Winning and Losing in the Multi-play Market Report sponsored by BT Wholesale  Directed by Gareth Deere of Ipsos MORI Novem...
Key questions we aim to answer <ul><li>Which multi-play services deliver the highest value to customers? </li></ul><ul><li...
Methodology <ul><li>635 consumer interviews </li></ul><ul><li>Fieldwork conducted in September 2006 </li></ul><ul><li>All ...
Current average spend on multi-play services from any supplier Base: all (635) £76 £57 Cable customers – broadband, landli...
Our choice model package components <ul><li>Broadband speed </li></ul><ul><li>16 Mbps (£20) </li></ul><ul><li>8 Mbps (£10)...
Broadband a must have although speed not so important No brand seems to own multi-play Base: all (635) Low 100 anytime min...
For analysis we compare two packages <ul><li>A. Base Package at £13.50 per month </li></ul><ul><li>2 Mbps of broadband </l...
Not all about price, upgrade in service levels can drive value Base: all (635) 53% 47% Full package at £84 per month 16 Mb...
The impact of different elements… Base: all (635) 80% +3% 20% Mobile Tariff  –  500 inclusive call minutes and 250 texts p...
Taking out broadband significantly reduces attractiveness of proposition  Base: all (635) 81% (-28%) 19% No broadband  but...
Around a half would take out bundle offer in preference to a la carte arrangements  Full offer -  £84 per month
Sky customers most likely to single source multi-play services, also most likely to stay with Sky Full offer -  £84 per mo...
Loyalty Optimizer ™  Framework <ul><li>Loyalty Index and segments : First understand how loyal and valuable your customers...
The Ipsos Loyalty Index combines attitude and behaviour to provide a robust measure of Loyalty Behavioural Measures Share ...
The Loyalty Index & Loyalty/Value Segments Loyalty  Index Value Loyalty Index and Value: key indicators for customer relat...
Overall UK Broadband market Loyalty Score   =   51 Loyalty  Index Value Core Customers Low Value Contented Customers Low V...
Three quarters of UK landline customers are high value, reflecting legacy of BT Overall UK Landline market Loyalty Score =...
Digital TV customers most loyal, reflecting lack of choice Overall UK TV market Loyalty Score =  57 Loyalty  Index Value C...
Roughly a quarter each segment for mobile phone, reflecting healthy competition Overall UK Mobile market Loyalty Score =  ...
Loyalty diagnostics: Understanding  what drives loyalty  <ul><li>Now that we understand the customer base in terms of loya...
Loyalty diagnostics: Understanding what drives loyalty  <ul><li>Now that we understand the customer base in terms of loyal...
Building blocks of loyalty “ Relationship” most important building block for mobile and landline, experience for “Broadban...
Satisfaction with the service and perceptions of quality are drivers of loyalty whilst trust and affinity are barriers to ...
Lack of trust, affinity and differentiation are barriers, perceived quality a main driver Familiarity Popularity Different...
Relevance and familiarity drive loyalty (likely to be a result of BT)  whilst trust and affinity are barriers to loyalty F...
Relevance is a key driver of loyalty – this is likely to relate to relevant channel packages Familiarity Popularity Differ...
Four steps to capture market  share in the multi-play market <ul><li>For acquisition: </li></ul><ul><li>Accentuate a value...
Thank you For further information contact gareth.deere@ipsos-mori.com 020 7347 3000 [email_address]  07850 760106
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Multiplay services

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  • Multiplay services

    1. 1. Winning and Losing in the Multi-play Market Report sponsored by BT Wholesale Directed by Gareth Deere of Ipsos MORI November 2006
    2. 2. Key questions we aim to answer <ul><li>Which multi-play services deliver the highest value to customers? </li></ul><ul><li>Which elements are most appealing to potential switchers? </li></ul><ul><li>How do I defend my customer base and acquire new customers? </li></ul><ul><li>Will my brand stretch across platforms? </li></ul>
    3. 3. Methodology <ul><li>635 consumer interviews </li></ul><ul><li>Fieldwork conducted in September 2006 </li></ul><ul><li>All current end-users of multi-play services: that is they all have broadband internet, a mobile phone subscription, Digital TV in the household and a landline telephone subscription </li></ul><ul><li>The study was conducted online. Quotas were set to provide a national sample for our target audience </li></ul>
    4. 4. Current average spend on multi-play services from any supplier Base: all (635) £76 £57 Cable customers – broadband, landline or TV; NTL, Telewest or Blueyonder £93 £72 Sky TV Customers £77 £57 Orange/Wanadoo customer – mobile or broadband £75 £56 Overall average monthly spend £77 £58 BT Landline customers Current monthly spend on TV, broadband, landline and mobile Current monthly spend on TV, broadband and landline
    5. 5. Our choice model package components <ul><li>Broadband speed </li></ul><ul><li>16 Mbps (£20) </li></ul><ul><li>8 Mbps (£10) </li></ul><ul><li>2 Mbps (£5) </li></ul><ul><li>Not part of bundle </li></ul><ul><li>Television package </li></ul><ul><li>All digital channels including sports and movies (£40) </li></ul><ul><li>All digital channels not including sports and movies (£20) </li></ul><ul><li>Free channels only, not part of bundle </li></ul><ul><li>Landline telephone </li></ul><ul><li>Free calls anytime plus 25% off calls to mobiles (£20) </li></ul><ul><li>Free calls evenings and weekends (£10) </li></ul><ul><li>Not part of bundle </li></ul><ul><li>Mobile telephone </li></ul><ul><li>500 anytime any network minutes plus 250 texts (£40) </li></ul><ul><li>100 anytime any network minutes plus 50 texts (£20) </li></ul><ul><li>Not part of bundle </li></ul><ul><li>Provider </li></ul><ul><li>Cable: NTL/Telewest </li></ul><ul><li>Landline/ISP: BT </li></ul><ul><li>Mobile/ISP: Orange/Wanadoo </li></ul><ul><li>Satellite TV: Sky </li></ul><ul><li>Retailer: Tesco </li></ul><ul><li>Mobile operator: Vodafone </li></ul><ul><li>Bundle discounts </li></ul><ul><li>10% </li></ul><ul><li>20% </li></ul><ul><li>30% </li></ul>
    6. 6. Broadband a must have although speed not so important No brand seems to own multi-play Base: all (635) Low 100 anytime minutes, 50 texts 500 anytime minutes, 250 texts None Free evening and weekend calls Free anytime and 25% off mobile calls None Free digital channels only All digital channels but no sports or movies All digital channels, sports and movies None 2Mbps 8Mbps 16Mbps None Vodafone Tesco Sky Orange BT NTL High Price 48% Broadband 22% more preferable less preferable more important less important TV 12% Landline 10% Provider 6% Mobile 2%
    7. 7. For analysis we compare two packages <ul><li>A. Base Package at £13.50 per month </li></ul><ul><li>2 Mbps of broadband </li></ul><ul><li>Free digital channels only </li></ul><ul><li>Free evening and weekend calls </li></ul><ul><li>No mobile phone </li></ul><ul><li>No discount </li></ul>B. Full package at £84 per month 16 Mbps for broadband All digital channels including sports, movies Free anytime calls to landline and 25% off mobile calls, Mobile phone 500 anytime minutes with 250 texts 30% discount Versus
    8. 8. Not all about price, upgrade in service levels can drive value Base: all (635) 53% 47% Full package at £84 per month 16 Mbps for broadband, all digital channels, with sports and movies, free anytime and 25% off mobile calls, mobile phone 500 inclusive anytime minutes, 250 texts, 30% discount 83% 17% Base Package at £13.50 per month 2 Mbps of broadband, free digital channels only, free evening and weekend calls, no mobile phone, no discount % who would stick with a la carte arrangements % who would switch to multi-play offer from one supplier
    9. 9. The impact of different elements… Base: all (635) 80% +3% 20% Mobile Tariff – 500 inclusive call minutes and 250 texts per month at £49.50 83% 0% 17% Landline – Free anytime inclusive minutes and 25% off calls to mobile at £22.50 79% +4% 21% Broadband – upgrade to 16Mbps at £27 77% +6% 23% TV – upgrade to all digital channels + sports and movies at £49.50 73% +10% 27% Price – 30% discount on base package at £10.50 % who would stick with current arrangements % difference compared to base package % who would switch Different elements added into base package (2 Mbps of broadband, free digital channels only, free evening and weekend calls, no mobile phone, no discount)
    10. 10. Taking out broadband significantly reduces attractiveness of proposition Base: all (635) 81% (-28%) 19% No broadband but all digital channels including sports and movies, free anytime landline calls and 25% off calls to mobiles, 500 inclusive mobile phone call minutes and 250 text messages, 30% discount – cost £70 per month % who would stick with current arrangements % difference compared to full package % who would switch Full package but no broadband
    11. 11. Around a half would take out bundle offer in preference to a la carte arrangements Full offer - £84 per month
    12. 12. Sky customers most likely to single source multi-play services, also most likely to stay with Sky Full offer - £84 per month
    13. 13. Loyalty Optimizer ™ Framework <ul><li>Loyalty Index and segments : First understand how loyal and valuable your customers are and which groups may offer either an opportunity or a threat </li></ul><ul><li>Loyalty diagnostics : Then understand what the key areas are that influence loyalty and value </li></ul>
    14. 14. The Ipsos Loyalty Index combines attitude and behaviour to provide a robust measure of Loyalty Behavioural Measures Share of Behaviour Number of Products Held Attitudinal Measures Brand Preference Repurchase Loyalty is a combination of attitude and behaviour We need BOTH <ul><li>Length of Relationship </li></ul><ul><li>Recent Change in Behaviour </li></ul><ul><li>Brand Preference </li></ul><ul><li>Likelihood to Continue </li></ul>The Loyalty Index
    15. 15. The Loyalty Index & Loyalty/Value Segments Loyalty Index Value Loyalty Index and Value: key indicators for customer relationship strategies Value measures the total expenditure in the sector, for the considered brand Median spend is used to determine high and low value Our Loyalty Index is a composite indicator mixing past behaviour and attitudes Core Customers Low Value Contented Customers Low Value Vulnerable Customers High Value Vulnerable Customers Segment size : 20% Segment size : 35% Segment size : 15% Segment size : 30%
    16. 16. Overall UK Broadband market Loyalty Score = 51 Loyalty Index Value Core Customers Low Value Contented Customers Low Value Vulnerable Customers High Value Vulnerable Customers Segment size : 20 % Segment size : 19 % Segment size : 29 % Segment size : 33 % Two thirds of the UK broadband market are relatively low value, suggesting strong price competition Loyalty segments – UK broadband market
    17. 17. Three quarters of UK landline customers are high value, reflecting legacy of BT Overall UK Landline market Loyalty Score = 52 Loyalty Index Value Core Customers Low Value Contented Customers Low Value Vulnerable Customers High Value Vulnerable Customers Segment size : 36 % Segment size : 39 % Segment size : 13 % Segment size : 12 % Loyalty segments – UK Landline market
    18. 18. Digital TV customers most loyal, reflecting lack of choice Overall UK TV market Loyalty Score = 57 Loyalty Index Value Core Customers Low Value Contented Customers Low Value Vulnerable Customers High Value Vulnerable Customers Segment size : 24 % Segment size : 27 % Segment size : 24 % Segment size : 25 % Loyalty segments – UK Digital TV market
    19. 19. Roughly a quarter each segment for mobile phone, reflecting healthy competition Overall UK Mobile market Loyalty Score = 51 Loyalty Index Value Core Customers Low Value Contented Customers Low Value Vulnerable Customers High Value Vulnerable Customers Segment size : 27 % Segment size : 23 % Segment size : 25 % Segment size : 25 % Loyalty segments – UK Mobile phone market
    20. 20. Loyalty diagnostics: Understanding what drives loyalty <ul><li>Now that we understand the customer base in terms of loyalty and value AND we understand who can and cannot be moved we look at how to influence these </li></ul><ul><li>The key dimensions of loyalty are: </li></ul><ul><li>We can look at how important each area is in driving loyalty and disloyalty </li></ul>Popular/Highly Thought of by Many The brand is perceived as the prevalent choice among others. Relative to the competition, the value of the brand and the price commanded is comparative. Comparison to Competitors’ Prices Relationship Experience Offer Brand Prominence Price Best Interests The brand acts like a partner and is regarded as having the customers best interests in mind (the way a friend would) Treats Fairly Confident that the brand will interact with the customer in a just and consistent manner. Quality Associated with a degree of excellence that can be counted on consistently. Satisfaction The brand provides a gratifying experience, fulfilling a need or meeting an expectation. Relevance The brand is pertinent to the situation and needs of the consumer. Differentiation The brand offers distinct advantages and/or has a unique image. Familiar A brand that is easily recognized and I know what it stands for and does. Willing to pay The price you pay is in accordance with the perceived value.
    21. 21. Loyalty diagnostics: Understanding what drives loyalty <ul><li>Now that we understand the customer base in terms of loyalty and value AND we understand who can and cannot be moved we look at how to influence these </li></ul><ul><li>The key dimensions of loyalty are: </li></ul><ul><li>We can look at how important each area is in driving loyalty and disloyalty </li></ul>Popular/Highly Thought of by Many The [BRAND] is a popular [CATEGORY] Costs more than others in this category Comparison to Competitors’ Prices Relationship Experience Offer Brand Prominence Price Best Interests They feel like a friend Treats Fairly I trust [BRAND] and believe they will treat me fairly Quality This [CATEGORY] offers consistent quality . Satisfaction Overall how satisfied are you with [BRAND]. Relevance THIS [CATEGORY] is appropriate and fits my lifestyle and needs Differentiation [BRAND] has unique or different features or a distinct image that other [CATEGORY] do not have Familiar I am familiar with and understand what this [CATEGORY] is about Willing to pay Costs more than I expected/am willing to pay
    22. 22. Building blocks of loyalty “ Relationship” most important building block for mobile and landline, experience for “Broadband” and Digital TV
    23. 23. Satisfaction with the service and perceptions of quality are drivers of loyalty whilst trust and affinity are barriers to loyalty Familiarity Popularity Differentiation Relevance Satisfaction Quality Trust Affinity Willingness to pay Comparison Overall contribution of building block Total UK Broadband market summary The importance of each Building Block and Mega Driver in explaining Loyalty Brand =14% Offer =16% Experience =31% Relationship =29% Price =10%
    24. 24. Lack of trust, affinity and differentiation are barriers, perceived quality a main driver Familiarity Popularity Differentiation Relevance Satisfaction Quality Trust Affinity Willingness to pay Comparison Overall contribution of building block Total UK Mobile Phone market summary The importance of each Building Block and Mega Driver in explaining Loyalty Brand =16% Offer =21% Experience =23% Relationship =30% Price =10%
    25. 25. Relevance and familiarity drive loyalty (likely to be a result of BT) whilst trust and affinity are barriers to loyalty Familiarity Popularity Differentiation Relevance Satisfaction Quality Trust Affinity Willingness to pay Comparison Overall contribution of building block Total Landline market summary The importance of each Building Block and Mega Driver in explaining Loyalty Brand =20% Offer =20% Experience =23% Relationship =31% Price =6%
    26. 26. Relevance is a key driver of loyalty – this is likely to relate to relevant channel packages Familiarity Popularity Differentiation Relevance Satisfaction Quality Trust Affinity Willingness to pay Comparison Overall contribution of building block Total UK Digital TV market summary The importance of each Building Block and Mega Driver in explaining Loyalty Brand =12% Offer =27% Experience =32% Relationship =25% Price =4%
    27. 27. Four steps to capture market share in the multi-play market <ul><li>For acquisition: </li></ul><ul><li>Accentuate a value based proposition </li></ul><ul><li>Broadband - the lead service </li></ul><ul><li>Consider options for premium TV </li></ul><ul><li>Build a multi-play brand </li></ul><ul><li>For retention: </li></ul><ul><li>Build and engender trust and a feeling of closeness with customers </li></ul><ul><li>Focus on reliability of service provision </li></ul><ul><li>Keep customers informed of your competitively priced bundles </li></ul><ul><li>Maintain a differentiated brand to shore up existing customers </li></ul>
    28. 28. Thank you For further information contact gareth.deere@ipsos-mori.com 020 7347 3000 [email_address] 07850 760106

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