Consumers shun longer contracts despite cost savings

mobile (2)Post-GDPR research reveals that consumers are demanding greater flexibility and control over what they are signing up to, with nearly three-quarters (73%) deciding to shun services that tie them into long-term contracts, even if the options that offer greater flexibility are more expensive.
Among subscription users alone, well over half (54%) say they they opt for monthly rolling contracts, despite the fact they are forced to pay more to do so.
Flexible subscriptions tend to appeal to those on higher incomes, parents and millennials, with 77% of parents and 83% of those with household incomes over £75,000 use at least one subscription service. Nearly three-fifths (59%) of millennials agree that subscription-based products or services offer value for money, compared to 35% overall.
The DMA’s Customer Engagement – Acquisition and the Consumer Mindset Report examines the relationship between members of the public and brands during moments where consumers question whether to try a new brand or stick with what they know.
According to the research, companies should continue to assess how more flexible buying options can help attract new customers, with long-term loyalty building being the ultimate goal. For example, 45% of subscription users agree they would like to pay for more products and services in this way rather than paying outright.
Most consumers believe price, quality and discounts are all key drivers to switch to a new brand. In the post-GDPR era, not only do consumers want more control, they actively seek the best value – the majority agree they would consider switching to use a new company if they offered cheaper prices (76%), better quality (76%) or a discount (72%).
DMA managing director Rachel Aldighieiri said: “These findings reinforce one of the DMA’s key principles – to put the customer first. Ultimately, it is the consumers’ choice over what services they use meaning that businesses must continue to earn their loyalty and trust by focusing on customer needs and putting them in control.
“Consumers want the best service possible at the best value and so organisations must be willing to demonstrate that they can offer this.”
Offering discounts, better prices and quality are clearly useful strategies to businesses when trying to attract new customers, and this becomes more apparent when compared with other survey findings. When making new purchases, just 24% say they consider retailers they haven’t used before.
DMA Customer Engagement Committee chair Scott Logie, who is also managing director of ReaD Group Insight, stated: “In the post-GDPR era, finding new ways to engage with potential customers is clearly a significant challenge. The fact that just 24% of respondents would consider a new provider when making a purchase means that businesses need to find new, creative ways to stand out from the competition.
“Clearly competitive prices, discounts and having a great product are still very important, but organisations must be willing to diversify their customer engagement strategy.”

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