Will Recession Lead to Permanent Behavior Changes?

Nobody yet knows when the current recession will end, or what will happen to various industry segments during the recession. What is even less known is how consumer and business behavior during the recession might carry on in the form of new trends once the recession is but a memory.

Recessions can cause people to think more about the effective use of their assets. In bad times, users are forced to see if there are substitute ways of doing things that save money right now. But if the substitutes are good enough, people might not go back to their former preferred ways of doing things.

At a practical level, business buyers in many cases are taking longer to make decisions, so the time lag from proposal to acceptance is stretching out.

But there still is little, if any, concrete evidence that business or consumer users are abandoning key services ranging from broadband access to wireless to multi-channel video. In fact, the evidence so far indicates they are behaving as they have in the past: keeping services but delaying upgrades and adoption of new enhanced services.

What bears watching are signs some customers are behaving in new ways, such as canceling multi-channel video subscriptions in favor of Internet alternatives. A recent poll by researchers at the Yankee Group suggest that one percent of respondents actually have done so.

Then there is the impact of users dropping landline services in favor of mobility, or using Skype instead of their landlines or mobiles, switching to prepaid from postpaid mobile plans, buying hosted business voice in place of new phone switches or buying some forms of broadband access instead of others.

The point is that tougher economic conditions will lead some consumers to experiment with new behaviors that might become permanent changes.