7 Reasons customers are changing faster (and slower) than we thought
Every year, OFCOM produce a 200 page report into media habits in the UK. It represents real, mainstream activity — normal mass market customers, not early adopters or insiders. At Fluxx, we use the report as a sense check when designing products and services. This is what stood out this year.
1. Death of the desktop and laptop
“There has been a considerable rise (from 6% in 2014 to 16% in 2015) in the proportion of adults who only use smartphones or tablets to go online, and not a PC/laptop.”
Who’s up? Companies who built responsive websites
Who’s down? Companies who built responsive websites — yes, you read that right. 84% of the adult population still uses their desktop/laptop (sometimes) to go online, but that is not 84% of your customers, and when they use that particular device, they’re choosing it for a reason.
You simply don’t know if they will care, or not care about the degraded/simplified experience that might be implicit in a responsive website design until you get close to them and their needs.
So What? Disregard the generalised stats. Before you make such a big investment decision, get close to your customers to see what they actually need. The answer may be something entirely different…
2. Amid all the change, people are becoming more conservative
“There has been a sizeable increase in the proportion of internet users saying they only use websites or apps that they’ve used before (42% vs 31% in 2014).”
Who’s up? Netflix, YouTube, blah, blah, blah — yeah, ok, but actually…
Who’s down? Netflix! Although their revenues are still rising month on month — their operating incomes are crashing. Their Q1 2016 is virtually HALF what it was in previous years, which appears to be because of rising costs — presumably spent on rights and content production.
So what? Every business has to be prepared to change how it perceives its business, and be prepared to change it entirely in order to save it (witness Kodak, et al). Netflix is fighting a content war with Amazon Prime Video and others to the detriment of its bottom line — but they each have fundamentally different views on what exactly that war is and how important it is. Amazon’s Annual Report 2015 states “Trial Amazon Prime members who watch Prime Video are much more likely to continue into paid membership than those who don’t”.
In the US, it is estimated that Amazon added 14 million Amazon Prime members in 2015. With an estimated average per member of $1,100 each — that is a staggering $15.4bn in revenue from new members alone. Netflix’s entire revenue for the whole of 2014 and 2015 COMBINED is $12.3bn.
Netflix needs to stop fighting, look at the market place, some of these trends, its core strengths and assets, and see how it can change the game its playing — even if that means not being quite the same Netflix we know and love any more.
3.We’d rather be without TV than a smartphone
“From 2005–2014, adults were most likely to say they would miss their TV set the most. Now mobile phones are the most-missed media device. The smartphone is also the device mostly used for social media and is the preferred device for the majority of online activities.”
Who’s up? Mobile phone insurance companies — this market is growing 10% year on year globally, compared to a margin-squeeze in other insurance sectors (for example, motor insurance is 3.6% growth in the UK between 2011 and 16)
Who’s down? Anyone considering a new product or service, and NOT factoring in the role of the smartphone in their customers’ lives.
So what? “The year of the mobile” came, went, came again, and keeps on marching on. It’s time to stop thinking about it as a separate thing, and just think of it as part of the lives your customers lead. Get over it!
4. There is no longer a universal means of communication
“There is increasing polarity between different age groups in terms of communications activity.
… there is a risk that common means of communication that cut across demographics are becoming increasingly rare, with implications for social connectivity and information-sharing.”
Who’s up? Well, it depends who’s flavour of the month. There are currently five different ways in which my family communicate with each other digitally — Facebook Messenger, WhatsApp, text message, Snapchat and Instagram (yes, who knew you could use it for that?). Other fun things like ooVoo and Zello sometimes get prominence for a particular use, or event.
Who’s down? Anyone who offers voice-only customer service — this trend shows that consumers will be increasingly dissatisfied with being forced to use voice calls as the primary way of getting in touch for customer service. It’s frustrating, doesn’t fit into my daily life, takes time, and the experience and outcomes are unpredictable.
So what? It’s time to reinvent the contact centre. We have to create new opportunities to delight customers without them being already grumpy having waited an age to get to the front of the IVR queue.
Also — See the appendix below… How to snapchat like the teens
5. People don’t understand search engines
“ Half of search engine users (51%) were unable to correctly identify adverts or sponsored links in a results page of a search engine; this was more common among over-65s and those in DE households”
Who’s up? Search advertisers & Google — the impact of this is that the general public click things they think are genuine results, but they’re not.
Who’s going to be down? Search advertisers & Google — just as soon as the 51% get wise to it… click through rates will plummet.
So what? CPC rates are through the roof in some areas. Search engine advertising has never been more successful, or competitive. If you search ‘rollette’ [sic] and click the link to an advertised ROULETTE site — you’re going to cost someone in the region of $145!
6. People starting to control their own privacy
“Two-thirds of Facebook users say they have changed the settings of their Facebook account to make it more private, while two-thirds of Instagram users say the same about their Instagram account.”
Who’s up? Users. We’ve finally become wise to what these things mean. We now have the skills to protect ourselves in the digital world as well as we would in the real world.
Who’s down? Brands, Facebook, advertisers — the ‘firehose’ of available data on individuals was incredibly useful in building up huge data-sets on the profiles of customers and potential customers. This helped them research or create new products, as well as develop their media plans to find customers for existing ones.
So What? Product development and R&D is going to have to move more to the lean test and learn strategies employed by people like Fluxx in order to find ways to learn about audiences for new products and validate their new thinking against real-life people.
7. Sometimes, still only a laptop will do
“Smartphones preferred for social media, listening to streamed music, watching short video clips, looking at news websites or apps, and surfing or browsing online.
“Laptop for: buying things online, watching TV programmes or films online on broadcasters’ services, and completing government processes.”
Who’s up? Anyone who uses data to inform their design. You will have spotted this from your web-stats eons ago and adapted accordingly. You’ve probably used this data to bias a single primary interface suited for the devices your audience prefers.
Who’s down? Anyone trying to maintain multiple interfaces with equal priority for a given service across different devices at great expense.
So what? Get closer to your customers to understand why they prefer a particular device, and how they actually use the service. Support this insight with data and make your design decisions appropriately.
So…
What use can you make of all of this in making new media products or services?
Know that no matter how current your research about how people consume media, it will continue to change constantly. Assume nothing — only by using experimentation to check your assumptions and develop your product strategies will you find what people will actually use and how they will use it. — Fluxx Thinks, 2016
If you want more from OFCOM’s research, there’s plenty where that came from…
http://stakeholders.ofcom.org.uk/binaries/research/media-literacy/adults-literacy-2016/2016-Adults-media-use-and-attitudes.pdf
Also… this study was about adults — for the briefest of insights into how teenagers use digital media, you could do worse than read Ben Rosen’s How to snapchat like the teens
Paul Dawson is a partner at Fluxx — creating products, services and businesses people love — we change organisations by working collaboratively at pace through experimentation and design
