Thoughts on technology, investing, marketing, and entrepreneurship.

The Perils of Consumer Inertia

I want to watch my favorite NFL team, the Pittsburgh Steelers, every week. It’s really that simple. Not living in Western Pennsylvania anymore, the only way to guarantee this is to have DirecTV as my service provider.

Currently, I have Comcast digital cable. The service isn’t very good, just like all the other cable companies. So, Comcast has succeeded in training me to be used to it. The DVR works well, but not as good as Tivo. There’s a decent selection of HD channels, though not as many as satellite. They do just enough to keep me as a customer – barely.

My broadband internet is bundled in the overall package though and this is where cable shines. The bandwidth from cable is much faster and more consistent than my experiences with DSL.

So while I really want to buy the NFL Sunday Ticket to watch the Steelers and also receive more HD channels, I just don’t have enough incentive to make the move. There’s just too much hassle and risk involved. Despite the incentives provided by DirecTV to make the switch, the transaction costs as well as the perceived risk are just too high.

Where am I going with this? It’s not to tell you about my TV watching habits. I’m trying to illustrate the difficulties many products have to overcome customer inertia.

If we think back to physics, the principle of inertia is an object at rest will remain at rest unless acted on by a net external force. While Newton was likely speaking of business customers, I think we can use the reference here.

This concept can be applied to consumers across many different types of products and services. Companies need to overcome their consumer’s inertia in order to spur a them to actually make a move to their competing service or even an upgrade.

In the case of television service, the benefit to the consumer is having a clear picture delivered on as many channels as the customer desires. Satellite providers have to provide a much more compelling reason to make them switch. HD channels, special sports packages, and more digital channels are all nice features, but they still meet the same basic needs that cable provides. The satellite companies apparently realize this and also focus on price in their current campaigns. Unfortunately, they are only lower priced on the most basic of packages. Once you start comparing similar packages with cable, the pricing is virtually identical.

It’s not enough to make generic claims and dangle a few more features in front of the potential customer. It’s important to realize all the perceived risks involved with customers purchasing your product or service. Customer value occurs when the perceived benefits outweigh the risks. Even if these risks are only psychological in nature.

So when planning your marketing activities, be sure to fully examine these often overlooked factors. What aspects of switching to your service does the customer most worry about? Are we really providing value here to the customer? Are we making a good case for our product to overcome this customer inertia?

In my case, I’m still on the fence with cable. It works. The service does its job in a serviceable fashion. I’m missing some football games, but there’s still just too much hassle and risk associated with switching for me. Has DirecTV been doing a good enough job with its marketing efforts or am I just an edge case?

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  1. Well, I have to say I agree with you that cable is a major pain. I actually have a lot of problems with outages where I live and what’s worse is that Comcast has a monopoly over the complex so even if I wanted to switch I couldn’t.

    (On a completely unrelated side note… being that my parents live in the Pitt area, I think I’m required to tell you that not being able to watch the Steelers play is definitely reason to switch to DirecTV. No questions asked!)

    It’s been several years (at least 6) since I tried Satellite in the Blacksburg area and I really didn’t like it. The service went out every time the weather got bad and you couldn’t even get the local news stations. (They said that they were going to be made available soon, so I’m assuming that probably happened.) They have simply done a terrible job marketing to me. The only experience I have with satellite is a negative one and in six years they have done nothing to even attempt to alter that view.

    These satellite providers have a lot to offer and they could definitely compete with the monopoly that is Comcast/Adelphia…I just wish they would let me know a little more about themselves so that I could make an educated decision about them. I’m your average super busy student and I just don’t have to go out and find the information myself, they would have to come to me…