[Video] The Tipping Point: Why Customers Churn in Consumer Finance, Streaming, & Software – This Consumer Life Ep. 2

Mar 18, 2024


Male, 18-29: "I'm thinking of switching to Capital One, I'm using Green Dot right now, and it's only an online banking service, and Capital One actually has a location that I can go to. So I think that's, Capital One is what I'm switching to, and that's really my reason why is that they're local and they have a location."

Catrin: Hi, welcome back to This Consumer Life, Brox.ai's bite-sized podcast bringing you consumer insights straight from the horse's mouth using Brox.ai's exclusive and weekly updated database of video interviews. I'm Catrin, Head of Research at Brox, and today I'll be walking through tipping points. That is, what causes churn in three different industries. We'll be deep diving into consumer finance, streaming, and tech, and looking at exactly what push factors and pull factors are causing churn.

Consumer Finance Insights

Female, 30-44: "The only reason I'm thinking of changing banks is Wells Fargo likes to charge me money for keeping my money in the bank, and it's not like it's a whole lot that they're holding on to. Whereas why I would consider changing to Chase is they want to pay me money to transfer my account. I like that. That works well for me."

Gender Differences in Banking Churn

Catrin: Starting with consumer finance, we can see for this consumer that both push factors, that is negative experiences in the current situation, and pull factors, that is a perception of potential positive experience elsewhere, are working in combination to drive churn. So Wells Fargo's fees are pushing this consumer away, and Chase's incentive are pulling her towards them. When we break push and pull factors down, where there may be dissatisfaction in the current situation, there is a need for a potentially better offering in a different bank to pull people away, to actually drive that churn, and that behaviour of switching to another bank and taking the action to actually move. The significance of these pull factors becomes even more apparent when we look at exactly what they are. The top five factors in causing churn in consumer finance are all positive pull factors. So a perceived offering from another bank which is drawing people in. Whereas the four slightly less important factors are all push factors. So negative experiences which are driving people out of a bank. So the idea of a better experience somewhere else is more impactful than the actual negative experience in a current situation.

Female, 18-29: "So I've actually been thinking about switching from Huntington to PNC Bank. And that is just because where I work, they go through PNC Bank. And so I just feel that it would be a lot easier because there is an actual bank right inside of where I work. So basically just convenient, to be honest, you know, anytime I need something, I can do banking right where I work, which is super. The Huntington is not open on Saturdays where I live, so that's out of the question as well."

Catrin: Meanwhile, men are 25 percent more likely to switch banks because of push factors. While consumers on the whole are more likely to be drawn in by the idea or the promise of a better experience elsewhere, that is pull factors, it's much easier to actually push men away from their current bank by having a bad experience there.

Male, 30-44: "I'm currently thinking about switching to Navy Federal because I am no longer happy with the bank that I am at in Wells Fargo. They have just been charging me fee after fee every month, and I'm tired of it. So I'm thinking of going into the branch and just closing my account and heading down to Navy Federal Credit Union."

Catrin: In banking, which is obviously a low churn industry where consumers sometimes stick to one bank for their entire lives, a bad offering on its own is less likely to actually drive customers away, especially female customers.

Streaming Services Churn

Catrin: Let's turn to a higher churn industry, streaming. Last week we spoke about pain points in streaming and the difference between what makes people complain and what actually makes them take action and cancel a service. When we break our push factors and our pull factors down, we can see that in this case, push factors are much more important across all demographics.

Let's dig into exactly why people are cancelling their streaming services. Cost is a huge factor, and content is also an influential push factor in driving people away from a service. And a few people also care about ideological or political stances of streaming services. Quantitatively, we can see that cost and price are the biggest factor followed by content. Women care more about both cost and content so they are more likely to be pushed away from a streaming service for several reasons. When we look at age, we can see a general pattern where younger people are more concerned by content and older people are more concerned by price. It looks like different demographics are being driven away by different factors, but overall price and content are really major influences. With all these people being driven away from their current service It seems like there's an opportunity for other platforms to take advantage of this and entice customers with pull factors. So what pull factors might entice new customers?

What Drives Streaming Service Churn?

Male, 65+: "I have been kind of starting and stopping different streaming services, kind of just to check them out. I don't want to pay for all of them, everything costs. So I'll have one for a short period of time, then I'll let it go and I'll start another one. I'm thinking about dropping Paramount Plus and picking up Disney Plus. Just to see the content on Disney Plus, you know, if I like it, I'll stick with it. If not, I'll keep doing my routine as I've been doing."

Catrin: For a lot of consumers, cancelling a service and signing up for another one is ingrained in their television viewing routines. So it's a very normal thing to do to try a new service with the intention of cancelling it quite soon. And consumers are very open to trialling new services. So it's quite easy to entice consumers in by offering a free trial or a very discounted trial. But it's not so easy to keep them after that trial.

Female, 45-64: "I'm trying a five-month trial with Max, and I really like it. It's just, it's really expensive. I'm not planning on switching to nothing else. I'll probably keep my other streaming services but if it was a lower price, I might keep it."

Catrin: So what exactly could platforms do to make sure that consumers stay once they've tried the free trial? it looks like streaming services really need to perform across the board, bringing a variety of content, unique content that can't be seen anywhere else, affordable prices, of course bundling services, so consumers appreciate when they get more than just the service itself, and, of course, convenience. Catrin: And if a service isn't providing all of these things and hitting all of these marks, it doesn't take much for consumers to pack up and leave and look for another streaming service.

Software Churn Insights

Catrin: Our final sector for this week: software. 24 percent of consumers are considering leaving their current software provider, be that email, web browser, so on. Similar to banking, when people do consider switching their software provider, pull factors are obviously more important than push factors. when we break this down by demographics, we see that push factors are more important for women, and also as consumers get older, push factors become more important and pull factors become less important. So what are these push and pull factors? Ease of use and familiarity are far and away the most important factor in considering an email provider or a web browser or any kind of software provider. So no wonder churn is low in this industry. People want to stick with what they know.

Push and Pull Factors in Software

Female, 65+: "In my opinion, what makes a web browser good is its ease to the user. Now, for a lot of us that are not that tech-savvy, that didn't grow up with computers, the ease of access is probably the most important. My web browser would have to have the toolbar, status bar, scroll bar to make things easier for me. Google probably has one of the best."

Catrin: We also see that consumers want a brand that they can trust and they really don't want a slow and laggy service. When it comes to software, time is money. Consumers aren't prepared to spend their time learning something new and getting used to a new system, so they don't want to change. But, if they feel that their current situation is laggy and slow and they're waiting for their computer to buffer all day, they might actually be driven to consider switching, and that pain point turns into a push factor. With banking there's a keen sense of wanting your money to be safe and to work for you, and simply not wanting to be ripped off. Whereas in software, churn, or a lack of churn, comes from valuing your own time. Catrin: Consumers aren't prepared to put in the work of switching. But the frustration of waiting for slow programs to run and seeing endless buffering causes a more emotive response which is more likely to lead to action than wanting your money to be safe. Our time is precious and non-negotiable and switching brands takes time. So there needs to be a massively superior offering to entice customers away to give that precious time away. Pushing and pulling are not comfortable and we'd obviously much rather stay where we are. With software, we use our programs on a daily basis, and we're very much in our comfort zone. So these push factors and pull factors are really forcing us out of that comfort zone,and it's something that we don't want to have to face. When it comes to streaming, on the other hand, we're more than happy to switch services, sometimes even on a weekly basis. And switching is actually ingrained in some consumers' routines. It's their intention to leave before they've even joined. So the challenge here is not to pull people away or to avoid pushing people away, but it's how to retain people and how to build loyalty.

Make sure to sign up for our weekly updates by clicking the link in the description, or going to brox.ai forward slash data dash stories. Join us again next week, where we'll be diving into a new topic and a new set of sectors and hearing lots more from our brox.ai panelists.

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