Research round-up: 21st June 2010

Experian predicts World Cup finalists: How Marketers can score

With the FIFA World Cup 2010 now well underway, Experian has used its economists to predict who is most likely to win the World Cup and explore how marketers and brands in the UK may have to adapt to the potential prospect of an all-South American final.

Experian’s economists have simulated the World Cup tournament match by match, by creating a statistical model incorporating a number of factors including FIFA rankings, home country and home continent effects, and controlling for football confederation effects in the FIFA rankings, to calculate the probability of a win in each match in the draw.

The company simulated the tournament 10,000 times to produce the most likely outcomes.   

Based on this model, England will progress to the semi finals to be knocked out by eventual winning finalists Brazil. Brazil will wind up World Cup winners beating Argentina to lift the trophy for the sixth time.

The prospect of an all South American final does have some implications for those brands and marketers sponsoring the World Cup or piggy-backing on it, playing into the hands of the big brands to the detriment of domestic brands.

Jim Hodgkins, Director of Experian Marketing Services comments: “While the prospect of two of the world’s biggest footballing nations and rivals going head to head in the World Cup final is mouth watering, this scenario does play to the large global sponsors. Brands like Coca Cola, MacDonald’s and Nike and some cool local brands looking to make inroads in overseas markets, like Brahama, a new Brazilian beer recently launched in the UK or Haviana flip flops all stand to benefit.

“If England make it to the last eight we will certainly see the spirit of ’66 invoked with highly patriotic campaigns and these UK brands need to be making the most of their involvement now maximising use of digital channels for faster and more responsive campaign deployment and better targeting.”

Should the worst happen with England’s World Cup campaign, marketers need to think carefully about how they continue to make the most of the opportunities around the tournament, without alienating England fans.

Details of the probabilities of the results, as predicted by the model, from the semi-finals are as follows:  

Jim Hodgkins comments: “Even though this scenario suggests England may not win the World Cup, there’s much to celebrate along the way. Getting as far as the semi-finals also suggests that positive impacts on the UK economy from the tournament will be close to maximized – with the knock on impact that a good World Cup run will have on sales of TVs and food and drink in particular.”

www.hotwirepr.com

Mobile Apps Revenues to Exceed $30 billion by 2015

A new report published today by Juniper Research forecasts that, the combined revenues from apps funded by pay-per-download (PPD), value-added services (VAS, including freemium and subscription) and advertising is expected to rise from just under $10 billion in 2009 to $32 billion in 2015.
But while Apple’s App Store  has achieved app downloads on an unprecedented scale – 4 billion by April 2010 – the report cautions brands and developers against ignoring users of other platforms/handsets. According to Juniper, such a move could be counterproductive, particularly in developing markets, where the user base of iPhones (and indeed smartphones per se) is extremely low.
“If the mobile industry wishes to introduce a model based on applications, then it must ensure that those applications are accessible by a wide range of handsets ranging from smartphones to mass market devices,” said report author, Dr Windsor Holden.
Furthermore, uplift in download volumes does not necessarily equate to an uplift in industry revenues. The majority of application downloads from the App Store are free; other storefronts launched in the wake of the App Store also report that comparatively small proportions of apps (typically 5-15%) are paid for. Thus, building a business model aimed at both maximizing consumer adoption of applications and at maximizing content revenues can be extremely problematic.
The mobile app stores report finds that an app store-centric model presents a number of challenges, including:
•    The Need for Scale
•    Monetising the Mass Market
•    App Store Overload
•    The Content Legacy
A detailed table, ‘Selected Key Challenges of An App Store-Centric Ecosystem’ expanding on each of the above is provided in the whitepaper 'A World of Apps', available to download from the new Juniper Research website today.  To explore new functionality and features of the new site and to register for free whitepapers and blogs, please go to www.juniperresearch.com.

Further details of the study ‘Mobile App Stores: Business Models, Strategies & Market Segmentation 2010-2015’ can be freely downloaded from the new Juniper website. 

Mobile Revolution, What Mobile Revolution?

Figures published by Intellitracker, a specialist in website and online marketing optimisation, show that although there is a significant increase in the proportion of visitors using mobile devices to access the Internet, this is almost entirely due to the success of the iPhone.  The figures for UK website access speak for themselves:

    Over the last 12 months the proportion of website visitors using mobile devices has risen from 1.5% to 3.6%.

         In the same period iPhone use has increased by almost 8 times whilst its nearest rival, the Blackberry, has only doubled.

         At the end of April 2010 the iPhone was used by 7 times more people than any other mobile device.

The figures show a dip in the number of mobile visitors during both the Christmas and Easter holidays. Interestingly however, the number of non mobile visitors reduced much more than the number of visitors using mobile devices, meaning that the proportion of mobile users increased during these periods.

After Christmas, when both Orange and Vodafone gained access to the iPhone, the rate of growth of iPhone use increased significantly. So far, this increased rate of growth shows no sign of slowing. 

www.intellitracker.com

Poor customer experiences trigger switching epidemic

 A new study from Satmetrix, released today, shows that companies are wasting billions on attracting new customers through advertising whilst delivering a poor customer experience that has forced over 10 million* consumers to switch suppliers  in the last six months alone. The main culprits for this switching epidemic are unfair fees or charges, poor product or service quality and rude or disinterested employees.  

This research, created by Satmetrix, the Net Promoter Company and leader in customer experience programmes, as part of its annual Net Promoter Benchmark study, shows that much of the £14 billion spent on advertising each year in the UK would be better spent on delivering a higher quality customer experience. In fact, only 2% of respondents trust advertising the most as a source of information when choosing a product or service. 

Instead, almost half of consumers (49%) see personal recommendations from friends, family or colleagues as the most trustworthy source of information. And, over seven times as many people (15%) trust consumer opinions posted online than trust advertising. 

It is somewhat ironic that while politicians argued, during the recent election campaign, to cut waste, billions of public and private funds are being spent on the information source trusted the least by consumers – advertising. 

Treat us fairly and treat us right or we’ll spend our hard-earned cash with a competitor

Famous for their sense of fair play, the British don’t like it when they are not treated fairly. As a result, almost a quarter of respondents (23%) saw unfair fees or charges at the reason for switching.  An additional 7% switched because discounts were offered to new customers but not to them. 

Deborah Eastman, CMO at Satmetrix, says: “Business choices that seem to make sense from a financial point can negatively impact revenue and reputation if consumers don’t think they’re fair. If companies drop these bad profits, they will likely recoup lost revenue many times over by keeping their customers for longer and acquiring new ones through recommendations.” 

The second most common reason for switching (22%) is poor product or service quality. Almost as many (19%) people leave because of rude or disinterested employees. And, 12% move because they can’t get anyone to deal with their problem. 

Deborah Eastman says: “It seems that many organisations chose to invest in attracting new customers through advertising rather than invest in a good customer experience that creates loyalty. If companies listened more to their customers, and if employees could understand the impact of their behaviour by seeing customer feedback for themselves, then businesses could significantly reduce churn.” 

The hidden cost of negative word of mouth

This report is a clear signal from UK consumers -‘Focus on me and the experience I receive or I’m off.’ But the results show that the cost to a company doesn’t stop with a lost customer, While 2% might trust what they read in an advert, almost two thirds of consumers (64%) look to other consumers to guide their purchase decisions, As a result, the survey shows that a negative experience will lead to a negative recommendation and with it the loss of a new customer. 

Eastman continues: “This survey shows that we live in the Recommendation Generation and that the key to what gets recommended is the experience a customer receives. The companies that understand this and have invested in customer experience programmes are already leaving their competitors in their wake by creating loyal advocates.” 

Satmetrix will be announcing the brands in seven sectors that deliver a customer experience that drives loyalty in its annual European Net Promoter Benchmark Report. To be announced at the Net Promoter Conference in London on the 17th of June, the sectors include:  banks, ISPs, mobile phone service providers, computer hardware, mobile handsets, car insurance and TV manufacturers.

The resultsThe results of the Satmetrix survey are based on a robust sample of over 5100 consumers in the UK.  

When asked if they had stopped doing business with a company within the last six months due to a bad customer experience, 24% said yes – representing over 10 million adults in the UK. 

When asked to identify the primary reason for leaving, respondents said:

23%     Unfair fees or charges

22%     Poor product or service quality

19%     Rude or disinterested employees

12%     Couldn't get hold of anyone to deal with my problem

7%      Discounts for new customers but not for existing customers

4%      Inadequate return or refund policy

5%      Out of territory call centres

1%      Inadequate environmental policy

7%      Other 

When asked which sources of information they trust the most when choosing products or services, respondents replied:

49%     Recommendations from friends, family, or colleagues

22%     Product test reviews

15%     Consumer opinions posted online

6%      Media articles (magazine, newspaper, television)

2%      Advertising

2%      Direct mail

4%      Other

* Based on the latest figures from the Office of National Statistics those estimate that there are over 44 million adults in the UK.

 Source:  www.satmetrix.com,

UK businesses failing on delivery times

Major suppliers are being forced to buck up their ideas and change their attitudes to customer service. As supermarkets such as Ocado offer their customers one-hour delivery slots, Brits are asking ‘why are we waiting’ when it comes to other service providers. That’s according to Trimble, an expert in telematics, which predicts that by 2011, a majority of major suppliers and services will be competing to offer the narrowest delivery slot.

Recent research showed that the average Brit spends 366 hours – or 15 days- in a lifetime, waiting for deliveries or tradesmen.Trimble technology allows businesses to schedule narrow appointment windows using the fewest vehicles, the lowest mileage and the least CO2.

www.trimble.com

Brits plan a TV summer as LED TV searches leap 371%  

LED TVs are this year’s high tech must-have, reports Twenga, the next-generation shopping search engine, with searches up 371% in a month. 3D features however are not yet a deal-breaker, with 3D vision in 12th place among search criteria. The top 10 LED TV search criteria on www.twenga.co.uk show diverse factors driving consumer choice.

Brands are crucial, with Panasonic in 1st place, and Samsung and Toshiba in the top 10.

Screen size is also significant, but the biggest screens are not in the top 10. Favourite dimensions are 42 inch (2nd place), 26 inch (5th place) and 32 inch (7th place).  The colour of the casing is decisive, with white LCD TVs in 4th place and silver LCD TVs 8th. On www.twenga.co.uk, users can compare 993 products from 158 shops, and get simple, straight-forward advice with Twenga’s buying guide: Upgrade your home with high-tech!

Visits as at June 7th 2010.

 www.twenga.co.uk/

UK universities deliver £2.97 billion in services to business and industry

At the start of Universities Week, results released today from the annual Higher Education – Business and Community Interaction (HE-BCI) survey show an increase of 5.5 per cent in the higher education sector’s income from services it has provided to UK businesses and wider society: rising to nearly £3 billion in 2009.

The HE-BCI survey findings show that even in the economically unstable period we are experiencing, universities and other higher education institutions (HEIs) are increasingly successful at using their knowledge, expertise and facilities to contribute to the UK economy through research, professional training, consultancy and services, spin-off companies and new enterprises, and to generate income to support their core activities.

Key findings from the HE-BCI survey:

New enterprises by HEI staff increased by 29 per cent and graduate enterprises rose by 4 per cent. Many of the start-ups are demonstrating longevity: the number of graduate enterprises surviving three years or more is up by 26 per cent. Turnover and staffing for these graduate start-ups rose by 16 per cent and 27 per cent respectively, showing them to have a positive impact on the national economy and jobs.

Continuing professional development (CPD) income rose by 4 per cent to £559 million, including a 15 per cent rise in income coming from individuals in continuing education (CE), to £175 million. This is due to not only business-related learning but also retraining for those who are out of work due to the recession. In total, learners clocked up four million days of CPD and CE – up by 21 per cent from the previous year. However, CPD income from commercial business (SMEs and large businesses) fell (by 9 per cent and 14 per cent respectively), – most likely due to the difficult economic climate.

Public sector and third sector spending on HEIs rose, mainly through collaborative research income, which increased by approximately 5 per cent to £730 million, and contract research income which rose by 12 per cent to £937 million.

Income from intellectual property and sale of spin-off companies almost doubled (£124 million, up from £66 million). Much of this (42 per cent) can be attributed to one high-profile sale of Surrey Satellite Technology; but even without this there was a 9 per cent increase (equating to £73 million): this suggests that intellectual property portfolios are a major success story for HEIs. These successful spin-off companies demonstrated a clear trend of long-term survival as well as benefits to employment and the wider economy: the number of companies that remained active for three years or more was up by 12 per cent in the year to 982 businesses.

David Willetts, Minister of State for Universities and Science, said: "The UK’s universities are not only world-leading educational establishments, but vital contributors to our nation’s prosperity. Initiatives such as Universities Week spread awareness of the positive role universities play in all our lives. I am delighted to have the opportunity to engage the population in the success of our higher education institutions.

"The HE-BCI survey shows that even in difficult times, universities and other HEIs are increasingly successful at using their knowledge, expertise and facilities to contribute to the UK economy. In these difficult economic times we face, the whole nation stands to benefit."

www.universitiesweek.org.uk

Virgin Boss beats Obama and Mandela as most admired communicator in survey of owner-managers for business support campaign

Business trends may come and go but Britain’s entrepreneurs still regard an old favourite as the embodiment of the communicator who makes things happen and inspires business growth.

When owner-managers at 200 of the UK small firms were asked in a survey to name their most admired communicator, Virgin boss Richard Branson was easily named the Number 1, beating off the challenge of US President Barack Obama, and even charismatic former South African leader, Nelson Mandela.

The research was commissioned by Siemens Enterprise Communications as part of a business support initiative started by the company in May called The British Business Boost.  The initiative offers a business growth and consultancy package worth £50,000 in an online competition at www.britishbusinessboost.com.

Tristram Mayhew of adventure firm GoApe!, Julie Meyer of Ariadne Capital, and Gerard Burke of growth firm Your Business Your Future – some of the UK leading entrepreneurs – comprise the competition judging panel and in July, will be selecting the winners of the £50,000 growth package.

In the survey polling:

·          Richard Branson was chosen as top communicator by 43 per cent of interviewees, followed by Barack Obama with only 18 per cent, with Nelson Mandela trailing a distant third with 10 per cent.

·          Actress and Gurkhas’ rights campaigner Joanna Lumley polled nine per cent, narrowly beating Marks & Spencer chairman Stuart Rose and Dragon’s Den star and entrepreneur Duncan Bannatyne who both gained only eight per cent.  

·          Life on Mars hard man detective Gene Hunt received three per cent of the vote, but perhaps surprisingly, this was still more than The Apprentice star and businesswoman Karren Brady, who claimed only two per cent of owner-managers’ votes.

Leon Mangan, channel sales director of Siemens Enterprise Communications, said: “UK entrepreneurs clearly admire someone like Richard Branson who has been there and done it.

“Running a small firm can be a lonely job sometimes and owner-managers are always looking round for inspiration and practical ideas to support their efforts.  We’re quite relieved as well that Gene Hunt didn’t poll any higher in the survey.”

www.britishbusinessboost.com

UK travel destinations soar in popularity

It is UK holiday destinations that have benefited the most from the recent travel uncertainty caused by the ash cloud and ongoing strikes. According to figures released by leading online accommodation booking website Hotels.com, searches for locations in the UK have increased dramatically by up to 73%*.

The figures show searches for UK destinations such as Bath up 73% year on year. Also hugely popular were Glasgow up 52% and Edinburgh up 42%. Whilst a little further afield, searches for Guernsey were up 37% year on year.

Alison Couper, Global Communications Director for Hotels.com comments, “These statistics show that the recent disruption faced by travellers has sparked resurgence in interest for trusty UK breaks. The UK is a haven for tourists with so many sights to see and places to visit, and with a warm and sunny summer forecasted now is a great time to explore all the UK has to offer.”

The UK offers an abundance of different destinations depending on your holidaying tastes including Scarborough (up 28%), Bristol (up 25%) and the Lake District (up 24%).

Brighton and Bournemouth beaches are also likely to experience more visitors this summer, as searches for both destinations have increased by up to 28%. 

www.hotels.com

Britons want to know where their money goes

Over half of UK consumers say they would give more to charity if they knew exactly where their money was being spent. Over 2000 UK consumers were polled in this research commissioned by See The Difference and conducted by Vision Critical. Data was collected in December 2009.
The top five things that would make people give more to Charity were:
1. Knowing exactly where my money has gone (51%)
2. Actually seeing the difference my money has made (40%)
3. Feeling like I’m helping real people and not just a brand / organisation (37%)
4. Knowing that the charity won’t use the money to cover admin costs (30%)
5. Being told who benefited (29%)
The poll was conducted by new not-for-profit video site See The Difference contains a diverse range of video projects from UK charities working at home and abroad.

Visitors to the site can choose a charity project that means something to them, know exactly where their money is going and for the first time, then See The Difference they make through feedback that each charity has pledged to provide on every project.

Mobile Payment Transactions to Double in Value to $200bn by 2012

A new study by Juniper Research forecasts that the value of digital and physical goods that people buy with their mobiles will reach $200bn globally by 2012, compared to just less than $100bn this year. Digital goods include entertainment and tickets, whilst physical goods include groceries, gifts and books.

The new study on Mobile Payments for Digital and Physical Goods found that the availability of secure, easy-to-use, payment applications and the growing realisation of users that they can make ecommerce purchases by mobile will drive the market.

Report author Howard Wilcox gave more details: “Our research showed that the purchase experience has been enhanced by improved mobile commerce transaction processes due to faster mobile networks, more powerful devices and much more user friendly Smartphone apps. Amazon Payments for example has recently introduced payment-processing tools for mobile devices, enabling Smartphone users to buy with one click.”

However, the Juniper report also underlined that retailers and merchants need to communicate the cost of transactions clearly so that people are not discouraged from buying by mobile.

Further key findings from the mobile payments report include:

•The frequency of physical goods purchased will be higher than average in developed regions such as North America and Western Europe;

• Brands, retailers and merchants have a significant opportunity to increase their revenues through highly targeted marketing campaigns, using apps and mobile web payments as a convenience play for users.

The report adopts an innovative new quadrant approach to compare the positioning of mobile payments vendors. The forecasts provide detailed five year regional data for mobile payments for digital & physical goods, showing key parameters including subscriber take-up, transaction sizes and volumes. The study also reveals the strategies that are being used to enable users to pay by mobile through case studies from companies such as 1-800Flowers.com  and Zong.

www.juniperresearch.com

The smart brogue goes casual, as online searches jump 489%

A five-fold increase in searches for the traditional brogue confirms its status as the re-invented casual must have this year, reveals Twenga (http://twenga.co.uk), the new generation search engine. Searches for brogues are up 489% compared to last month. The top searched brands are the High Street favourites, such as Paul Smith, Grenson, Timberland and Doc Martens, underlining the shoe’s new trendy status.

Twenga’s study of top shoe searches on www.twenga.co.uk also shows that searches for Wellington Boots are up 91% in a month, perhaps confirming that wellies are the chic festival season essential, or maybe just that Brits fear the worst for the English summer.

Visits as at June 14th 2010, compared with a month before.

www.twenga.co.uk/

Overseas aid tops the public's chops
Poll of over 24,000 reveals what public wants to cut and keep in the budget

The public strongly disagrees with the Prime Minister's decision to ring-fence overseas aid from any spending cuts. In a massive poll on Consumer Revenge website MoneySavingExpert.com, almost half voted it as their top chop. However, they agree with his decision to protect health; it came top in the poll of what to protect. The site polled over 24,000 in two surveys: the first asked what people would like to cut, the second want they wanted to protect.

Martin Lewis, creator of MoneySavingExpert.com, says:  "It seems that a huge chunk of the UK public follow the 'charity begins at home' philosophy when it comes to public spending. This perhaps signifies a division between the political classes and the person at home. It's stunning that the area of spending the government has chosen to make watertight is the one most people would choose to cut.""The areas of biggest division though seem to be defence and social protection, which both.

www.moneysavingexpert.com