If the content of this story by Matt Wade is any indicator of a broader attitude to stick with the status quo and not search out alternatives, then it’s little wonder that the mainstream funeral industry has most Australians convinced that what they have to offer is all there is on offer, and that to do things any other way is a step too far outside the established comfort zone.
In: Sad case of ‘till debt do us part, Matt Wade (The Sun Herald, July 8, 2014) writes about the stories we tell ourselves that determine the course we move along, often in spite of the realities taking place around us.
“Consumers can be a compliant lot. Just look at our banking habits. Surveys have shown more than 5 percent of Australians have been with their main bank for more than 10 years. That’s longer than the median duration of Australian marriages that end in divorce – 8.7 years from wedding day to separation, according to the Australian Institute of Family Studies.”
“But consumers aren’t just creatures of habit, they’re also prone to suffering in silence. A 2011 survey conducted for the Australian Communications and Media Authority (ACMA) found that 76 percent of those who contacted their communications provider with a grievance did nothing about it. Complain and note it with the ACMA, but then didn’t bother to follow through.”
For all those who do complain, millions say nothing. They just put up with bad service.
So why are so many consumers so passive? One reason is what behavioral economists call “loss aversion” – the tendency for consumers to care more about preventing a loss than making a gain. The fear that a new unknown supplier will be even worse or at least no better than the one they’ve got.
Consumers also have a tendency to overestimate the short-term costs of switching and to underestimate the longer term benefits of switching. This is linked to what researchers have found to be a strong “status quo bias” in consumer behavior. People are surprisingly reluctant to change their circumstances even in the face of an obvious long term benefit.
We Aussies face another dynamic writes Wade, that might sap our motivation to switch – an economy marked by oligopolies. A host of important consumer markets, including banking, airlines, supermarkets, petrol and telecommunications, that are all dominated by a very small number of very big players. Why change when the few alternatives don’t seem very different.
NOTE: And this is increasingly the case with the instance of the funeral industry, one of the subjects of these posts, as the smaller family businesses are gobbled up by the largest investment based corporates.