Wednesday, October 30, 2013

Problem: AT&T Losing Phone Customers. Solution: Take Two (Or More) Tablets & Call Me Next Quarter

It was Mark Twain who noted that names are not always what they seem. Take AT&T, for example, the acronym for the “American Telephone & Telegraph” company, although we’re not so sure whether many consumers actually remember that. Partially because they’ve used “AT&T” for a long, long time, but mostly because telegraph via wires disappeared in the very early 20th century thanks to Marconi, and traditional telephones gave way to cellphones and smartphones, thanks to Motorola in the early 1970’s.

But today – given consumer trends – the AT&T acronym would be better translated as “American Telephone & Tablet” company, because according to reports of 3rd Quarter growth, consumers buying data plans to support tablets are fueling AT&T’s net subscriber growth, which is good news. But from a bottom-line basis, consumers who just buy data plans bring in less revenue, which is not such good news.

The trend has been reflected in what drives the Wireless Carrier category. According to our Customer Loyalty Engagement Index, the category that was once driven by “Brand Reputation and Technological Leadership” has shifted to “Equipment,” with tablets at the top of the list of technology consumers crave most. And “A Selection of Calling Plans” has changed to “Data Options,” including elements like daily data options for tablets and lower-data plans for smartphones. What hasn't changed are consumer desires for “Larger/Faster/Uninterrupted Networks” and “Customer Service.”

As this is technology we’re talking about, it’s not surprising to find that consumers have very high expectations regarding delivery on these drivers, but particularly when it comes to “Data Options.” If we calculate the consumer Ideal at 100%, here’s how the wireless carriers’ own customers currently evaluate the major brands in meeting their expectations:
  1. Verizon Wireless 89%
  2. AT&T Wireless 83%
  3. Sprint 80%
  4. T-Mobile 79%
While AT&T added more contract customers than it lost, most were for tablets. To combat that shift, they’ve added a range of plans for smartphones; $40.00 for 450 minutes of voice calling plus added costs for data usage and texts, upwards of $100.00 for 2 gigabytes of data, plus unlimited calling and texting. But as consumers can get 3 gigabytes of data for their tablets, as low as $30.00 a month, you don’t need a calculator app on your tablet to do that math and see what is (and isn’t) more lucrative for the carrier.
  
It was technology columnist, Walt Mossberg, who said, “After spending hours with it (the iPad), I believe this beautiful new touch-screen device has the potential to change portable computing profoundly, and to challenge the primacy of the laptop.”

And apparently the primacy of contract calling customers for wireless carriers, too.


Connect with Robert on LinkedIn.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Thursday, October 24, 2013

Why Cheap Doesn’t Always Drive Sales


Here’s our mantra: You need to know what people think, not what they say they think.

And, not so much a mantra as a universal truth – commodities notwithstanding – consumers may say they want “cheap,” but that’s usually not what they really expect. Oh, sure, they want to pay a little as possible, but it’s not the way they’ll actually behave when they get around to factoring in what they really expect. The “cheap” part is the rational aspect of decision making, but the expectations part is mostly emotional, and it’s a really good idea to have a fix on those expectations before creating products and taking them to market, because relying only on what people say, can take you down the wrong highway.

For example, four years ago we wrote about the Nano, from India’s Tata Motors. It sold for under $1,800.00. No, not a typo, it was priced to drive off the lot at just under eighteen hundred dollars! Sure, this was the Indian market, but it was conceived as the people’s car. Small, economical, and because the target audience said they’d buy such a car if it was “cheap.” And it was. Cheap, I mean. In lots of ways. Low sticker price, sure. But the car, too. It had a tiny, 0.6-liter engine with only 33 horsepower. The front and rear bumpers were plastic and most of the construction was glued, not welded. Seats couldn’t be adjusted. It had only one side mirror and windshield wiper, hand-cranked windows, a manual transmission and no airbags, hubcaps, or radio. And no AC. It didn’t even have a glove compartment. Sure the engine sometimes sounded like a broken lawnmower, but the Nano got 50 miles to the gallon, so what’s to complain about? Basic car? Sure. Cheap? For sure.

OK, back to the say-versus-think paradigm. Automotive brand success – all brand success, for that matter – is based upon how well a brand meets or exceeds customer expectations for the category Ideal. Expectations will vary by category and demography and geography, to be sure, but most of those expectations are emotionally-driven (no pun intended), many of which go unarticulated. And brands that are able to meet real expectation always do better in the marketplace. But, since folks said they would buy something cheap, Tata Motors produced a really cheap car and thought it was going to be a real growth area for them.

But after nearly 5 years, sales ran out of gas. Why? Well, even though consumers said they wanted “cheap,” there’s cheap (as in price/rational) and there’s cheap (as in image/emotional), and – as usually happens – emotion won, and Tata Motors lost. Turns out that consumers really wanted a more upscale image, expectations for automotive imagery being really high even among the more price-sensitive consumer segments, and pretty much true around the world. So Tata is bringing the Nano in for an image tune-up, to move it from “common” to “cool.”

With that in mind, the new models will have hubcaps. And a Bluetooth-enabled stereo with four speakers, a more comfortable interior, and chrome trim. Oh, and a glove compartment. The top-end Nano LX will cost about twice what the original models cost, so just under $3,600.00. Their new advertising tagline for the new models? “Celebrate Awesomeness.”

Of course, when it comes to “awesomeness,” you may expect something else. Which is probably why it’s a good idea to measure what your target audience really thinks and really expects before you disappoint them – and your shareholders.



Connect with Robert on LinkedIn.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Wednesday, October 16, 2013

Coming Soon the Apple iPhablet (Maybe)




Four years ago, when we were examining leading-indicator values and expectations of what was the then-nascent “tablet” category, we saw consumer values dealing with tablets and telecommunications were blending. The result? Tablet attributes, benefits, and values combining with something that let you make a call. A little ahead of its time? Sure, but that’s the nice thing about real loyalty and engagement metrics. They’re leading-indicators, meaning they’re signs of what’s going to happen down the road.

Anyway, at the time we called the fusion of smartphone and tablet technologies a “phablet.” OK, not the most creative of titles, but at that juncture it really didn’t matter what we called them because there weren’t enough of them to matter, and certainly not enough to measure. But all that said an amalgam of the two was showing up on the radar. Dell introduced a hybrid back then they called the “Streak,” but after a year and only a 3% share of market, it vanished from the market.

Four years later and it’s no surprise to anyone that technology moves fast, but it sometimes even technology has to decelerate to keep up with to consumer expectations. Those values we talked about four years ago have created even more heightened phablet blips on our loyalty-engagement radar screen, according to our most recent Customer Loyalty Engagement Index. So here we are, back to the future. And while the “phablet” category is still too new and too small to track, the way customer expectations are going and technology has been, perhaps we’ll have those numbers for you sooner rather than later. 

Samsung has been introducing larger and larger smartphone screens, and larger smartphone screens seem extremely popular with consumers. In the Asia-Pacific market they’ve been reported as outselling tablets. With that kind of success it can’t be too long before other brands follow. In fact, the most recent tech rumor is that the Apple iPhone 6 will come very close to having a 6” display. With these kinds of category reports and brand rumors, questions abound: Which values will supersede others? Smartphones or tablets? Does size really matter? Will “phablets” finally become a category unto itself? Will consumers flock to this new configuration? And, where can I get one?

Three things for sure. First, consumer expectations will continue to grow, especially when it comes to fusing technologies that have previously delighted consumers. Second, predictive loyalty and engagement assessments can help to answer those questions, and quite specifically at the early stage. And third, you want those answers because it prevents brands from confusing the art of possibility with the art of profitability.




Connect with Robert on LinkedIn.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Wednesday, October 09, 2013

Week #2 Of Shutdown Slices Political Party Brand Scores: Dems -10%, G.O.P. -17%


On the brand front in Shutdown Week #2, the Republican brand is taking the brunt of voter frustration. The brand’s engagement assessment – its ability to meet Republican voter expectations for their Ideal Political Party – got sliced another 5% this week. The Democratic brand was cut another 3%, according to 450 registered Democrats and 467 registered Republicans (all non-government workers), using our highly-validated emotional brand engagement assessment, with the party brands seen this week to uphold the values of their Ideal as follows:

                       Democratic Party Brand             Republican Party Brand

10/10/12                   83%                                              77%
10/02/13                   76%                                              65%
10/08/13                   73%                                              60%

The four engagement drivers of the Ideal Political Party (calculated to be 100%) can best be described as Action, Compassion, Perception, and Resolve. See previous post for definitions of each. Each group of registered voters defines what’s important to them via their Ideal.

Democrats see their Ideal Political Party this way. They lost brand engagement strength in week #2 of the shutdown on the 4th most-important driver, Action:
  1. Perception
  2. Resolve
  3. Compassion
  4. Action
Republicans, on the other hand, view their Ideal Political Party differently, which shouldn’t surprise anyone, but they lost more brand engagement ground this week, and on three drivers: Perception, Action, and Compassion. They did, however, maintain engagement strength on their 1st most-important driver, Resolve. Make of that what you will.
  1. Resolve
  2. Perception
  3. Action
  4. Compassion
Speaker John Boehner, who’s been badly panned as the human embodiment of the Republican brand, has recently adopted a slightly more conciliatory tone saying, "There's nothing on the table, there's nothing off the table." But with default looming, no resolution in sight, and most economists opining a default would be cataclysmic; in light of more Republican brand losses, everything in the world of brands indicates the Speaker ought to find something to put on the table. And do it quickly because real brand engagement assessments have been independently validated to provide very accurate reads as to how consumers will behave in the marketplace.

Because when it comes to maintaining high levels of brand engagement, whether for pizza or political parties, what consumers and voters both look for is their brands to deliver.



Connect with Robert on LinkedIn.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Thursday, October 03, 2013

With Government Shut Down, Which Political Party Brand Takes Bigger Hit?



After years dealing with financial crises on a last-minute basis, House Republicans and Senate Democrats couldn't get organized enough to break the politically charged budget standoff over President Obama’s Affordable Care Act. Unable to organize an accord, lawmakers allowed the government to shut down. We know how this will effect government services, but how does the shutdown effect how the electorate sees the political parties themselves?

We use a highly validated emotional brand engagement assessment to measure B2B and B2C brands and we did the same thing for each of the major political parties. The assessment combines psychological inquiry and higher-order statistical analyses to “fuse” emotional and rational values, in this case those dealing with how the electorate sees their Ideal political party. Brand engagement assessments, whether for pizza or political parties, measures what consumers think – as opposed to what they say they think, and from a brand perspective provides an accurate read to how consumers, or in the case of political parties and their candidates, the electorate, will behave.  We’ve used this model of engagement-ties-closely-to-behavior for every Presidential election since Bill Clinton ran in 1992 and the metrics have predicted the winner in every election – except in 2000, where George W. Bush beat Al Gore. You to be the judge about that one.

When it comes to Political Parties, four engagement drivers (and attendant expectation levels voters hold for each of those drivers) define the Ideal. The order of engagement drivers (and their associated expectations) vary in terms of what’s important to Democrats and Republicans, hence different party views and political brand affiliation. The drivers can be briefly described as follows:

Action: Does the party have a comprehensive, realistic, well-considered plan for solving the problems facing the country?

Compassion: Does the party care about all the people?

Perception: Does the party have a deep understanding of the problems facing the county?

Resolve: Does the party have the strength and leadership to guide the country?

Democrats see their Ideal Political Party as follows:
  1. Perception
  2. Resolve
  3. Compassion
  4. Action
Republicans view their Ideal Political Party this way:

  1. Resolve
  2. Perception
  3. Action
  4. Compassion
For Democrats, the driver with the highest expectations is “Compassion.” For Republicans it’s “Action.” Again, you be the judge about that.


We took this measure during the 2012 Presidential election, so it provides an up-to-date benchmark against which to measure how 253 registered Democrats and 267 registered Republicans (all non-government workers) rated how well their party upheld these values post-government shutdown. The Ideal is calculated to be 100%, and here’s how things currently stand.

                       Democratic Party                   Republican Party

2012                            83%                                         77%

2013                            76%                                         65%

If you do the math, The Democratic party saw their brand engagement strength decrease by 7%, the Republicans brand by a bit more, -12%. One brand engagement certainty we’ve seen play out over the years is something called the “Engagement Rule of Six,” which states that where brands are stronger than the competition, consumers are six times more likely to give them the benefit of the doubt in uncertain circumstances, which is a pretty fair description of a Federal government shutdown. So the usual finger pointing and political rhetoric notwithstanding, it’s likely the Democratic brand will come out a bit better than the Republican brand.                 

It was Will Rogers who noted, “I am not a member of any organized political party. I am a Democrat.” That was 81 years ago, and Democrat or Republican, the sentiment is worth taking to heart. Because whether a political party or a consumer brand, if you are so disorganized that you are unable to meet customer expectations, you always lose in the marketplace. Or, as is likely in this case, the voting booth.



Connect with Robert on LinkedIn.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.