Switching Psychology: TV & Broadband

To begin our Project Connect series – in which we will look at why we use TV, broadband and mobile services – we outline below the psychology surrounding switching. This series will not just profile some of the key providers – Sky, Virgin Media, eir, Vodafone, Three Mobile and meteor – but also explain the differences between those who love Snapchatting or those who love to “Netflix and chill.”

There have been a number of shake ups in TV and Broadband in the Irish market in the last couple of months. UPC have rebranded to Virgin Media. Vodafone have entered the Quad Play market with the launch of their new TV offering. Saorview are slated to provide on-demand services in the near future.

Irish consumers became value and price conscious in most areas of our lives during the recession and have had relatively high levels of switching in the last couple of years. The area of switching and encouraging customers to not switch is a golden ticket among providers of TV and Broadband.

So, why do consumers switch? It is an interesting question that goes beyond what may seem obvious – price and value. Another interesting question is that of what consumers don’t switch. Why do they stay with their provider even if they aren’t necessarily getting the best deal.

It is easy to commoditise TV and Broadband as an offering when we talk about the decisions consumers make; forgetting some of the more complex mind games that we as humans play with ourselves, that could be influencing why we do or do not switch.

There are a number of biases that are in play in the human mind which effect our decision making. Some of these biases can also have a role in whether we switch or indeed don’t switch from our TV or Broadband provider.

I have collated some of these biases with thoughts of how they might impact on why we switch or, stay with, our providers.

Many of these biases work in conjunction with each other, however, many, just like in other areas of real life can contradict each other -  it just depends on which is stronger in the minds of the consumer on that particular day!

Some biases that can have a role in us staying with our provider:

  1. Zero-risk aversion:  Consumers may be afraid of moving provider just in case they make the wrong decision and end up worse off than if if they had just stayed where they are. Consumers don’t want to regret their decision, so don’t make any decision. It harks back to that old phrase “better the devil you know”. 
  2. The path of least resistance: Even though there has been an improvement in how consumers view the ease of the switching process, any effort is too much effort in the minds of consumers. It is this perception of effort that can put consumers off from moving provider.
  3. Ostrich effect: This relates to human kind’s tendency to bury our heads in the sand when faced with potentially negative information. Consumers don’t always want to know that they are not getting the best deal because then they will have to act it on it (see path of least resistance above!). 

Biases that can have a role in mobilising us to switch

  1. Pro-innovation bias:  This bias describes the psychological state where innovations (for example 'replay TV') may cause a disproportionate sense of appeal to the value they might actually contribute to the customer. What innovations does your brand have that might encourage customers to see added value in your brand? 
  2. Bandwagon bias:  If our peers are switching to a provider in numbers, we are more likely to want to switch too. This can overcome some of our more conservative tendencies and gives us reassurance through ‘social confirmation’ that the decision we are making is a good one. This is where word of mouth comes into its own. 
  3. Anchoring bias:  Consumers can be over reliant on the first piece of information that they digest. Maybe the door to door sales rep has said something compelling in the opening of  their pitch that captures the attention of the consumer and overrides other salient information? This bias highlights the importance of anchoring the most important points early on, whether it be a sales pitch or an advertisement.

A bias that can work both ways: 

Hyperbolic discounting: Humans tend to think more about the now, rather than the future. We think about short term gains rather than long term ones. Maybe we could get long term savings by switching to another provider, but we got a short term discount to stay? Or, maybe we switched away from our provider who is offering longer term value for a short term deal with a competitor? This can explain the excitement we might feel when presented with ‘now’ offers and deals. Seeing long term value may be more difficult for consumers, but that does not mean they don’t react to it; it is just more abstract. 

Understanding the consumer mind-set as they approach decision making around switching or staying with TV and Broadband is crucial if brands are to create real, long lasting retention and acquisition strategies.

Does your brand take into account the role that consumer psychology might play as you try win over new or keep your existing customers? 

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