Pay monthly vs PAYG: predicting consumer preferences

Our reliance on fast, high-quality communications is ever increasing. Ofcom’s latest report tells us that ‘for many people, internet connectivity is now as essential as gas or electricity’. It also reveals that the average UK adult spends more time on media and communications than they do sleeping.

Given the role communications play in our lives, it’s not surprising that competition is fierce. So, telecoms companies wishing to sharpen up their marketing messages need to take account of everyone’s financial circumstances and attitudes.

For example, whether a customer has a pay-as-you-go (PAYG) phone or a pay monthly contract is usually linked to affluence: those with better credit will go for a contract, those considered to be less stable financially will often settle for PAYG. So, you can use insights into people’s affluence levels to decide which product to promote. Other data variables can show you a customer’s typical mobile phone spend, and even which type and brand of handset they’re likely to have.

Experian’s Financial Strategy Segments (FSS) tool classifies the UK population into 15 customer groups, 55 types, and 135 person types based on over two thousand variables, including those related to life stage and affluence. Those most likely to be on PAYG – all characterised by lower affluence and higher credit risk – are Group A: Earning Potential, Group E: Family Pressures, Group J: Single Earners and Group L: Cash Economy.


FSS_A_EarningPotential_screen1FSS_E_FamilyPressures_screen1       FSS_J_SingleEarners_screen1FSS_L_CashEconomy_screen1








Digital devotees and savvy switchers

Our latest consumer trends report reveals a number of key consumer trends. Of interest to the telecoms industry is the rising number of ‘digital devotees’ who spend much of their time online – these are the people most likely to want the most data, the fastest broadband and the latest handsets.

Many of these digitally switched-on consumers are switching between suppliers, too. The trend goes hand in hand with another group, ‘savvy switchers’, who are most likely to shop around to save money. The more familiar with digital platforms a consumer is, the easier they’ll find it to track down deals and switch suppliers.  We see this behaviour among several of our FSS groups, including Group H: Small-scale Savers and Group D: Deal Seekers.

Interestingly, Ofcom is also looking to facilitate this switching behaviour. With a focus on helping the consumer get the best deal, the regulator states that an aim for 2016-17 is: “Improving consumers’ and businesses’ ability to make informed choices by providing more granular, clear and accessible information”.

While many switchers belong to the more affluent consumer groups with a good handle on their finances, a significant proportion are less well off. Either way, by understanding who may be tempted to switch – and why – you can be proactive in offering incentives to retain them. In a challenging market, this level of insight into customer behaviour gives your marketing strategy every chance of success.

To find out more, download our report on current UK consumer financial trends or visit