Friday, March 16, 2012

The Evolution of DSCs – 2012 Carlisle Consumer Sentiment Survey

A lot has changed since 2010. The percentage of the survey population represented by “DSCs” (Digital Service Customers) rose substantially – from 32% to 55% in 2012. Now, the majority of your service customers are DSCs. This surpassed our expectation, not to mention that we thought shifts like this would spell doom & gloom.

But, it didn’t. In fact, what happened was the rate of switching among DSCs, as a result of internet research, declined. In 2010, 39% of DSCs switched service providers based on internet research. In 2012 this went down to 30%.

Given the rise in number of DSCs in the consumer population, overall switching as a result of internet research still went up, from 12.5% of the total consumer population to 16.5% (a 32% increase). However, to put this in perspective, if the rate of internet-related switching had not declined, then 21.5% of the total consumer population would be switching as a result of internet research (a 72% increase!).

What happened? Two things:

First, the increase in digital customers was fueled by customers who used fewer web resources. In 2010, we saw that DSCs were more likely to comprehensively research providers on the internet. In 2012, DSCs are more likely to use the internet to answer specific questions (e.g. “When do they open?” or “How do I get in touch with them?”). DSCs who used more resources in their research were more likely to switch - probably because they are actually comparing the merits of providers, rather than just researching provider details.

Second, usage of brand sites increased for DSCs. In both surveys, we found that brand site usage positively correlates to lower switching behavior, so this increased usage pushed down the rate of switching for DSCs.

Bottom Line: In a nutshell, better and fewer resources were needed for research, and more DSCs landed on the brand sites. This helps explain why the third parties, like RepairPal, have not gained any traction in the market. Their offerings are too complex as they try to fulfill every service customer need. Their mobile applications are fairly primitive, as well. The OEMs have seen that offering an Owner’s Center makes a lot of sense. They have developed better applications that are more tailored to what service customers really want. So, yes, switching has increased, but the OEMs seem to be on the right side of these digital strategies.

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