June 13, 2014
With Kristopher Arcand
From Time Warner and Comcast to AT&T and DirecTV, corporate mergers appear to be the latest tactic in winning the battle for market share and driving innovation. From a business perspective, the strategic advantages of such mergers may be clear — but what do these changes look like from the consumer’s viewpoint? To understand consumer reaction to the latest series of merger announcements, Forrester leveraged its Technographics360 approach of linking multiple data sources to give a holistic view of consumers. Specifically, we tuned into online chatter with our social listening platform and engaged our ConsumerVoices market research online community for this analysis.
According to the data, consumers associate mergers with increased costs, fewer opportunities for choice, and decreased product and service quality. While a few individuals appreciate the potential for innovation that mergers might afford, the prevailing sentiment is uncertainty:
The fact that individuals are wary of these corporate mergers partially stems from the timeless truism that “people are afraid of change.” To mainstream consumers, a large merger suggests a loss of customer control and greater uncertainty; according to the Harvard Business Review, these are the top two qualities that underpin a fear of change.
However, news shows that these recent mergers are the means to a bigger end of building more effective digital platforms. According to a recent report by my colleague Jim Nail, those who oppose certain mergers and fear reduced competition "are missing the bigger transformations that are reshaping the telecommunications landscape." Therefore, companies that are transparent about how potential mergers will benefit customers, and that show the specific impact on costs and quality of service, can take the first step in assuaging consumer uncertainty and capitalizing on consumer appetite for innovation.
To view the social listening and online community findings regarding consumer response to the recent merger announcements, please see the slideshow below: