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The explosion in consumer choice

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  • 1. Choices, choices, choices.The rise in consumer choice and how charitiesshould respondOctober 2011Tel: 020 7426 8888Email: joe.saxton@nfpsynergy.netWeb: www.nfpsynergy.net
  • 2. The talk in a nutshell• Choice is mushrooming• What do we think of this growth in choice• This is driven by technology, regulation, competition and culture• We learn to cope with this choice in a number of ways• What choice do charities offer?• So how do charities mirror and respond to this rise in choice o With branding o With motivations o With products o With supporter-centred strategies2
  • 3. The talk in a nutshell• Choice is mushrooming• What do we think of this growth in choice• This is driven by technology, regulation, competition and culture• We learn to cope with this choice in a number of ways• What choice do charities offer?• So how do charities mirror and respond to this rise in choice o With branding o With motivations o With products o With supporter-centred strategies3
  • 4. If you went to Starbucks and got a differentdrink every weekday, how long before you wouldhave to have a drink for a second time?
  • 5. Complexity and Managing Choice Modern choice culture allows consumers to express all manner of preferences not always directly related to price and functionality.5
  • 6. Mobile phone tariffsNumber of different tariffs available at the Carphone Warehouse 3000 2500 2000 1500 1000 500 0 1992 1993 1996 1999 2001 2006 2008 2009 Source: Carphone Warehouse/nVision6 Base: UK
  • 7. Number of unique shopping baskets available forvarious product combinations 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Orange juice & Milk & bread Tea & bread Cereal & washing chicken pieces powder/liquid Source: nVision Fieldwork, March 20097
  • 8. Number of different kinds of products in the home 35% Breakfast cereals 30% Shampoos 25% Household cleaning 20% products 15% 10% 5% 0% 0 1 2 3 4 5 6 7 8 9 10 11+ Source: Complicated Lives /The Future Foundation, 2000 Base: All aged 18+
  • 9. Number of television channels available1990 - 2004 1000 900 800 Sky multichannel CH 5 Digital TV 700 package 600 500 400 300 200 100 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: nVision, UK
  • 10. Products available at multiple storesNumber of products at two top multiple retailers 45000 Sainsburys (average lines per store) 40000 Tesco (total lines across all stores) 35000 30000 25000 20000 15000 10000 5000 0 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 Source: nVision, UK
  • 11. Even a bigger wardrobe can add complications o “In my wardrobe, I had (in the fifties) my everyday clothes, skirts, sweaters and blouses, and my Sunday clothes, one coat, two pairs of shoes and a best dress” (Woman, AB, 70s)Compare this with a 20 year old woman today: o “I have so many clothes, I‟ve got nowhere to put them …but I‟ve still got nothing to wear!” (Woman AB, 20)
  • 12. If you went to Starbucks and got a differentdrink every weekday, how long before you wouldhave to have a drink for a second time?
  • 13. 13
  • 14. If you went to Starbucks and got a differentdrink every weekday, how long before you wouldhave to have a drink for a second time? So 87,000 divided by 5 days a week divided by 52 weeks a year is 334 years!
  • 15. The talk in a nutshell• Choice is mushrooming• What do we think of this growth in choice• This is driven by technology, regulation, competition and culture• We learn to cope with this choice in a number of ways• What choice do charities offer?• So how do charities mirror and respond to this rise in choice o With branding o With motivations o With products o With supporter-centred strategies15
  • 16. “When making an important purchase decision (likea holiday, computer, car or mobile phone) thesedays there is too much information to go through”% who agree or agree strongly by gender, age, social grade Source: nVision Research16 Base: 1,000 face-to-face respondents aged 16+, GB
  • 17. “When looking to buy the following products orservices, in which of these cases have you used pricecomparison websites as part of your decision makingprocess?”% who use them to buy the following products or services Source: nVision Research 17 Base: 2,207 online respondents aged 16+, GB, 2011
  • 18. “I often share tips on how to cut costs and save money ” % who agree or agree strongly by gender, age and social grade100% Agree Strongly agree90%80%70%60%50%40%30%20%10% 0% 16-24 25-34 35-44 45-54 55-64 Total Female 65+ Male AB DE C2 C1 Source: nVision Research 18 Base: 1,000 online respondents aged 16+, 2010, GB
  • 19. “Have you recommended any of the following to a friend or family in the last 12 months?” % who have recommended the following to family and friends 0% 10% 20% 30% 40% 50% 60% A film A restaurant A book A holiday location A hotel A band A travel websiteA theatre performance A comedy show A music venue A musical A spa location A travel agent Source: lastminute.com/The Future Foundation/nVision19 Base: 1,000 respondents aged 16-65, GB, 2010
  • 20. Influential sources when choosing particular leisureactivities“Thinking of the time you last did each activity, which of the followingsources, if any, were influential in your choice?” 0% 10% 20% 30% 40% 50% 60% A recommendation from friends or family Personal experience Coverage on the internet A special offer or promotion Online advertising TV programme Offline advertising Travel destination Through social networking discussions A sales person / shop assistant Restaurant for a special occasion Coverage in a blog Live event Other None of these Source: lastminute.com/The Future Foundation/nVision20 Base: 900-950 aged 16-65 who do each activity, GB, 2010
  • 21. “A well-known brand is the best assurance of quality there is” % who agree or agree strongly, by gender, age and social grade100% Agree strongly Agree90%80%70%60%50%40%30%20%10% 0% 25-34 16-24 35-44 45-54 55-64 Total Female 65+ Male AB DE C1 C2 Source: Friends Life/The Future Foundation/nVision 21 Base: 1,000 online respondents aged 16+, GB, 2011
  • 22. “I regularly review my financial services products toensure I’m getting the best possible deal”% who agree or agree strongly, by gender, age and social grade Source: Friends Life/The Future Foundation/nVision Research22 Base: 1,000-2,000 online respondents aged 16+, GB
  • 23. It is so hard to make perfect choices“When buying a holiday, computer, car or mobile phone these daysthere is too much information to go through.” 100% 1999 2007 2010 80% 60% 40% 20% 0% Male Female Source: nVision Research23 Base: 1,000 face-to-face respondents aged 16+, GB
  • 24. Compared prices online forecast% of adults who have compared prices online in the last 6 months 100% Price comparison forecast 90% Price comparison - actual 80% Internet users (those using it at least once a week) - forecast 70% 60% 50% 40% 30% 20% 10% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: nVision Research24 Base: 1,200 respondents aged 15+, GB
  • 25. The talk in a nutshell• Choice is mushrooming• What do we think of this growth in choice• This is driven by technology, regulation, competition and culture• We learn to cope with this choice in a number of ways• What choice do charities offer?• So how do charities mirror and respond to this rise in choice o With branding o With motivations o With products o With supporter-centred strategies25
  • 26. Expectation of choice and the need for instantgratification• Choice is increasing in every area of our lives… and we employ different strategies for managing it• Choice driven by competition o More than 8,500 mortgages, 1,600 models of new car• Choice driven by technology o More than 2500 mobile phone tariffs in Carphone Warehouse alone o 900+ TV channels (up from 4 only 10 – 15 years ago)• Choice driven by deregulation o 16 choices of electricity supplier o 22 choices of gas supplier… from a base of no choice of utility supplier as recently as 1990
  • 27. Mobile phone penetration by ageProportion of adults who own a mobile phone - nVision forecast 100% 90% 80% 70% 60% 50% 40% 30% 16-24 actual 25-34 actual 20% 35-44 actual 45-54 actual 55-64 actual 65+ actual 16-24 25-34 10% 35-44 45-54 55-64 65+ 0% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: „Changing Lives‟, nVision Base: 1000 adults 16+, UK
  • 28. Proportion who have internet access anywhere, by age"Do you have access to the internet? At home; At work; At school/college;Somewhere else“ * Excludes “Don‟t Know” 90% Jul-00 Jul-03 Jul-05 80% 70% 60% 50% 40% 30% 20% 10% 0% All 16-24 25-34 35-44 45-54 55-64 65+ Source: „Changing Lives‟, nVision Base: 1000 adults 16+, UK
  • 29. People participating in social networking websites“Which of the following, if any, have you done on the internet in the last 6months…? Created / updated a personal profile on a social networking site(e.g. facebook / myspace / bebo)” 45% Spring 2008 Autumn 2008 Autumn 2009 Summer 2010 40% 35% 30% 25% 20% 15% 10% 5% 0% Female Male Total C2DE ABC1 15-34 35-54 55+ Source: nVision Research Base: 1,000 face-to-face respondents aged 16+, GB
  • 30. Digital / Multichannel TV progress% of TV households 100% 90% Total multichannel 80% Total digital 70% Satellite 60% DTT-only 50% 40% Cable 30% 20% 10% 0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Ofcom Digital TV Update/nVision Base: UK
  • 31. The talk in a nutshell• Choice is mushrooming• What do we think of this growth in choice• This is driven by technology, regulation, competition and culture• We learn to cope with this choice in a number of ways• What choice do charities offer?• So how do charities mirror and respond to this rise in choice o With branding o With motivations o With products o With supporter-centred strategies31
  • 32. Faced with too much choiceWhat strategies do consumers adopt?  Brands as Values/ Relax Independent choice ethical search Price advisors managers concerns criteria Depends on Profit-making Not for profit interest in category Source: Citizen Brands, Michael Willmott/Future Foundation 2001
  • 33. The importance of irrationality• Charities deal with complex social issues and need a rational focus .… this can translate into the belief that appeals must be completely rational• Facts in some studies have been shown to be a turn- off for donors o Experiment where people were asked to talk about babies (emotions) or to do math calculations (rational) – the latter donated less o Experiment where people in one group could donate to a fund for medical treatment to save the life of 1 child or the lives of 8 children – people donated twice as much money to help save that one child• Often an irrational world where brands, celebrities, fashions, emotions rule• Disproportionate concern on individuals e.g Amanda Knox, Madeleine McCann, Cheryl Cole• The solution – a „Darfur Puppy‟ as the way to make mass human disasters matter Source: Nicholas Kristof, New York Times, “Save The Darfur Puppy”, 9th May 2007
  • 34. Learned helplessness• Perceived lack of control can result in feelings of paralysis or in conceding defeat• People today have access to more information about the world than at any other point in history. News of disasters, wars and terrorist activities flood in everyday• All of this can leave donors feeling that their actions are futile and that nothing they do will make a difference… o Feelings about climate change move from disbelief to paralysis
  • 35. Continuous Partial Attention • CPA is described as a new phenomenon of juggling tasks that require a reasonable amount of cognitive engagement o Listening to this talk, scanning your Blackberry for work emails and emails from friends about social arrangements o More complex tasks than multi-tasking • Linda Stone of Microsoft and Apple describes CPA as a behaviour we have learned to help us cope with an information rich environment: o “In this sleep-deprived, interruption-driven, always-on world, our ability to focus is compromised. In trying to process a never-ending and ever-widening stream of incoming data, we can put off decisions indefinitely or even burn out.” • How can you communicate with supporters in a way that doesn‟t increase sensory overload?
  • 36. “I often cant be bothered to make a decision, Idrather other people made it for me” 40% Agree Agree strongly 35% 30% 25% 20% 15% 10% 5% 0% Total 65+ 15-24 25-34 35-44 45-54 55-64 Source: nVision Research36 Base: 1,200 respondents aged 15+, GB, 2008
  • 37. The talk in a nutshell• Choice is mushrooming• What do we think of this growth in choice• This is driven by technology, regulation, competition and culture• We learn to cope with this choice in a number of ways• What choice do charities offer?• So how do charities mirror and respond to this rise in choice o With branding o With motivations o With products o With supporter-centred strategies37
  • 38. My hypothesis is that we don’t offer real choice to supporters of charities because we don’t do enough to help them choose – we don’t provide the mechanisms for choice that they understand.38
  • 39. Choice in charities• We could be offering choice between charities• We could be offering choice in how to support charities• We could be offering better brand distinction• We could be offering better choice of mechanisms to engage• We could be offering better mechanism to help evaluation of impact39
  • 40. The talk in a nutshell• Choice is mushrooming• What do we think of this growth in choice• This is driven by technology, regulation, competition and culture• We learn to cope with this choice in a number of ways• What choice do charities offer?• So how do charities mirror and respond to this rise in choice o With branding o With motivations o With products o With supporter-centred strategies40
  • 41. Choice through branding• What makes an organisation different?• What is its niche• What kind of people are mostly likely to support it• What reasons would they have to support it41
  • 42. Choice through motivationsThe motivationsIdeologyBeliefsCapabilitySpecificsEnvironment42
  • 43. Five motivations in more detailsThe motivation The descriptionsIdeology This charity shares my view of the world and how it works or should work – my ideologyBeliefs This charity share my beliefs about a right or wrong in the world and how to solve itCapability This charity has shown they have the capability to do the good that I want doneSpecifics This act is a specific, achievable good thing that I can doEnvironment This act benefits me, my life or my immediate world43
  • 44. Five motivations in more details More about the Greater cause and the loyaltyThe motivation issueIdeologyBeliefsCapabilitySpecificsEnvironment More about More on the donor & volunteering and their concerns reactive support44
  • 45. Five motivations in more detailsThe motivation The examplesIdeology Political parties, GreenpeaceBeliefs Amnesty InternationalCapability Red CrossSpecifics Plan UK Child sponsorship, Smile TrainEnvironment Comic Relief, Local charities45
  • 46. Choice through productisation• How much money is wanted• Why is it wanted• What sorted of feedback will donors get• What impact will it have• What kinds of people will value it the most46