The explosion in consumer choice

Choices, choices, choices. The rise in consumer choice and how charities should respond October 2011 Tel: 020 7426 8888

Email: [email protected]

Web: www.nfpsynergy.net

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 strategies

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o With branding

o With motivations

o With products


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If you went to Starbucks and got a different drink every weekday, how long before you would have 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.

0

500

1000

1500

2000

2500

3000

1992 1993 1996 1999 2001 2006 2008 2009

Mobile phone tariffs Number of different tariffs available at the Carphone Warehouse

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Source: Carphone Warehouse/nVision Base: UK

Number of unique shopping baskets available for various product combinations

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0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Orange juice & chicken pieces

Milk & bread Tea & bread Cereal & washing powder/liquid

Source: nVision Fieldwork, March 2009

Number of different kinds of products in the home

0%

5%

10%

15%

20%

25%

30%

35%

0 1 2 3 4 5 6 7 8 9 10 11+

Breakfast cereals

Shampoos

Household cleaningproducts

Source: Complicated Lives /The Future Foundation, 2000

Base: All aged 18+

Number of television channels available 1990 - 2004

0

100

200

300

400

500

600

700

800

900

1000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Sky

multichannel

package

CH 5 Digital TV

Source: nVision, UK

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5000

10000

15000

20000

25000

30000

35000

40000

45000

1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Sainsbury's (average lines per store)

Tesco (total lines across all stores)

Products available at multiple stores Number of products at two top multiple retailers

Source: nVision, UK

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)


So 87,000 divided by 5 days a week divided by 52 weeks a year is 334 years!








o With branding

o With motivations

o With products


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“When making an important purchase decision (like a holiday, computer, car or mobile phone) these days there is too much information to go through” % who agree or agree strongly by gender, age, social grade

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Source: nVision Research

Base: 1,000 face-to-face respondents aged 16+, GB

“When looking to buy the following products or services, in which of these cases have you used price comparison websites as part of your decision making process?” % who use them to buy the following products or services

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Base: 2,207 online respondents aged 16+, GB, 2011

“I often share tips on how to cut costs and save money ” % who agree or agree strongly by gender, age and social grade

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0%

10%

20%

30%

40%

50%

60%

70%

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90%

100%

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AB

C1

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Agree Strongly agree


Base: 1,000 online respondents aged 16+, 2010, GB

“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

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0% 10% 20% 30% 40% 50% 60%

A film

A restaurant

A book

A holiday location

A hotel

A band

A travel website

A theatre performance

A comedy show

A music venue

A musical

A spa location

A travel agent

Source: lastminute.com/The Future Foundation/nVision

Base: 1,000 respondents aged 16-65, GB, 2010

Influential sources when choosing particular leisure activities “Thinking of the time you last did each activity, which of the following sources, if any, were influential in your choice?”

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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

Through social networking discussions

A sales person / shop assistant

Coverage in a blog

Other

None of these

Travel destination

Restaurant for a special occasion

Live event

Source: lastminute.com/The Future Foundation/nVision

Base: 900-950 aged 16-65 who do each activity, GB, 2010

“A well-known brand is the best assurance of quality there is” % who agree or agree strongly, by gender, age and social grade

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0%

10%

20%

30%

40%

50%

60%

70%

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90%

100%

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-34

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AB

C1

C2

DE

Agree strongly Agree

Source: Friends Life/The Future Foundation/nVision

Base: 1,000 online respondents aged 16+, GB, 2011

“I regularly review my financial services products to ensure I’m getting the best possible deal” % who agree or agree strongly, by gender, age and social grade

22

Source: Friends Life/The Future Foundation/nVision Research

Base: 1,000-2,000 online respondents aged 16+, GB

It is so hard to make perfect choices “When buying a holiday, computer, car or mobile phone these days there is too much information to go through.”

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0%

20%

40%

60%

80%

100%

Male Female

1999 2007 2010



Compared prices online forecast % of adults who have compared prices online in the last 6 months

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0%

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30%

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80%

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100%2003

2004

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2011

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Price comparison forecast

Price comparison - actual

Internet users (those using it at least once a week) - forecast

Source: nVision Research Base: 1,200 respondents aged 15+, GB








o With branding

o With motivations

o With products


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Expectation of choice and the need for instant gratification

• 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

Mobile phone penetration by age Proportion of adults who own a mobile phone - nVision forecast

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

16-24 actual 25-34 actual35-44 actual 45-54 actual55-64 actual 65+ actual16-24 25-3435-44 45-5455-64 65+

Source: „Changing Lives‟, nVision Base: 1000 adults 16+, UK

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”

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10%

20%

30%

40%

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60%

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80%

90%

All 16-24 25-34 35-44 45-54 55-64 65+

Jul-00 Jul-03 Jul-05

Source: „Changing Lives‟, nVision

Base: 1000 adults 16+, UK

People participating in social networking websites “Which of the following, if any, have you done on the internet in the last 6

months…? Created / updated a personal profile on a social networking site

(e.g. facebook / myspace / bebo)”

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AB

C1

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Spring 2008 Autumn 2008 Autumn 2009 Summer 2010



Digital / Multichannel TV progress % of TV households

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90%

100%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Total multichannel

Total digital

Satellite

DTT-only

Cable

Source: Ofcom Digital TV Update/nVision

Base: UK








o With branding

o With motivations

o With products


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Faced with too much choice What strategies do consumers adopt?

Depends on interest in category

Brands as choice

managers

Relax search criteria

Independent advisors

Profit-making Not for profit

PriceValues/ ethical

concerns

Source: 'Citizen Brands', Michael Willmott/Future Foundation 2001

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

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

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?

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0%

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Agree Agree strongly

“I often can't be bothered to make a decision, I'd rather other people made it for me”

Source: nVision Research Base: 1,200 respondents aged 15+, GB, 2008








o With branding

o With motivations

o With products


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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.

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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 impact

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o With branding

o With motivations

o With products


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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 it

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Choice through motivations

The motivations

Ideology

Beliefs

Capability

Specifics

Environment

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Five motivations in more details

The motivation The descriptions

Ideology

This charity shares my view of the world and how it works or should work – my ideology

Beliefs

This charity share my beliefs about a right or wrong in the world and how to solve it

Capability

This charity has shown they have the capability to do the good that I want done

Specifics

This act is a specific, achievable good thing that I can do

Environment

This act benefits me, my life or my immediate world

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The motivation

Ideology

Beliefs

Capability

Specifics

Environment

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More on

volunteering and

reactive support

More about the

cause and the

issue

Greater

loyalty

More about

the donor &

their concerns


The motivation The examples

Ideology

Political parties, Greenpeace

Beliefs

Amnesty International

Capability

Red Cross

Specifics

Plan UK Child sponsorship, Smile Train

Environment

Comic Relief, Local charities

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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 most

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The explosion in consumer choice

Education

Transcript of The explosion in consumer choice