In 2017, cell phones, internet, and watch-anywhere TV have become appendages of consumers’ bodies. We’ve conducted several studies about digital behaviors and attitudes, but our latest work goes deep into how consumers make the critical decisions around which telecommunications products to buy, and what features are important to them. The research uncovers a broad array of insights, with explorations into the telecom landscape, deep-dives into cell phone, TV and internet providers, and path-to-purchase.
The Telecom Landscape and Attitudes on Bundling
Perceptions of telecom companies are more positive than one might think. Hispanics and African-Americans, in particular, tend to say the industry as a whole is appealing. The bundle is still popular among most consumers. African-Americans (at 46%) are the most likely to want to bundle at least some of their telecom services because they see it as cheaper or more convenient.
Non-Hispanic White consumers who don’t bundle don’t want to feel buyers’ remorse, or that they’re being duped into buying something they don’t want. Hispanic and African-American consumers who don’t bundle are sensitive to the prices of each service on an individual basis.
What Matters for Cell Phone, Internet & TV Providers
- Cell Phone – Strong local coverage is particularly important to Asian consumers when choosing a cell phone service provider. These consumers are more likely to buy services online, while other groups prefer to buy their service in-store.
- TV: Beyond customer service, Hispanics place more value on additional features, like premium channels, than on price. African-American and White consumers over-index on how they value DVR.
- Internet: Many of the words consumers associate with their Internet provider revolve around speed of service. Download speed, in particular, is crucial for Asian consumers.
Ethnic segmentation of leading features and price-value tradeoffs is possible. Additionally, make sure your company feels accessible to consumers through a robust customer service platform.
The Risk of Switching or Dropping Services
Older consumers and women are more likely to think it would be difficult to switch telecom providers. Consumers who think it would be difficult to switch services cite expense and effort. Few consumers have actually switched telecom providers.
When consumers quit their provider, they tend to replace their services with a new paid provider. Free services are not seen as viable alternatives, being less preferred than no service whatsoever.
So despite media narratives about cord cutting, there is significant inertia around quitting services. Companies should offer online purchase, and frame their option as inexpensive and easy to switch to, in order to lure new consumers away from their providers.
Five Things for Brands to Remember
- White and Asian consumers resist bundles with unnecessary services: These consumers balk at being forced into paying for something they don’t think they need. Similarly, African Americans want clarity around the price of each service. Show consumers the value of each element within your bundles.
- Hispanic consumers are the lowest spending consumers: For all telecommunications, Hispanics are the least willing to pay premiums, even for top quality service. Efforts to reach them should lead with value and specific features.
- White consumers tend to be most negative, and prioritize customer service: Perhaps because of previous bad experiences, these consumers emphasize customer service. When targeting them, highlight how your brand will take good care of them.
- African-American consumers seek convenience and loyalty rewards: These consumers are the most no-nonsense and brand loyal about telecom: they want an easy, low-cost bundle. Reward them for their loyalty to keep them satisfied.
- Hispanic parents are most open to original content: Hispanic consumers are more likely to ask for, and be open to, original content. This can help differentiate your brand, but consumers are not explicitly asking for it as a must-have feature.
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