With the proliferation of media outlets, companies need to work harder to understand the importance of channel preference among UK consumers.
One of the biggest challenges facing every business is finding the best route to the customer. Media fragmentation means businesses now have an increasing number of ways to communicate with their consumers. Mail, web, SMS, email, social media, mobile – the choices present enormous opportunities, and challenges. This proliferation of media channels means the consumer is being inundated with unprecedented levels of information, whether that is marketing, transactional information or customer service. Some analysts estimate that the typical consumer is exposed to as many as 5,000 promotional messages a day [1].
A whole range of factors can influence a consumer’s channel preferences, from their age, gender, location and job, to the amount of free time they have, how much they travel, and which social media networks they use. In addition, the communication channel that a consumer prefers to use with their utilities provider, for example, is often completely different to the channel preferred for another supplier such as a favoured fashion retailer.
To investigate how well businesses in various sectors are responding to their customers’ channel preferences, Millnet DS surveyed 1500 UK consumers to ascertain how successful they felt companies were at accommodating their channel preferences, and which sectors they felt performed the best, and worst at doing so.
The findings show a clear trend for older consumers to be more satisfied with companies’ efforts to accommodate their channel preferences, when compared with their younger counterparts. 58.5% of those aged 18-24 in the UK claim to have their communication channel preferences ignored by at least half of all companies they buy from, compared to 21.7% of those aged 55-64; the lowest of all the age groups. However, a statistically significant decrease occurs at the 45yrs mark.
There are a number of credible reasons for these results. One is that companies are focusing their efforts on the section of the population with the biggest disposable income. The channel challenge has become so tricky to negotiate that they have chosen to prioritise the section of their audience that it’s most important to retain, and who are most likely to have the income to buy additional services. It may also be presumed that since younger consumers are generally present and active across a greater range of channels spanning from mobile to email to social networking, it is harder for companies to ascertain their channel preferences and use it successfully. On the other hand opportunities to show over 55’s intimate knowledge of their preferences may be limited to a select few media such as mail and phone [2].
Nevertheless, businesses ignore Gen Y (those born in the mid-eighties and early-nineties) at their peril. They are the second biggest section of the UK population numbering 75 million, second only to the Baby Boomers. A Deloitte report for the retail banking sector suggests that Gen Y customers are soon to be the most important customers, with a spending force of $2.45 trillion by 2015 [3]. There is also evidence to suggest that Gen Y not only have considerable influence over each other’s, but also interestingly their parents’, retail choices [4]. Therefore, by alienating Gen Y, business could well be alienating the very group in society believed to have the greatest spending power.
Delivering communications via the customer’s preferred channel balance is a complex challenge. There are now a number of ways a business can communicate with their consumers, but if they do not take the time to learn their consumers channel preferences they risk losing them. In short, knowing the customer – spending time and resource on data collection and analysis and building customer profiles – is a critical component of successful communication, and ultimately, customer value.
By Yolanda Noble, CEO at Millnet DS
[1] Marketing Made Simple, ‘How to cut through marketing clutter’, http://www.marketing-made-simple.com/articles/promotional-clutter.htm#.VAhO3fldU_l
[2] GI Insight, ‘Customer Intimacy’, p.5
[3] Deloitte, ‘Catalysts for change, the implications of Gen Y consumers for banks’, http://www.deloitte.com/assets/Dcom-Portugal/Local%20Assets/Documents/pt(pt)_fsi_catalystsforchange_15072008.pdf, p.2, 2008
[4] River Research, ‘Gen Y Must influence your brand’ http://www.riverresearch.net/gen-y-must-influence-your-brand-2/, 17 June 2013
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