If you want people to buy your stuff, make stuff they want to buy

by Steve Blum • ,

Churn.

The road to broadband nirvana has its ups and down. Adoption figures – the number of people who pay for regular broadband access – are on a general upward trend, despite a tremor in the latest Pew Research Center report. But the market is messy, and sometimes people who subscribe to in-home broadband service decide to drop it. Churn out, in industry jargon.

The Benton Foundation has crunched some existing survey numbers and concluded that the reasons people drop broadband subscriptions – become unadopters, as they put it – are mostly related to cost, with usefulness a distant second. According to their analysis…

In comparison with their “never-adopter” counterparts, un-adopters are significantly more likely to cite cost, the potential to use the Internet elsewhere, and the inadequacy of their computer as reasons for their discontinued use. In particular, our models show that households with incomes up to $40,000 are more likely to select “too expensive” as their reason for stopping service – suggesting that policies focusing on un-adopters may need to cater to more than very low-income households.

Translation: like every other commodity, demand for Internet access depends on price. But only 4% of U.S. households can be classified as former broadband subscribers, as opposed to 29% who have never bought it at all, as the Benton Foundation figures suggest. It’s a figure that’s in line with a service that’s not quite a necessity like electricity, but expendable in a particularly tight pinch, like phone or cable subscriptions.

Retirees, though, are likelier to cite “no need” as a reason for dropping home broadband. This is where the Benton Foundation’s analysis misses the boat completely. Its suggestion is to target them with “digital literacy/educational efforts that include strategies to assist those who do not feel Internet content and services are relevant to their lives”.

Reeducation camps designed to assist people with counter-revolutionary feelings enjoyed a brief resurgence after the fall of Saigon, but haven’t proven particularly effective since. How about creating services that are relevant? That’s the way to attract and, more to the point, keep customers.