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Trend Watch: Addressing Loyalty and Audience Fragmentation

Thanks to CMO Magazine's Analyst View, we have insight into the JupiterResearch Q1 report on Key Trends in the Internet and Emerging Consumer Technologies by David Schatsky, Senior Vice President JupiterResearch.  I realize the report was issued in Jan.  and in the fast paced digital world, it could be considered old news.  But what compelled me to bring it up again is the fact that Jupiter hit on what we believe is going to be a very important area for marketers to focus on as peer-to-peer commentary continues to evolve: erosion of loyalty and audience fragmentation. Key_trends_jupiterresearch_3  

Jupiter reveals that in 2005, key trends will include broadband reaching critical mass; continued convergence of technology and entertainment inside and outside the home; as well as erosion of loyalty and audience fragmentation. Wise investments and savvy strategies will be necessary to seize new opportunities.

And thanks to CMO Magazine again, we know what Jupiter describes as erosion and fragmentation:

Audience Fragmentation and Channel Complementarity
Audiences are fragmenting and channels are proliferating. The number of channels for reaching consumers has begun to jump dramatically, fueled by the growing popularity of a few enabling technologies such as rich site summary (RSS), peer-to-peer, satellite radio, and voice over Internet protocol. In particular, RSS will have a dramatic effect on the channels through which consumers experience news and media, as RSS fuels both blogs and next-generation news aggregation services. Marketers must embrace cross-channel synergistic strategies. However, they must do so now, with an eye on the rapidly expanding universe of options available to consumers. The cross-channel mandate became both increasingly important and increasingly challenging in 2004; this challenge will not abate in 2005.

Erosion of Loyalty
Loyalty, or lack of it, is keeping businesses in all sectors awake at night. Companies with which JupiterResearch works-including publishers, search engines, broadband providers, retailers, wireless carriers, as well as travel suppliers and agencies-are confronting the challenge of restraining customer acquisition costs by retaining customers. For example, JupiterResearch data have shown loyalty to retailers is down; wireless, broadband, and cable providers commonly experience monthly churn rates of 1.5 percent to three percent or more; and online travel consumers, seeking the best deal, use an average of 2.5 sites and off-line agents in their research process. Companies are looking beyond conventional loyalty programs to find new ways to keep hard-won customers from wandering. Research in 2005 will look at strategies that can stem customer defection and win loyalty in the face of these trends.

As with any "trend"  once it's identified, everyone starts to take notice.  Most marketers (hopefully) realize the need to address this change and adapt accordingly.  What once seemed at least manageable to monitor, analyze and understand audiences (consumers) by traditional channels has changed dramatically.  Yet, even as this trend takes place (by the way, it's not a passing trend), leading edge marketers will embrace this opportunity to gather unaided market information and research directly from new channels to understand their ever changing audience.  Think opportunity...

Posted by Cymfony on April 27, 2005 at 10:11 AM | Email this post Permalink

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