The Yankee Group’s latest Technologically Advanced Family survey results have two distinct notes of caution for broadband service providers. The annual study is in its 20th year of looking at service adoption, buying behaviors and purchasing influencers of households across all demographic segments in the U.S.
What it found this year is that price is still a significant factor in customer acquisition and retention, and that the next round of growth in broadband deployment is going to take renewed efforts by service providers.
As in past year, customers who bought a service bundle – high-speed data as well as voice – were less likely to churn than others, said Yankee analyst Kate Griffin. But that resistance to churn wanes as the price of competing voice services go down and essentially disappears when consumers can save $20 a month on voice by switching.
“This tells us that price will always be important,” she said. “There is a lot of customer inertia going on. People who are interested in attracting new customers need to make it worth their while to go through the pain. Calling an operator is some pain, changing an email address is a lot of pain, waiting for an installer is pain. For some customers, though, $20 a month makes it worth their while.”
The other major early finding of the survey, whose results are still being analyzed, is that the number of respondents not interested in broadband access actually rose to 41%.
“For several years, there has been a large interest in having broadband amongst those that didn’t have it, and the primary reason they didn’t have it has been price,” Griffin said. “This past year, we saw significant price wars – we saw Verizon and SBC with their $14.95 DSL. That lowered the barrier – a lot of those people who were interested in broadband got it.”
That ready base of new broadband customers now is substantially depleted and service providers are going to have to be prepared to market to a more reluctant group in order to grow, she said.
“As we are looking to continue to grow the broadband base, it’s going to get harder,” Griffin said. “The next growth will come from building new interest in customers and educating them.”
Most of that education will center around showing consumers that there are applications such as photo sharing or video for which broadband access is worthwhile, she added.
The Yankee Group 2005 Technologically Advanced Family Survey contacted 2300 U.S. households. Further results will be announced as they become available, Griffin said.
http://telephonyonline.com/broadband/news/TAF_survey_Yankee_101705/
What it found this year is that price is still a significant factor in customer acquisition and retention, and that the next round of growth in broadband deployment is going to take renewed efforts by service providers.
As in past year, customers who bought a service bundle – high-speed data as well as voice – were less likely to churn than others, said Yankee analyst Kate Griffin. But that resistance to churn wanes as the price of competing voice services go down and essentially disappears when consumers can save $20 a month on voice by switching.
“This tells us that price will always be important,” she said. “There is a lot of customer inertia going on. People who are interested in attracting new customers need to make it worth their while to go through the pain. Calling an operator is some pain, changing an email address is a lot of pain, waiting for an installer is pain. For some customers, though, $20 a month makes it worth their while.”
The other major early finding of the survey, whose results are still being analyzed, is that the number of respondents not interested in broadband access actually rose to 41%.
“For several years, there has been a large interest in having broadband amongst those that didn’t have it, and the primary reason they didn’t have it has been price,” Griffin said. “This past year, we saw significant price wars – we saw Verizon and SBC with their $14.95 DSL. That lowered the barrier – a lot of those people who were interested in broadband got it.”
That ready base of new broadband customers now is substantially depleted and service providers are going to have to be prepared to market to a more reluctant group in order to grow, she said.
“As we are looking to continue to grow the broadband base, it’s going to get harder,” Griffin said. “The next growth will come from building new interest in customers and educating them.”
Most of that education will center around showing consumers that there are applications such as photo sharing or video for which broadband access is worthwhile, she added.
The Yankee Group 2005 Technologically Advanced Family Survey contacted 2300 U.S. households. Further results will be announced as they become available, Griffin said.
http://telephonyonline.com/broadband/news/TAF_survey_Yankee_101705/
