Thursday, November 10, 2005

TDG Research: "Social Prestige" iPod Buyers Most Fickle and Likely to Churn

TDG Research has issued new research that finds "while Apple's iPod continues to enjoy strong brand loyalty, consumers who purchased an iPod primarily to advance their social status among peers are more likely than other buyers to switch brands the next time they purchase an MP3 player."

According to the report, "almost one-third of consumers who cited improved social status (that is, "the device makes me look cool") as the primary reason for purchasing an iPod are to some degree likely to switch brands on their next MP3 purchase."

Michael Greeson at The Diffusion Group said, "It is widely recognized that early adopters embrace new technologies because of factors such as novelty and social status. They want to be the first to own the latest new gadget because it enhances their social standing among their peer group. On the other hand, mainstream consumers more often than not buy innovative technologies because of some perceived pragmatic benefit. For example, purchasing an iPod may enable them to record, transfer, and listen to music in a much easier and more enjoyable way than their Sony Walkman."

Greeson added that "If a "cooler" device comes along these same consumers will be the first to jump ship. The challenge for companies like Apple is to maintain "coolness" while becoming more mainstream - a difficult challenge given that "going mainstream" often means losing your uniqueness. When everybody owns an iPod, owning an iPod is no longer special or cool."

Who would have thunk it? Early adopters are fickle and not as brand loyal as mainstream consumers. I guess the simple lesson here is companies need to continually innovate and deliver better products and services to make churn a moot point...