Only 2 Industries Call Their Customers “Users”

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Only 2 Industries Call Their Customers “Users”

The most important metrics for most disruptive companies, public or private, are user growth and time spent engaged on the platform. That is how disruptive technologies scale, after all, and also how capital markets justify large valuations. Think Uber or Spotify: they may lose significant sums of money, but large customer bases and usage growth give them upside potential.

There is a flip side, however, as Americans increasingly worry about the health consequences from too much consumption of smartphone-based services. Consequently, companies including Apple, Facebook and Google continue to release tools that help users monitor and curb their time spent on cellphones and social media. New work by Pew Research shows why they have to walk a fine line between feeding their own business models by capturing people’s attention, but doing so in a way that their users feel is productive.

Here are a few key takeaways from a recent Pew study of 743 US teens (aged 13-17) and 1,058 US parents of one or more teens:

  • Almost all (nine in ten) teens “view spending too much time online as a problem facing people their age, including 60% who say it is a majorproblem.”
  • About half of teens (54%) worry they spend too much time on their cellphones, while 41% are concerned they dedicate too much time to social media. As a result, a little over half (52%) report cutting back on their cellphone use, as well as social media (57%) and video games (58%).
    Girls are more likely to report spending too much time on social media (47% girls vs. 35% boys), and boys are more likely to admit spending too much time playing video games (41% boys vs. 11% girls).
  • The majority of teens (72%) “say they at least sometimes check for messages or notifications as soon as they wake up (with 44% saying they often do this)”. Most teens (56%) also “associate the absence of their cellphone with at least one of these three emotions: loneliness, being upset or feeling anxious.” Girls are particularly lonely or anxious without their phones as compared to boys.
  • Likewise, two-thirds of parents report concerns about their teen’s cellphone use, and 57% say they set screen time restrictions in some way. That said, they aren’t setting the most stellar example for their kids. Although fewer parents (36%) than teens believe they spend too much time on their cellphones, about half (51%) of teens “say they often or sometimes find their parent or caregiver to be distracted by their own cellphone when they are trying to have a conversation with them.” Ironically, most parents (86%) are “at least somewhat confident they know how much screen time is appropriate for their child”.

What do we make of all these findings? A few points:

#1. Teens in particular get a bad wrap for “always being on their cellphones”, but at least they know this is a problem. Many want to cut back on their usage and also see it as an issue for their parents.

There’s also an important social element, especially for young girls. Although they understand too much social media can be harmful, they still feel a lot of pressure to engage with their cellphones and social networks. Other negative side effects associated with these types of activities like bullying only compound the issue. This highlights the addictive nature of phones/apps/social media that companies have not done enough to address.

#2. Teens are an important demographic for tech disruptors, as they represent the next wave of customers. Since consumers tend to develop brand loyalty early on in age, their perception of smartphone and social media companies matter. This may be one reason why Google/Apple/Facebook/Instagram/YouTube have started to provide some time management solutions for their concerns. They want to keep young users engaged, but not turn them off.

#3. We expect more efforts on behalf of smartphone/social media companies to help users navigate their platforms more efficiently going forward. The Pew survey showed while teens spend too much of their time on cellphones, they at least admitted to doing so more than their parents. Bottom line: smartphone use has become pervasive across most age levels. Social media/smartphone apps have essentially hit saturation in terms of user engagement and users are now pushing back. This suggests there may no longer be any more hours for them to capture in the US, so platforms have to now fight for market share or learn to coexist.