I would like to start with a disclaimer. I have long admired Apple designed products even though I have never owned an Apple product. Every time I would get an interest in buying one and come to a store to try them, I would find them disappointing, as very enthusiastic Apple supporters seem to create expectations, that are very difficult to meet. I am also an admirer of Steven Jobs, perhaps because I have never met him in person . However this writing is not about my personal opinions, but a comparative analysis of market intelligence produced by our algorithms, based on customer generated content or Word of Mouth, and some additional external information sources that will be specified as I sight them.
Two latest Apple products are generating a lot of press and some of it is decidedly negative – iPad and iPhone 4. This writing will focus on the analysis of the iPad devices. When you try do “comparative” analysis one starts with a list of products to compare and iPad makes it very difficult as it seem to be positioned to compete with e-readers as well as tablets. The tablets category definition presents us with yet another challenge, so for the purpose of this analysis I decided to compare iPad with popular e- or digital book devices as well as some tablet devices that do not have a physical keyboards. Some popular retail website offer a very useful hint to see what percent of people who looked at a product actually purchased it, and if not what was the product they did, however in the case of iPad or Kindle such information was thoughtfully removed from every site I have checked. I also am very disappointed not to find any customer reviews on the Apple store website. It is very hard to believe that none of over 3 millions of iPad customers did not write about their product experience on the manufacturer store site. The only possible explanation of that can be found in accusations that Apple actually censors the iPad customer discussions the same way as they accused of doing for iPhone4 here and here. It is very disturbing if it is true.
So here is the list of products I have decided to compare in terms of them meeting their customers expectations. You can make it larger if you click on the report.
Here is the scale legend for better understanding of the report.
iPad did not meet expectations of their customers, who wrote the reviews with 53% reported negative experiences (0.91) related to Reliability, and 65% of comments about Support were negative (0.94). To be fair, the customers are overwhelmingly impressed with screen readability (100% rated 1.81) and usability of the device (96% rated 1.53).
I know the Apple just reported 78% increase in profits, but with 63% of their flagship product customers reporting that its value did not meet their expectations (0.98), I can’t help but wonder how long it would take for Apple to start loosing it’s “freshness”.
How can you maximize your stakeholders’ return on investment? Treat your stakeholders like your customers. What is really important to them? For example, is it just a return on investment or some sense of control? If they are sitting you in board room, your living room, or your office, then there is a strong possibility they are not just interested in the dollar amount annually reported on an IRS Form K-1! If they attend meetings, even just to earn a stipend, they want information.
Many online shoppers now use social media to make informed decisions about their purchases. Are your stakeholders any less discerning? Perhaps management should consider going beyond an annual report to decision-makers and integrate them into your operational rather than just strategic processes. Are “active” stakeholders in your product or services aware of what your customers “really” say about your products or do they receive summarized, massaged statistics that have a 4-figure precision? Have you noticed that with the emergence of a Global Village, there are now many self-appointed “town criers”? Social media forums and blogs provide the digital equivalent of a local village square. As a manager, do you have the resources to provide your stakeholders, assuming they are interested, with raw and timely “online buzz”? Can they “(with)stand the truth”?
A meaningful picture of key performance indicators (KPI) is not complete unless they are somehow linked to critical success factors (CSF); the two are very different but ultimately affect the same bottom line – stakeholder ROI! Defining a critical factor that will make a product successful doesn’t necessarily have to come from the boardroom or the Research and Development department. In today’s Global Village, a critical success factor more than likely comes from an unsolicited comment made in some public forum! Social media not only keeps Jane and John Customer informed but actually helps “must-have” features crystallize in their minds before they make their purchase. Failure to integrate “must-have” features into a product design is an obvious mistake that is relatively easy for a product manager to avoid. It takes however, an interaction between the identification of what is exciting and innovative today with tomorrow’s performance indicators to eventually achieve a product’s critical success.
Stakeholders have cultivated a very specific point of view – otherwise, by definition, they wouldn’t have the wealth, education, or power to be a stakeholder. Product managers similarly have a viewpoint, although it, again by definition, is very different from that of stakeholders. A synergy can arise however, if a third perspective, an aggregate measure of customer satisfaction, is added to the “product mix”. Customers want satisfaction; stakeholders want success; the two are fundamentally the same. The successful product manager can extract many actionable insights that ultimately translate into significant returns on investment from what customers’ and stakeholders’ want; they just need to know where to look for their solutions
Like serving borscht, an Eastern and Central European beetroot soup, it is best to consume market research, especially about customer relations, with a healthy dollop of creamy common sense. I recently had dinner with several close friends who happen to be marketing mavens and my business associates. I was quite surprised when what I had intended to be a lighthearted joke brought the four of us into passionate disagreement. I had been discussing an article written by a market research service and summarized my feelings in a simple sentiment – just because you lead a horse to water doesn’t mean you can make him drink TWICE from the same trough; he has to like what he is drinking for him to take a second sip.
Two of my friends immediately pounced; they joined together in a spontaneous lecture that reiterated market data from panels and focus groups about customer acquisition; lead generation through pipeline to close. They had research data that a behavioral psychologist would admire! Both my other friend and I told them that they missed the point – good marketing is about big-picture perceptions rather than a funnel-shaped sales process transitioning from an initial contact to counting sales receipts. Our point was that especially in today’s marketplace you must continually win a customer’s approval, you don’t acquire and hold them like so many shares of stock in an investment portfolio labeled “goodwill”.
Valued concepts of price, product, place, and promotion have undergone a paradigm shift. The emergence of the Internet has helped to democratize business. Mom and Pop businesses can compete on equal ground with multinational conglomerates now. In fact, the sales funnels now have even wider openings to suck in prospects. But “old-timers” often have difficulty recognizing paradigm shifts. What has democratized the Internet storefronts has also democratized Joe and Jane Customer! The sales process once defined by the Four P’s has been digitized and now, in virtual space, finds itself also democratized. In a medium that travels at the speed of light, digital word-of mouth and concepts, like online product or service reputation, rule. Market research points to growing amounts of consumer-generated media as determining customer choice, not to mention customer loyalty. Studies suggest consumers seek out this information before they make a purchase and consider it advice without bias or ulterior motive. You don’t “herd” people into funnels anymore; the savvy shopper more than likely “surfed the web” prior to “selecting” your product or service rather than you “acquired” them through place or promotion!
Besides all that, I reminded my friends that our thirsty horse doesn’t really show its “approval” until it returns the third time! The first sip was the test based on curiosity, the second was a test reaffirming the initial experience; but the third is not only reaffirmation but proof that the water reliably satisfies a need. Finicky horse? Not really. It’s an adaptive survival trait called “conditioned taste aversion” (also known as bait shyness or the Garcia effect). This apparently “hard-wired” behavior protects most mammals from too much of a novel “offering” (for example, poisoned bait) without testing its “safety (or reputation)” value over a short period of time. In truth, even though people do mimic a herd and sometimes even stampede, they are even smarter than horses! Your products, services, or business hasn’t ever really acquired your customers; your customers have chosen you! Reputation has always and will forever rule!
Say you’re a product manager responsible for a line of MP3 players. One of the players is not selling well, in spite of various promotional activities including two price reductions within the last six months. You still can’t find lift.
As with any product development cycle, you conducted focus groups and researched the market to determine the optimal feature set for your target audience, at a compelling price point. The research didn’t yield any unexpected or actionable results.
In addition to handling your regular workload, you have several hundred online customer reviews collected over the last 60 days to plow through. It’s vital to read these reviews but you simply don’t have the bandwidth to go over them all with an attention they require. You need an easy way to filter out relevant customer themes that provide quick, current, actionable insights from customers.
Competitive products offer almost the exact same features as your MP3 player at a similar price. You’re now working on a next- generation player but aren’t clear on what the “must have” features should be for this version. Not only is your market data ambiguous, but also it’s now stale after all this time.
Sound familiar?
Enter Amplified Analytics. Using AAI’s Product Reputation Market Intelligence Reporter (PRMIR), which is based on semantic analysis of customer reviews and behavioral economics models, product managers and key decision makers can quickly segregate and analyze key performance indicators (KPIs) like Customer Satisfaction (CSI) with a product functionality, reliability and a quality of support.
Top category selections, such as MP3 players, on the PRMIR data entry screen are, easily identifiable and simple to find. Users can see the ratio of reviews to products, using a significant product sampling (in the case of the MP3 player, 75:1). All listings are date stamped, so that users know precisely when data has been updated. In just four mouse clicks, a product manager is able to generate meaningful functionality rates for his or her product;
The PRMIR interface allows customers to make multiple selections of competing manufacturers and filter the number of reviews and ranges for several performance indicators, including Customer Satisfaction Index (CSI), Product Functionality Score (PFS), Product Reliability Score (PRS) and Product Support Score (PSS).
When recalculating the CSI factoring out this specific design issue, the MP3 player in question outscores the competition by 4.2%. An up-to-date analysis with easily importable data is available in less than 15 minutes; the entire process takes less time than a normal lunch hour. Most important, stakeholders walk away with accurate data and tangible feedback to ensure customer satisfaction and profitability of future products.
This excellent article by Eric Tsai is full of practical and useful information. I am glad Eric have addressed the issue of customer insights and how it can be used in an organization.
If the sales staff knows what words or questions your target audience used most frequently when talking about your product, they can craft a better sales pitch. If product engineers realize how many different ways people actually use the products they create, they can improve and create better products. If the design team identifies how your customers come to visit your page and where they clicked, perhaps they can increase the conversion rate on your next campaign.
In my experience this knowledge, even if it is available within an organization, is rarely utilized for a process of resolving customer problems with a specific product or in a new product development process. Product Marketing organizations often seem to be more inclined to use “customer” feedback they solicit, via panels and focus groups other then analysis of unsolicited voice of the real customers, who actually purchased their products. I suspect it is the issue of control, and in my opinion, it contradicts the notion of “Social” relationship with customers. Another potential reason of the disconnect is a nature of “soft” raw data, extracted from chats and and forums, does not easily translates into the structured information required by enterprise processes and systems.
Product requirements development without true customer input is one of the most common reasons for a product failure to achieve its profitability expectations. The common practice of capturing this input is traditional market research methods of using customer panels and consumer focus groups. The results of these efforts are only as good as specific professionals conducting these studies that often lead to a very high costs, inconsistent results and unscalable processes. In my opinion, these techniques can be much more beneficial later in the Product Development process, at the Test and Customer Evaluation stage, when specific product assumptions can be validated.
Regardless of methodology you follow for development of a new product, at some point of the process you have to decide what segment of your market you are planning to compete in. That often involves a need to create and analyze a list of existing products your new product targets to displace, to identify target customers and what mechanisms to use for collection of their needs.
Careful analysis of experiences the customers had with the products you target to compete with, can provide invaluable insights into their original needs without any color commentary or interpretation. The critical, and often disregarded part, is that these people have actually spent their own money to satisfy their needs which make them uniquely qualified to provide you with very valuable information. Many of them, estimated 1%-2% total customers, have bothered to leave their comments and reviews on countless social media venues, such as retailer and manufacturer websites, user forums and customer communities.
Availability of customer generated product experience content allows all product development personnel to have direct and affordable access to understanding customer requirements.
The more intelligence you can find about your product segment of the market the higher is a certainty of your new product profitability forecast.
I understand brand as a collection of products, marketed under common name/trademark by a specified company. While the brand is “owned” by a company, perhaps a symbolicimage of abrand resides within the minds of consumers. Formerly, when tenative threats were made to a brand, it could take months for it to be publicly identified. Social media has altered the timeframe to mere minutes.
Recent blogs discussing the topic of real-time brand management were based on the March 13 Virgin America flight detained for more than 4 hours due to inclement weather. I find the debate quite interesting. The story suggests passengers and crew on this flight became quite restless and nerves were waning. During this time, David Martin, the CEO of Kontain.com, utilized a social media app on his IPhone to “share” the unbelievable experience.
This effort initiated a phone call to Martin from a Virgin marketing officer with a $100 voucher proposal for his inconvenience. His response was that all the passengers deserved more. Subsequently, he was called by Virgin’s CEO, David Cush where Martin maintains he negotiated a full refund and a $100-per-person voucher for all passengers.
While you cannot amend the acts of Mother Nature, I am concerned that spontaneous reflexes such as this will begin to emerge when they are more likely very expensive patches for inadequate customer service processes or poor brand management. A deeper analysis of root causes for poor customer experiences with a goal of the these causes systematic elimination constitutes a real “function” of brand management.
In response to the Virgin account John Sviokla suggested, “Every company must have “a brand radar system” to constantly monitor social media.” He also states in a recent blog for the Harvard Business Review that businesses need to adjust to the new reality of being “on stage” at all times. However, Real-time brand management is more than responding at the speed of a tweet. Conceivably, we should strive for real-time identification, monitoring and analysis of customer feedback in an effort to develop a consistent set of rules that makes our brand stand out.
I took almost a month to recover from my CES2010 and now I can attempt to write something more or less cohesive. The experience was absolutely overwhelming. Bright images on gigantic screens and loud sounds continuously blasting away are to be expected at Consumer Electronics trade show, but my mind could not function very well in these conditions. I have not visited such large, noisy and heavily attended events for a few years and the assault on my senses was very difficult to bear, but I managed.
We are a new associate member of the Consumer Electronics Association and this was my very first visit to this event. CEA offers a terrific Mentoring program to its members and I came to Las Vegas to take advantage of it. It is amazing how much one can learn from truly knowledgeable and generous people even during a short personal meeting. I am very grateful to Bill Matthies of Coyote Insight for sharing his deep knowledge and understanding of the marketplace. I started this company with an idea of converting virgin data into actionable information, and we have almost succeeded – Bill made me realize that the link between our metrics and an action is very obvious to nobody but me, and advised to share that link with others using “stories” and “pictures” like this:
Robert Heiblim of BlueSalve and my CEA Mentor, helped me understand the inter-workings of the CE community better and to meet people in CE product marketing to learn more about how they go about conducting their business. I only wish I could get more of Robert’s guidance and advice.
Consider the actions a marketing product manager can take based on the data that their product ABC has a low satisfaction score. I can’t think of any other action than to learn more, i.e. to discover more data. Presumably information is created when our marketing product manager (or product marketing manager) compares ABC’s product satisfaction score with the one of a competing product, hence comparison of two points produce information, i.e. higher value.
Correlating the information produced by tracking these two data points over time with sales numbers can create knowledge – “product with an inferior reputation tends to undersell its competition by X%, when sold at competitive (i.e. similar) price”. Now, this is an actionable piece of knowledge as our MP/PM manager can attempt to discount the ABC product to stimulate sales or attempt to improve the customer’s opinion about it.
Can you suggest any scenarios where aggregated customer feedback about reliability of a product XYZ can lead to/suggest an action that protects and/or improves its profit margin? Your help will be deeply appreciated.
A customer review can produce one point of data relevant to a product. A statistically representative number of customer reviews of the same product can produce a much better quality of a single data point relevant to that product. It is a very good start, but it is still just a single point of data-CSI, CSAT, NPS, etc., depending on the methodology used to collect this data. So what is the value of this point of data? Apparently it is quite significant when used for marketing as people do pay attention to the recommendations of their “peers” or “influence-rs”. Online retailers know that conversion from visit to purchase is much higher for products that have a significant number of relatively positive reviews, and that is why they invest in collecting and managing access to these reviews. The value of this data for a product manufacturer varies from industry to industry.
A couple of weeks ago I attended a presentation by Munjal Shah, the CEO of Like.com and one of his slides really made me think.
In other words data itself is not actionable. Consider the actions a marketing product manager can take based on the data that their product ABC has a low satisfaction score. I can’t think of any other action than to learn more, i.e. to discover more data. Presumably information is created when our marketing product manager (or product marketing manager) compares ABC’s product satisfaction score with the one of a competing product, hence comparison of two points produce information, i.e. higher value.
Correlating the information produced by tracking these two data points over time with sales numbers can create knowledge – “product with an inferior reputation tends to undersell its competition by X%, when sold at competitive (i.e. similar) price”. Now, this is an actionable piece of knowledge as our MP/PM manager can attempt to discount the ABC product to stimulate sales or attempt to improve the customer’s opinion about it.
I already wrote that most CE Marketing Product managers (area of my focus) do not think that they can actively manage a reputation of a product released into the field. However this belief is not based on any wisdom, empirical knowledge, or current data. It is based on the experience of working with traditional tools in an archaic (pre-social media) market environment. The availability of customer feedback about their experience with a product, combined with modern tools, capable to extract actionable knowledge, enable organizations to create causation “pro-active product reputation management produces higher profitability than price discounting and defensive advertising”.
A Social Media Survey conducted on behalf of PRWeek and MS&L by PRWeek and CA Walker found that marketers don’t make changes to their products based on customer feedback, despite monitoring feedback being one of the most common business uses of social media in the first place.
The survey found that 70% of marketers say they’ve never made a change to a product or marketing efforts based on feedback from consumers on social media sites.
I believe there’s two reasons for this.First, we are still in the early stages of social media as a marketing tool. I believe as the technology matures, potentials are stretched, metrics are determined, and processes are developed this will change.
Second, there could be a disconnect between marketing and product management (you said the survey polled senior level marketers). As a product manager, I often used social media throughout the product lifecycle, and the executives I reported to often did not know where the new product ideas came from. And, what I learned through social media, I often further tested through more traditional marketing technologies like surveys, customer visits, interviews, etc.
Most Product Management and Marketing executives I have talked to are interested in listening, but have no strategy, processes, methodologies or best practices to act on customer feedback. Most tools available today are not providing particularly actionable data either. I am not sure what would or should come first, but without these elements you cannot produce any ROI. I attempted to come up with a “calculator” to measure an impact of customer feedback on product profitability, but it is just a rudimentary attempt for discussion and anybody who wants a copy can find it here.
. However this writing is not about my personal opinions, but a comparative analysis of market intelligence produced by our algorithms, based on customer generated content or Word of Mouth, and some additional external information sources that will be specified as I sight them.
Here is the scale legend for better understanding of the report.
