I had a conversation this week with one of my consultants about customer research.
We were talking about observed intent and how it often differs from self-reported intent, and how that topic is at the heart of some of the value propositions of the new wireless carriers.
A few weeks ago, I wrote about the limitations of customer surveys. To recap:
• Customers will often rationalize irrational behaviour, after the fact.
• Customers have trouble accurately predicting what they will do, out of context.
• Customers often don't understand why they make the decisions they make, since decision making is at least partly – sometimes dominantly – emotional.
Surveys are not always the best research tool for predicting decision making patterns. Instead, observation and point-of-sale (POS) intercepts can be very informative.
My consultant and I were talking about how some customers buy. Over the past few years, we have watched thousands of consumers shop as they browse, narrow, select, pause, replace, select again, and finally purchase. Or identify, select and purchase. Or one of another myriad of decision trees that lead to a customer making a purchase or walking out of a store empty handed.
It's the second path we are fascinated by: neither of us is overly impulsive – we research, we compare, we analyze, then we buy. But there's a segment out there that doesn't buy the way we do. This segment literally walks up to a store window or a display, points at a product, and says "Cool! How much?" And if the answer is acceptable, off they go with a shiny new good. It's likely a different – or at least slightly different – segment of impulse buyer. But it exists.
So how does this tie in with the new entrants in the mobile phone space in Canada? Two of the key pieces of the value propositions for some of those new entrants are customer dissatisfaction and reticence to sign contracts. The upshot, if we are interpreting correctly, is that some of these carriers believe they can win over either new customers in the space – perhaps new immigrants, perhaps students – or pull customers from established players, based on contract phobia or disenchantment with an incumbent's service.
I'm curious about the customer data from which the value propositions were built. I know each of the new entrants looked abroad for successful models in other countries. I know pricing structures from all over the world were studied. And I'm told there is a pile of Canadian customer research data, and that it was very professionally compiled and analyzed. I'm told it shows that a significant portion of the population at some point indicated it is dissatisfied with the service currently received from the phone companies, and that people would prefer to not sign a contract. I'm sure that is correct.
The tricky bit is intent.
I'm also curious what percentage indicated that their dissatisfaction or hesitation to sign a contract would result in switching phone companies in the near future if other options were available. The problem is that some of those consumers are also in the "Cool! How much?" crowd. Or in the "I know what I said but I can't be bothered to change" crowd. Or in the "I changed my mind" crowd. In other words, a few months after intonating one way, they are behaving another way – either because they have forgotten what made them dissatisfied, or because of the sticker shock of paying full price for a phone versus the attractiveness of a heavily subsidized price with the incumbent, or for any other reason not easily predicted ahead of time.
The point is that switching behaviour can be a hard thing to predict from customer self-reported data. Ethnographic techniques, such as direct observation and interception, can be far more accurate in measuring switching behaviour.
It will be very interesting to see how things play out in the Canadian mobile space. Will customers act on their stated dissatisfaction or hatred of contracts? Or will they invalidate the data? We'll see where the dust settles in a year or two.
Special to The Globe and Mail
Mark Healy, P.Eng, MBA, is a partner at Satov Consultants – a management consultancy with practice areas in corporate strategy, customer strategy and operations strategy. Mark's focus areas inside the customer strategy practice include consumer insights, customer experience, innovation and go-to-market strategy. He is a regular speaker and media contributor on topics ranging from marketing to strategy, in telecom, retail and other sectors. Mark is known as much for his penchant for loud socks and a healthy NFL football obsession as he is for his commitment to Ivey and recent Ivey grads. He currently serves as chair of the Ivey Alumni Association board of directors. Mark lives with his wife Charlotte and their bulldog McDuff in Toronto.
Mark Healy