Switching providers or sticking it out? Consumer trends since COVID19

May 17, 2021

With more people working from home since lockdown, expectations and attitudes relating to bill increases in utilities, telco and insurance have changed.  

A recent DBM Consultants study* shows that the COVID-19 pandemic has impacted and evolved consumer lifecycles, attitudes, expectations and behaviours across utilities (electricity, gas and water), telecommunications (mobile and internet) and insurance (home, motor and health).

As working from home increased, so did bills

The marked increase in working from home during 2020, likely to be maintained to some extent through 2021, has changed the way consumers interact with their service providers. Since the pandemic began, almost 1 in 2 consumers are working from home to some extent, and 16% do so more now than they did before.

It is no surprise that with more people working from home, consumers are likely to have seen an increase in their bills since lockdown, with the greatest impacts seen in utilities and home insurance.  Health insurance holders are also the most likely to have experienced (or perceived) a premium or bill increase in 2020.

 Telcos appear to have mostly kept their prices stable during the COVID crisis, and free data that was offered to customers may have helped ease perceptions of any price increases, where premiums and bills increased by 20%-40% in other service categories.  For utilities, these increases are most likely due to increased usage as people spent more of their time within the home.

Unsurprisingly, home internet has seen the biggest uptick in use as a result of COVID, with 58% of those who are working from home saying their home internet usage has increased.

Increased bills don’t necessarily mean increased switching

Even though bills and premiums have going up, it doesn’t mean consumers are leaving their current providers.

 On average, half of consumers have switched service providers, and this is more likely to be providers of mobile phone services, motor insurance, or electricity. Aside from price, factors inducing switching include overall value for money, product and service quality and reliability.

Those who are looking to switch right now are more likely than those who are always looking around to say they have been irritated by their provider (26%) and that their contract is almost up (27%).

More than half of consumers said if they were to shop around, it would be for a better deal, seeing what else is out there (33%), and keeping their current provider honest (24%). Perceived value for money is key for telco and insurance, while service stands out for utilities.

Consumers are careful to choose a brand they trust for insurance, which makes sense during a pandemic, particularly for health insurance and home insurance. Trust is less important for motor insurance which could indicate that consumers may consider a wide range of contenders for this category of insurance.

However, there remains inertia amongst consumers when it comes to changing providers. The majority of consumers say they did not consider switching even after receiving a higher-than-expected bill. It typically takes a bill 25-50% higher than usual to push consumers into action.

 The study showed that the vast majority of consumers have no intent to switch service providers in the near future, with the search for a better deal the main catalyst for those seeking out other providers. Home and motor insurance are most likely to be reviewed at renewal time, whilst health insurance is currently more likely to be reviewed at any time, likely driven by a lack of ‘renewal’ point in health insurance policies.

For those not considering a switch, switching is considered “too much effort”. Other consumers concerned about risk are not willing to go through potential service disruptions that may result from switching providers. Yet other segments in the study stated they were not willing to lose their current “good value legacy plan” or were “not irritated enough to switch.”

Factors that drive switching

For those who are looking to switch, a combination of push and pull drives change of provider:

  • a change of circumstance, such as moving home, a new phone or a new car
  • seeking out better deals or price
  • word of mouth from family and friends.

While price does indeed drive switching (and best price remains a lower-ranked driver of loyalty), it is ultimately the service, reliability and value for money that encourage loyalty to the current provider.

For more information about the Consumer Services Journey Lifecycle study, contact Adam Bottle, Director: abottle@dbmcons.com.au

*Consumer Services Journey Lifecycle December 2021, sample size 2,516.

Past Posts

April 4, 2023
Diversis-backed RFI Global acquires DBM’s Atlas division, to create Australia’s most comprehensive financial services customer data set.

Sydney 5th April 2023 – Embargoed until 00:01 AM AEST on […]

Read More
April 21, 2022
SMEs and emissions reductions

A recent study of DBM Connect panelists reveals SME attitudes towards emissions, how their business is responding to the emissions challenge, and their expectations of suppliers and business partners.

Read More
February 4, 2022
Q&A: Celebrating 30 years of DBM Consultants

This year marks 30 years of DBM Consultants.

Read More
December 3, 2021
Financial uncertainty amid the pandemic fuels a rise in Buy Now, Pay Later services in Australia

By Tony Williams, Executive Director, DBM Consultants & Lucas Carreras, […]

Read More
July 16, 2021
How to boost marketing ROI for financial services - FAST

DBM Managing Director Dhruba Gupta shares 2 fundamental things financial services marketers should know to boost marketing ROI.

Read More
May 17, 2021
Switching providers or sticking it out? Consumer trends since COVID19

With more people working from home since lockdown, expectations and attitudes relating to bill increases in utilities, telco and insurance have changed.

Read More
March 7, 2021
5 ways DBM is leading the charge for workplace gender equality

DBM Connect 2021 IWD Poll February-March 2021, sample size 1046.

Read More
February 21, 2021
When to DIY (your market research survey) and not

When to DIY (your Market research survey) or not

Read More
November 24, 2020
More transparency around member satisfaction of super funds required to empower consumer choice

While super funds will next year be held to a […]

Read More
September 28, 2020
DBM partners with Nielsen to launch DBM Atlas + Media Profiler

Unlocks deeper consumer profiling, specifically for the financial services sector […]

Read More
August 28, 2020
Download this DBM COVID-19 Insights Report

DBM tracks financial services usage and behaviour monthly (for both […]

Read More
August 18, 2020
DBM researchers reveal links between advocacy and the predictability of future customer behaviour

Dhruba Gupta, Founder and Managing Director of DBM presented the […]

Read More
June 24, 2020
Signs of Opportunism Amongst First Home Buyers

The latest DBM Atlas data has revealed that renters are […]

Read More
April 9, 2020
Business Owners Urged To Start Positioning Themselves For The Recovery

While the implications of COVID-19 have only become apparent to […]

Read More
March 9, 2020
Australia's banking customers to crown their 'Best Neobank'

In a first for the Australian market, a survey of […]

Read More
March 5, 2020
Excellence in Financial Services on show at DBM Australian Financial Awards 2020

5th March 2020 The 2020 DBM Australian Financial Awards were presented in […]

Read More
February 10, 2020
DBM and Eyeota create peerless Digital Audiences for Financial Services Marketers

Eyeota, the leading audience technology platform enabling the intelligent use […]

Read More
February 3, 2020
DBM appoints Kipling Zubevich as new CEO

DBM has today appointed Kipling Zubevich as CEO, tasked with […]

Read More
January 21, 2020
A new year. A new decade. A new look.

It’s 2020, and we’re celebrating with a brand new logo. […]

Read More
December 17, 2019
DBM wins Australia/New Zealand Consultancy of the Year award

DBM are thrilled to announce being honoured at the Campaign […]

Read More
October 21, 2019
Sick of spiralling into more debt with Afterpay? Why not try 'beforepay'

There's a new kid on the block targeting millennials living […]

Read More
October 4, 2019
We signed up to 4 Aussie neobanks. Here's what happened

For all the media coverage, chatter and Twitter emojis, do […]

Read More
August 13, 2019
Australian business confidence slides to record lows

The Winter 2019 DBM In Full Focus report – an […]

Read More
April 17, 2019
DBM Financial Wellbeing Index reveals caution among Australians

The financial confidence of both the general public and businesses […]

Read More
April 8, 2019
Australian businesses rapidly losing confidence

The latest DBM In Full Focus report - an insight […]

Read More
March 20, 2019
Neobanks vs the Big banks - how real is the threat?

It’s no secret that 2018 was a tumultuous year for […]

Read More
February 28, 2019
DBM Australian Financial Awards 2019

The 2019 DBM Australian Financial Awards were presented in Sydney […]

Read More
February 7, 2019
Financial Inequality Declining in Australia

Findings from ME Bank's 15th bi-annual Household Financial Comfort report (HFCR), […]

Read More
December 11, 2018
Looking Beyond the Banking Royal Commission

Trust in Australia’s big banks is at an all-time low […]

Read More
November 16, 2018
Top Three Tips From a Woman in Research

I can easily cite the statistics on women in the […]

Read More
November 7, 2018
Alarming number of Australians intend to switch their Private Health Insurance

New findings show an estimated 220,000 Australians intend to switch […]

Read More
September 3, 2018
AMP Customer Crisis Deepens

Increasing numbers of superannuation customers are expressing their dissatisfaction with […]

Read More
August 10, 2018
AMP Suffering Significant Reputational Damage

AMP’s Net Promoter Score (NPS*) has plummeted 10 points since […]

Read More
August 1, 2018
Gen Z - Banking's Newest Battleground

According to the latest Consumer Atlas results, financial institutions separate […]

Read More
July 26, 2018
One In Two Australians Missing Out On Multi Policy Discounts

Research by DBM Consultants using Consumer ATLAS data reveals that […]

Read More
July 20, 2018
Overseas born Australian residents turning away from Big 4 banks

New results from DBM Consultants show that market share and […]

Read More
July 13, 2018
Fewer Australians Have Home Insurance

New findings from DBM Consultants’ Consumer Atlas reveal that fewer […]

Read More
July 5, 2018
Big 4 Reputation at "lowest level recorded"

Latest survey confirms damage done to Big 4 banks in […]

Read More
November 21, 2017
Up to $100 billion of owner occupied mortgages up for grabs as customers look for alternatives.

With the owner occupier mortgage market worth about $1 trillion, […]

Read More
November 20, 2017
Close to 350,000 Australians have Pet Insurance before Private Health Insurance

You might find this hard to believe, but a sizeable […]

Read More
October 3, 2017
Investor Property lender ratings vary widely across the nation

Investor property mortgages undergo high levels of scrutiny from the […]

Read More

Find Out More

Chat To Our Team
DBM logo_white
menu