With iPhone App Store having close to 100,000 applications, the most intriguing question is that can any other platform match the enormous ecosystem advantage iPhone has through these applications? On the flip side, top 40 applications in iPhone are really what 90% of people care about. So will Android, BlackBerry, Windows Mobile et al level the playing field by getting these top 40 applications on their platform?
Indirect network effect of the applications (apart from the design genius) makes iPhone one of the most wanted gadgets today. It’s the same network effect that gave Windows the edge in personal computing and is working for Facebook in social networks. But one industry difference makes iPhone more vulnerable than Windows in 90s and that is the openness of the competitive platforms. In the smartphone world, all platforms are open for software developers to launch their applications. The developers who wrote applications for iPhone will pretty much write applications for BlackBerry et al if they see traction for these phones and their applications in the market. If the competitive platforms are good enough to rope in the top applications on their platforms, they might be able to bridge the gap.
But then there’s the long tail. You go somewhere, you remember it because that was the place where you found that obscure song you were looking for, a copy of that biography you didn’t find anywhere else, or that phone application which helped you survive in a foreign country. With close to 100,000 applications, you can find almost anything in the iPhone App Store based on your needs at any given time and it will be a while before a competitive platform catch-up on that.
So will top 40 level the playing field? Well it depends. If the tail behind the head is long enough to attract the masses, the company with the long tail can survive the competitive attacks. What is required in this case is to make sure that the customers realize that you have got the long tail. Your communication with your target customer base should focus on, among other things, the long tail.
Categories: Business · Technology
…you risk to lose the right someone.
The counter argument to this is that volume counts. Well that’s true, but going after everyone, you might end up diluting your brand so much that it doesn’t have value for anyone. You should think if tomorrow you stop existing, will you be missed? If the dilution is enough to court everyone, the likelihood of you being missed is really low. You will set the bar very low for replacement and the possibility of an alternative taking your place will be really high.
On the other hand, if you have a strong connection with a right set of some passionate followers, you will be missed, missed enough for them to try hard and keep you in business. And when the time is right to grow, you will have these right someone pushing hard to help you cross the chasm and reach mainstream.
Harley Davidson, Ikea, Red Bull and Whole Foods are some well-known examples of the companies that chose to go for the right someone, who became their brand ambassadors. They care about the brand, make worthwhile contribution to it, and above everything else, help spread the word. What these brands got is invaluable and unmatched. They got a dedicated team of mavens who go out there and speak on their behalf to everyone they can, and when they do the talking, it’s more credible than anyone the brand hires to do the same.
Categories: Marketing
Yesterday at 4pm my laptop adapter died. I called Lenovo customer service, my call was answered with a less than 2 minutes of wait time, the issue was diagnosed in less than 10 minutes and a replacement request was placed. Next morning at 10 am I had the UPS guy at my door to deliver a new adapter. After having my share of horrible customer service experiences over time, this experience with Lenovo just wow-ed me.
All laptops are made in China, probably in similar, if not the same, manufacturing facilities. Price as the differentiator is out because they are all pretty much equally priced. All run the same programs. So how do you differentiate one from the other? That’s where customer service comes into picture. You can put life into seemingly commoditized industry with the help of customer service.
This must make you wonder why I am making such a big deal of customer service which I should generally expect to get. It’s partly due to the deteriorating condition of customer service across the board. So when someone like me gets good customer service somewhere, we talk about it and let people know.
I like to draw analogy between customer service and design. Imagine you keep seeing badly designed personal music players one after the other and then you suddenly come across one that is very intuitive, easy to use and fun to carry, or in other words, just great design at work. You notice it and you mention it to others. Same thing happens with customer service and whether it’s Lenovo or Asiana airlines or Zappos, all of them get good amount of mentions, courtesy of their customer service.
To bring this analogy to closure, here’s the flip side. You keep coming across well designed personal music players one after the other and suddenly you come across one that is not up to the mark. In that case, you will notice that bad design and start drawing comparisons with the good ones around. Similarly in case of customer service, if your entire industry is providing better service than you are, you can be in lot of trouble.
Customer service can make a lot of difference and influence a buying decision. So irrespective of what business you are it, make sure you don’t mess with customer service.
Categories: Business
Why do you buy anything? You buy a bottle of water because you are thirsty, you buy an iPod to carry your music around, you buy a luxury car to trade up. The list can go on and on. The basic idea behind buying anything is to solve a problem. This sounds so simple. Then why is anyone trying to sell anything? Why do we have sales people? What we need is a bunch of problem solvers trying to find solutions for our problems.
Put it in other words, the objective of sales team should be to find how a product can solve a customer’s problem. A customer is not going to buy a new suite of software just because it’s a new year and your product version should match the year you are living in nor are they going to choose your brand over the one they are already accustomed to just because you asked them to do so. You got to have a legitimate reason and the best reason is to make customers realize that you are solving a problem that is not solved by the current status quo.
McDonald’s may have a shot against Starbucks because they are solving a customer’s pain of making two stops to get breakfast and coffee and replacing it with a single stop. Prius might win the race against traditional cars because it reduces the monthly spend by customers on gas. Xbox got an upper hand over PlayStation because Xbox Live enables people to play together and Netflix won over Blockbuster because it removed the trouble of going to the local rental store to rent a movie.
While developing a product and marketing it, it is important for you to think about the problem you are solving. When you understand the problem and try to solve it, your job is done. Selling will be a side effect which will happen during this process.
Categories: Business · Marketing
Cannibalization, in very simple terms, is losing market share of one product by introduction of a new product by the same producer. Talk about Hulu, and one of the things that come to mind is cannibalization of network airtime by broadcasting television shows online. But then talk about YouTube, DailyMotion et al and one of the things that come to mind is losing airtime to competition on new media channel. Which one sounds better? Losing market share to your own product or losing share to competition?
This is a classic question which every company needs to address to some extent while releasing a new product that in some ways is competing with a current offering.Whether it’s Coke launching Diet Coke or The New York Times investing in nytimes.com, you have to look in the issue of cannibalization. When does cannibalization make sense?
Short answer, when there is competition. Long answer, almost all the time. When you see an opportunity to come up with a new product to tap a new channel or a new way to fulfill some customer needs, you should go for it. Because the possibility is that the same opportunity is being discovered by other players in the industry irrespective of whether they are currently competing with you or not. Like Amazon never competed with Barnes & Noble through brick-and-mortar stores, but as Internet started gaining traction and Barnes & Noble delayed putting together an Internet strategy due to various reasons, including fear of cannibalization, Amazon discovered the Internet as a channel to sell books and took off. Parallels can be drawn, to some extent, in case of Microsoft delaying to put Office Suite online while Google Apps and Zoho tapping that market (though Microsoft Office losing share is not an issue at this time).
The point here is, more often than not, cannibalization is required. It should be seen as a growth engine. When a better channel of delivery emerges, people will notice it just like you will. If you go and tap it, you have an advantage of expertise of delivering product on the traditional channel and brand name over anyone else. You can grow the sum total of your business by using all the channels available. But if you sit and watch the show, someone else will develop the expertise and gain the first mover advantage on the new channel.
Accept the fact that change is constant. One way to grow in this changing environment is by keeping up with the change and if the only way to do that is by cannibalizing your own product, go for that. It’s much better than losing it to the competition.
Categories: Business · Technology
When you see a 79-year-old living idol refer to his mentor’s name half a dozen times in a 60 minutes talk, you got to pay attention to it. I had this unique opportunity to listen to Warren Buffett and Bill Gates at a town hall event at Columbia Business School. I got more than a few sparks to think about, but one I believe I should share with everyone is the importance of Ben Graham for Warren Buffett.
You will say that there can only be one Ben Graham and one Warren Buffett in a generation. True, but that’s not the point here. The point here is to find a true mentor, an individual who inspires you, someone who makes you excited to talk to and work for and make you a better person. Ben Graham was a great professional mentor to Warren Buffett, someone whose values he lives up to and applies in his work even to this date.
Many of us will find our parents as inspiration to live up to. They are possibly the best personal mentors one can ever have and the easy thing here is, you got them when you were born. In your professional life, it’s a bit harder than that. I asked someone lot smarter than me: how do you know that this is the Ben Graham for you? The answer: it’s more of a realization than anything else. If that’s the person who energizes you to stay up at night and get things done, if that’s someone who motivates you to jump out of bed early in the morning and that’s the person you can refer to in order to crack the toughest codes, you found what you were looking for.
Good luck!
Categories: General
New media, communities, customer intelligence and targeted marketing. Speak of them and the first thing that comes to mind is technology. Of course technology enabled all this to happen, but it is not about the technology. Technology is the enabler here, but it’s about how you adopt the technology and how well you consume it.
New media is there for all. People talk about everything. They search and research for things they buy. Technology empowered them to have access to unlimited information at their fingertips. Now it’s about how you, as a company or organization, can use the new media and reach your customers, how you can create interactive channels, how you can come out of the traditional media shells and meet your customers where they reside.
Communities are great platform for you to talk to your customers. Connected people, powerful devices and web-based platform can provide you all you need to interact with your customers. You got all the tools, so now it’s about how well you use them. It’s about how you take in the input from your customers, how welcome and important you make them feel and how you use the platform to promote your objective.
There’s large amount of data available to mine intelligence about your customers. Using data extraction and mining technology, you can find in-depth information about your customers. It’s about how you use this information, how you make your message more appealing to your audience and how you implement changes to provide the best products to your customers.
Technology is a great enabler. Over the ages it has opened new avenues and empowered us in new ways. That’s not going to stop. A decade from now, you will get something more revolutionary to make the current new media and customer intelligence seem traditional. The important thing is to accept it and make it about how we can use it and make the most of it.
Categories: Marketing · Technology
Market research is one of the most fascinating areas in the world of marketing. Companies spend billions of dollars each year on getting market research done. Nielsen, one of the pioneers in the field of market research, made $3.7 billion in 2006 to find which product sells, which TV programs people watch and which music and books were getting consumed. Whether it’s a washing detergent or a presidential candidate, market research has its role to play.
A survey based market research has a huge dependence on a couple of things: what questions are being asked to the people and the sample of people to which the questions are being asked. The basic shortfall of such a market research is that the results can be skewed by tampering either one of these parameters. Plus the opinion of the target group is limited to the objective questions asked and to add to that the consensus building exercise is closed and constraint.
Another way to do market research is by using the social media. People talk about your product, their problems and how they are trying to solve them on social networks. They discuss and critic. Researchers can monitor conversations people have on various social network and infer what people want using these conversations. To make these conversations more fruitful, the company can host discussions. It can provide a community platform to customers and marketers to facilitate direct communication. This community – controlled and monitored – can be analysed by the researchers to reach to a consensus with the help of direct customer participation.
A community based market research has a few key advantages. The information gathered is broader as compared to what is gathered through surveys providing researchers reasoning behind a customer’s poll choice. And the consensus is built in an open environment, with active customer interaction, making it more credible and effective.
Categories: Marketing · Technology
What do you want in your advertisement? Something that people like, appreciate and get excited about. Something unique that can help them link to your brand. An effective advertisement campaign has a singular theme for all mediums which can be identified by the customers. A good way to design that theme is by using the social media.
Marketers can monitor various elements of web-based social world to identify what people think about their product, which part of their product most excites them and what are the turn-offs. They can monitor what people generally look for when they are shopping. Using this information effectively, and designing advertisements by keeping in mind the factors that will appeal to the customers, marketers can design better advertisements as compared to the ones designed in a silo.
To take it a step further, a company can have their own community where it can interact with its customers. By having discussions on their domain, marketers can extract customer intelligence on the conversations taking place. They can conduct polls and surveys, have healthy discussions and better understand what clicks for their customers. Essentially, by doing this, marketers will be in a way able to indirectly run themes by the customers and come up with campaigns that are most influential in the community.
The idea here is to take help of your most engaged customers in designing the marketing campaigns. Creativity in designing the advertisements is as important as anything else, but just imagine how much more impactful that can be when you are hitting the right strokes in the right style!
Categories: Advertising · Marketing · Technology
“If I had asked people what they wanted, they would have said faster horses.” This famous quotation from Henry Ford puts listening to customers and innovation opposite to each other. It is quite possible that if Henry Ford had asked people what they wanted, they might have said that they want to travel faster, putting both at the same side. Though the important thing to note here is that Ford didn’t ask customers and came up with arguably the biggest innovation of the industrial age. The question this raises is an important one: can you innovate without listening to the customers?
Companies put a lot of focus on what customers want when they develop products, which leads to great products to solve big problems faced by customers. But then there are breakthrough products which come along every now and then which no one expected or asked for. Apple is known for doing that all the time. No one asked for or expected an iPod to fit every pocket and budget, nor did anyone imagine an iPhone to revolutionize the cellphone industry. Both solved big customer problems like organizing their music in a cool device and putting a little powerful device in their pocket that can have a few dozen necessary applications (and can be used for talking) respectively. But had Apple asked customers what they want from the company, it is quite possible that they would have remained Apple Computers satisfying the need of their niche market.
So one might wonder how Apple, or for that matter any company that comes up with breakthrough innovation, does that? I believe by putting themselves in the customers’ shoes. If you develop a product that you would love to have, something that makes your life easier, something that solves some major problems for you, the chances are your customers will love to have that product as well. All you need is honesty, persistence and self critical observation.
And what about listening to customers? That’s post version uno. You put the breakthrough product out there and now let the customer chip in to tell you how you can improve it and make better to fit their needs. Then you form the maven force to help you deliver breakthrough products and great customer focused innovation.
Categories: Business
