Most Video Customers are Satisfied; Still Will Consider Switching

Few executives at any company would deny that “happy or satisfied customers” are an unimportant outcome. The logic is simple: unless potential buyers think they will be satisfied with a product, they are unlikely to buy. Unless actual buyers are satisfied, they are rather unlikely to keep buying.

On the other hand, there is some wisdom in understanding that even satisfied buyers will desert their subscription video providers.

In other words, as important as customer satisfaction might be, it offers questionable protection from customer desertion.

The latest Digitalsmiths (Tivo) survey shows that perhaps 21 percent of linear video customers are “unsatisfied” with their provider’s service. The other 79 percent either are “satisfied” or “very satisfied.”

On the other hand, when asked if they plan to change providers in the next six months, 45 percent “might” or “will” change providers. With the caveat that consumers often do not act as they say they will, that suggests even “satisfied” customers are not loyal (defined as willingness to keep buying a product from a current supplier).

To be sure, most of the potential switchers (about 30 percent) say “maybe” about switching. Only about 15 percent suggested they were definitely going to switch.

To be sure, a rational consumer might well consider switching from one provider to another if the price-value relationship represents a big enough inducement for switching.

So the issue might be better phrased. Though “satisfied” or even “very satisfied” customer ratings are better than “unsatisfied” or “very unsatisfied” ratings, even apparently-happy consumers will desert an entertainment service if the rival offer is attractive enough. The biggest danger comes from rival offers with a dramatically-different--and better--relationship between perceived value and retail price.

The issue is not the percentages of “satisfied” customers any firm presently can count. The bigger issue is a disruptive package offered by a rival. Satisfaction does not offer much protection from churn, if and when disruptive offers come to market.

source: Digitalsmiths
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