Should you stay or should you go?
Published 25/02/2016 | 02:30
To switch or not to switch? Consumers often ponder it as they kick around the idea of signing up to a new health insurer or energy provider. Ignite Research reports on how and why consumers switch TV and broadband services. A market shake-up has seen UPC rebrand to Virgin Media and Vodafone roll out TV offers.
Saorview are set to provide on-demand services. Ignite's Emma Kavanagh says as Irish people became more value and price conscious during the downturn, switching became the norm. It's now a golden ticket among TV and broadband providers. But why do consumers switch? Kavanagh says the answer goes beyond the obvious: price and value.
The reason may even come down to a consumer's mood on a given day. For instance, there's zero-risk aversion. Some consumers are nervous in moving in case they make the wrong decision and end up worse off than if they had stayed put. Consumers don't want to regret a decision, so they don't make any decision. As they say, 'better the devil you know'. There's the path of least resistance. Is moving provider worth the hassle? The ostrich effect is the instinct to bury one's head in the sand when faced with possible negative information. So what makes people switch? Brand innovation can work, like replay TV. Some consumers are happy to jump on the bandwagon and follow friends. They are reassured through 'social confirmation'. Word of mouth comes into its own.
There's also what's called an 'anchoring bias'. Consumers can be over-reliant on the first piece of information they get. A door-to-door sales rep's opening line may do the trick, overriding other information. The bias stresses the need to anchor the most important points early on - be it a sales pitch or an ad. To throw a spanner in the works, 'hyperbolic discounting' has a say too. People tend to think about the now, rather than what the future holds. Short term gains are usually more attractive. Some consumers think and act along the lines of maybe they might get long-term savings by switching to another provider, but that means turning down a short-term discount to stay.
Yet some believe in switching from a provider offering longer term value for a short term deal. It explains the joy felt when presented with 'now' deals. Seeing long-term value can prove tricky, but that doesn't mean consumers won't react to it - it's just less tangible.
* Bord Bia is to open a major new market research unit at its Clanwilliam Court HQ soon. Called The Thinking House, the 7,000 sq ft premises facing on to Lower Mount Street will offer a range of R&D services aimed at helping SMEs and larger Irish food companies bring new products to market.
Bord Bia's director of consumer insight, Helen King, said The Thinking House will also act as a merchandising space for international buyers and a learning centre for Ireland's universities and colleges. "It's really about getting data and turning it into knowledge to grow food businesses," she told AdLib.
King denies the new centre will impact on the amount of work Bord Bia gives independent researchers. "We spend lots of money with research and branding agencies and that won't change. We're hoping it will encourage the wider use of research and insight." Bord Bia's team of brand, insight and innovation specialists includes former Diageo exec Rory McDonnell, Zuilmah Wallis, who was European marketing director for Fitch in the UK, and former Publicis planner Grace Binchy.
Former McConnells boss John Fanning chairs Bord Bia's Brand Forum where mentors include Siobhan Collins, Valerie Rice and Aisling Roche. Oscar-nominated actress Saoirse Ronan, pictured, fronts the board's Origin Green sustainability programme to which 499 food producers have signed up, with 130 verified members.
* As the country goes to the polls tomorrow, the number of consumers positive about the economy stands at over 1 million, Core Media's Ignite Research reports. In contrast, 17pc of the country is 'somewhat pessimistic' about the future, with just 5pc 'very pessimistic'. Ignite's Finian Murphy asked consumers what causes most stress. Employment affects men, health issues worry older people and the family's future causes mums the most anxiety. While one in three still have money worries, 1.5 million people say they are happy.
* Eir, previously known as Eircom, wants creative ad agencies to present for Meteor after Rothco resigned the account. Brian Sparks at Agency Assessments is the pitch doctor. The agency has been responsible for some wacky campaigns since it took the business from Publicis, not least Christmas Unlimited, pictured. The ads feature Nicholas St Wenceslas, CEO of Christmas Ltd, a JR Ewing lookalike who makes consumers pay more while giving less.
Michael Cullen is editor of Marketing.ie: email@example.com