In recent posts from the Etcétera blog we have introduced you to Chatbots and we have analysed the Smart Technologies revolution. In this latest post about the market trends we have detected we want to talk about Family Plans. Don’t tell me you are still contracting services via an individual plan? Come on, get with the programme.
From Little House on the Prairie to Modern Family
Family plans, the latest marketing trend on the market
Image courtesy of Modern Family (ABC)
So it seems to be that individual consumers are losing prominence: next generation companies such as Netflix, Spotify or PlayStation have all introduced Family Plans as a new way to attract and retain customers. But we want to know why is this happening? And why it’s being so successful?
The launch in Spain of the Family Plan concept comes hot on the heels of the success achieved in the United States. This new type of service offer implies a rupture with the operators´ traditional approach based on offering a contract for each individual user, and at the most with one additional service. Still this is not a blind bet. Many companies have realised that the future of the service business is not in individuals, but in families. Family Plans are breaking into more and more sectors and everything points towards them becoming a dominant trend in the marketing of services in the coming years. So, here at Etcetera we want to know what do the families or groups have that makes them so interesting for service marketeers?
The Family is an ideal client
If you do a search on the Internet, you will quickly realize that almost every major tech company offers some kind of a family plan. This type of offer allows all family members to use a service in exchange for a single monthly rate, whether music (Spotify, Deezer), videos (Netflix, YouTube Red), games (xBox, PlayStation), etc. And the Family Plan trend is also expanding across sectors such as finance (for example CaixaBank´s Family Account), transport (Uber´s Family Profiles) or even dentists (Unidental´s Family Plans).
It seems a logical approach because a family has a higher purchasing power than an individual and also needs a more complex set of services. But that´s not all, because family plans provide other benefits both to customers and businesses.
Advantages of Family Plans for clients:
- Saving money in comparison to contracting the same service separately.
- Lot of providers offer a discount for family rates.
- Simplify payments and expense control by receiving a single bill.
- Allow monitoring of the use of the service by the family.
- Respect privacy of each member (an account for each user).
- Offer a shared experience for all the family (seeing the same film, listening to the same music, communicating with each other, etc)
The reasons why many companies are betting to offer Family Plans:
- Increase the average amount of the invoice in comparison to an individual plan.
- Reduce consumption compared to individual customers (family plans offer more capacity although users do not usually use them up).
- Add new users to the service (for example, children) who would otherwise have no account of their own (because they are minors or unable to pay).
- Reduce marketing costs by allowing to capture more clients with fewer actions.
- Simplify the management, having to issue a single invoice and charge into one account.
- Enhance customers´ loyalty since it is more difficult for a whole family to decide to change providers at the same time.
So as you can see the real question is not why are they so popular but why have marketeers taken so long to get them up and running?
From Little House on the Praire to Modern Family
There is no doubt that family plans have more advantages for clients and for the companies that provide services. So in the coming months we will see for sure an avalanche of family plans in different sectors, starting with telecommunications, but also in new areas that follow this trend.
New families are a source for business, but be careful! Brands must know how to understand and address them properly
However, there is one thing that brands which are committed to Family Plans should take into account: today´s families are very different from the traditional family model that was the target audience for marketers a few decades ago (you remember? : the working father and a mother who stays at home to take care of the children and grandparents).
Nowadays, both spouses have a job, the household chores are shared (well that’s a whole other blog post!) and shopping decisions are made jointly, often also counting on children´s opinions (especially when it comes to new technologies).
In addition, the diversity of current families makes them look more like a chapter of Modern Family than one of Little House on the Prairie: there are single-parent families, with two dads or two mums, children from different relationships, who live part of the week with one parent and part of the week with the other, multicultural families, etc. In fact, if we also take into account the people who live alone the “traditional” family refers to actually 50% of households.
This means that a family plan client has become increasingly complex and the more complex the profile the more valuable the set of data for the service provider. Data which can be used for all sorts of purposes by brands who know how to mine and extract what they need in order to customize their service offer and provide Family Plan tailored to each family’s needs.
Do you use any Family Plan?