As smart home appliances and Internet of Things (IoT) devices are increasingly making their way into Canadian households, they are changing the dynamics and expectations of consumers for their internet service providers (ISPs), according to J.D. Power’s study.
Customer satisfaction with their ISP increases with the number of connected devices being used at home. Overall satisfaction is higher among customers with two or more connected devices (742 on a 1,000-point scale) than among those with only one connected device (721) or none (713).
Study findings show that customers with smart home products are less price-sensitive and are willing to pay more for better service. Nearly two-thirds (63%) of customers with smart home products indicate having a willingness to pay more for internet service, compared with only 50% of those with no smart home devices.
However, while these findings are good news for ISPs, they do come with a caveat: customers with connected devices are the least loyal to their internet providers and will easily switch for reasons such as better features (24%); more reliable service (22%); or just to try something different (21%).
“Technology advancements continue to influence the way consumers use the internet,” said Adrian Chung, Director of the Technology, Media & Telecom Practice at J.D. Power in Canada.
“They’ve become enablers in peoples’ lives and, as such, customer expectations of service providers are evolving. Reliability and faster speeds are increasingly more important factors in customer expectations and satisfaction, especially among younger and more tech-dependent users. The ability of ISPs to unlock the potential of their premium service offerings will be critical to success as adoption rates of connected and smart homes devices increase.”
Among the key findings of the 2018 studies is that younger generations make homes smarter: Nearly 1 in 5 Gen Z1 and Gen Y customers have a smart home device connected to their home internet (21% and 18%, respectively), compared with only 5% of Pre-Boomers and 8% of Boomers. Younger customers also are more likely to own multiple devices. Smart Security and Smart Appliances are the most common smart home applications.
Also, gaming consoles not just for games. Nearly every internet customer surveyed (96%) has some type of gaming device that is connected to the internet and 22% own a dedicated internet-connected gaming console (e.g., PlayStation, Xbox and Wii). Owners of dedicated internet-connected gaming consoles are more likely to cut ties with wireline TV service providers, with 32% watching streaming content on their device. Additionally, 15% of console owners plan to drop their TV service in the next 12 months, citing streaming service as their most likely product to switch to.