tools it always comes back to insightful content that consumers will value. The success of QR codes will depend on the content behind the scan.
What do consumers think? CMB partnered with iModerate Research Technologies to see why consumers scan QR codes and what they expect from the little black and white squares.
As a marketer here are a few facts that stood out to me. Watch This:
Nearly 1 in 5 who scanned a QR code made a purchase after scanning (Tweet this)
81% say they’ve seen a QR code, but only 21% knew what they were called (Tweet this)
Half of smartphone users have scanned a QR code (Tweet this)
70% of those who scanned QR codes, said it was very easy (Tweet this)
Results are mixed on QR codes' usefulness, 41% say the information they got was useful (Tweet this)
Magazines and newspapers are the most common QR source for those who’ve scanned a code (Tweet this)
46% of those who’ve scanned a QR code did so because they were curious (Tweet this)
We found smartphone owners and non-smartphone owners alike are curious about QR codes for information and for discounts, free gifts and exclusive deals, and they find the process of scanning to be really easy. But as more and more consumers get smartphones and the ability to scan, marketers must go beyond the novelty of the application if they expect customers to scan again and make it a regular part of the purchase process.
I’d love to know, are QR codes part of your 2012 marketing plan? Will QR codes gain steam in 2012 or fizzle out?
Download the full report here.
Posted by Kristen Garvey. Kristen is CMB's VP of Marketing, a mom of two, and thinks QR codes can be as useful as the content behind them, and that they will have their place in the marketing toolbox for 2012.
The new year is a time for reflecting and looking forward to the next 12 months. And for businesses, as we enter the last weeks of 2011, it is critical that companies in all industries reflect upon the past year’s decisions and peer into the future.
There is little doubt that the economic strain of the past three years will continue to affect companies across industries. Yet, 2012 will hold both opportunities and challenges for market researchers. More than in the past, our clients will need the ability to manage, analyze, and integrate massive amounts of data while gleaning insight and recommendations within very constrained budgets.
Price sensitive clients will be asked to choose between mountains of data at low prices, or more targeted consultative approaches focused on insights, action and outcomes. To differentiate ourselves, research companies will need to create true partnerships that work to address the core needs of our clients. My prediction is not that 2012 will be an easy year, but that we as a company will continue to evolve and perfect practices that help our clients make sense and use of the data we collect.
We are urging our clients to read Drinking from the Fire Hose; authors Chris Frank and Paul Magnone effectively detail the issues related to having too much data and how effective companies and managers can ask the right questions to insure focus on their companies’ goals and decisions. Take the time to explore the “7 Questions” that they outline and revisit these questions throughout the year.
As with every year, 2012 will have its own set of challenges, but success lies in our ability to channel the lessons of the past year and make smart decisions for the coming year by asking the questions that count. At Chadwick Martin Bailey we believe more than ever, in the importance of being true partners with our clients, so together we can connect the data points and develop strategic insights that lead to better business decisions.
For more on Drinking From the Fire Hose, read Christine Gimber's take on our recent event with Chris and Paul here.
Posted by Anne Bailey Berman. Anne is the President of Chadwick Martin Bailey and enjoys volunteering in the community, traveling with her family and spending time in her vegetable garden.