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Consumers suffer information overload in phone deals: study

Ashley Hall reported this story on Wednesday, September 7, 2011 18:54:00

MARK COLVIN: Ever felt flummoxed and confused by what should be the simple business of choosing a mobile phone plan?

You're not alone.

And now of a consumer behaviour study confirms that choosing a new phone deal causes stress, frustration, confusion and information overload.

The study was unveiled today by Deakin University and the Australian Communications Consumer Action Network.

The researchers gave video cameras to people in the process of buying a new Smartphone so that they could record exactly what they experienced and then subjected them to a number of tests.

What they found was a strong vein of mistrust about telecommunications companies, especially when it comes to bundled products and limited time offers.

The study's author, Dr Paul Harrison spoke to Ashley Hall.

PAUL HARRISON: By the end they were beaten and exhausted and many of them actually did just say, I can't be bothered, I may as well stay with whom I am.

ASHLEY HALL: So let's unpick that a little bit; you found that there was a great deal of mistrust of the telcos?

PAUL HARRISON: Yeah. We really struggled to find positive input from the participants. We spoke to 22 people, we recorded 50 hours of video with them. Now that may be a result of expectations and telcos promoting things to them all the time but in the end, these are the real voices and what people perceived.

ASHLEY HALL: They found it really hard to compare products; why is that?

PAUL HARRISON: Well look I think telephone products or any telephone product has so many different elements to it; it's very different to say buying a tin of baked beans where you're basically buying beans and they can give you a unit price for 100 grams. This has got the telephone itself, it's got the amount of calls you might make or when you make those calls, sending SMS, downloading data.

Some people said I don't even know what a megabyte is, so the real difficulty is that it's already an incredibly complicated product and one of the tests we looked at with unit pricing was that it actually made it more complex for people when they were given unit pricing.

ASHLEY HALL: But you've advocated, one of your recommendations is to trial unit pricing; usually the argument there is well you can compare apples and apples then. Why was it complicated?

PAUL HARRISON: Well you can't compare apples with apples at the moment in the telecommunications sector. There are so many different types of products. There's a sales mentality so every telco provider is trying different ways to get consumers to buy their product.

Part of what we recommend is that if there is going to be unit pricing, we have to actually make sure that unit pricing is understandable by consumers. So just going out there and giving people figures is not going to be enough to help them to make good decisions.

ASHLEY HALL: And I suppose that comes to the nth degree when you look at bundled products, where you've got a home phone, a Smartphone and maybe and internet service as well, that's all bundled together and perhaps on a limited time offer; consumers don't respond well to that?

PAUL HARRISON: No they didn't see any value in bundles and they also actually had a higher sense of risk when there was a limited time offer. And what really fell out of that was that because people could see that this wasn't a scarce resource, that the limited time offer was purely just a marketing ploy to get people to behave the way that they wanted them to and so people didn't see any value in that and avoided those limited time offers.

ASHLEY HALL: And for years we've been hearing people saying that there is too much fine print in the telecommunications offering that the terms and conditions are hard to understand and they're tiny and are difficult to read. But you found that customers are more scared of that when it's in big print.

PAUL HARRISON: Yeah. One of the things that the ACMA is talking about is introducing 15 point font for terms and conditions. What we're suggesting is that in one way when we measured the 15 point font people did think that the product was more risky but what it also meant was that they were more likely to read it.

ASHLEY HALL: Despite all of the rational elements that you've presented here about the decision making process, can that all be scuttled, if you like, by someone's emotional response to a lifestyle advertising campaign that promotes to them that this product or this phone service will give them the life they've always wanted?

PAUL HARRISON: Well that's what marketing is. Marketing is about tapping into your emotions, not into your rational thinking and we've always argued with the regulators that we have to recognise that these products are an extension of self in a way and lots of people are using that and a good advertising campaign that doesn't even mention any of the information about the prices or anything like that will appeal to certain markets and we have to recognise that.

The issue comes down to though whether we're comfortable with people making poor decisions and whether that's actually good for the general community.

MARK COLVIN: Deakin University's consumer behaviour specialist, Dr Paul Harrison speaking with Ashley Hall.

From the Archives

27th February 2003


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