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”.

Provide a venue and build a relationship

Is your product or brand associated with a social media website? A user forum? A company blog? Leverage the sense of anonymity an online forum offers. Encourage active participation with polls, surveys, and “The Most Burning Question?” submissions. When have you ever had the opportunity to so cost-effectively talk to a customer on a one-to-one basis? There is overhead in terms of administrative time but the benefits will more than likely outweigh the costs. If you offer and initially promise participation of management; keep your word! If someone posts a comment, make certain someone in authority quickly responds with more than just a robotic thank you. You don’t have to agree with comments but, you do have to prove you have read them!

Post surveys and polls about your product to encourage participation

Make certain you clearly state when and where results will be published. See if anyone is paying attention. When posting results of your surveys and polls, use the interest generated to ask visitors to respond to either another poll or a sign up email list. Give information before you ask for a name and an email address. Remember that negative criticism more often than not is more valuable than praise and fearless publishing it is a mark of transparency (good management) and character.

Grow your brand and tell people about it

Developing name and “brand” recognition by “spreading it horizontally” into collateral areas in your geographic community, on the websites and forums of colleagues AND competitors in your industry, and, most important, in your “virtual business niche”. Consider providing “expert”answers on public forums. Offer charitable donations both in your local physical world as well as in cyberspace. Charity builds your persona, your online reputation, and your brand recognition. Telling your customers about your charity is not blatant self-promotion; it can be a public announcement.

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

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!

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.

Let’s consider the historical warning signs of this phenomenon.  For years to reach 50 millions users:  it took Radio 38 Years, TV-13 Years, Internet – 4 Years, iPod – 3 Years and Facebook added 100 million users in less than 9 month.  IPhone applications hit 1 billion in 9 months.

What force is driving this huge wave of information that is rapidly stretching out and putting television, radio and print media to shame?  While viewing Eric Qualman’s video on Social Media Revolution, it become more obvious to me that Social Media is not only lending to buyer behavior, it is more or less dictating buyer activities.

The statistics are astounding and these hundreds of million users say they prefer to view a peer recommendation over traditional advertising.  According to Facebook, only 14% of their users trust traditional advertisements.  Savvy shoppers are no longer going into the marketplace without delving into the social ranks for assistance. Unless a product also has social support riding on the surge of information, it could become dead in the water.

Moreover, consider the effects this movement is having on American institutions such as the US Postal Service and newspaper industry as a whole.  Items such as news and mail are finding us, where the need to “wait” on the 5 o’clock news is passé for generations across the board.  Joe Puzilli once said ‘we are seeing nothing less than a tsunami affecting business of every size’ in reference to Social Media.  The Mom & Pop businesses that won the battles against big business may now lose the war if they don’t pay attention and defend themselves within Social Networks.

A remarkable platform has emerged allowing you to engage in conversation with your customers.  No longer can you simply sell your products straight away without building a relationship with buyers.  If you are not using these social mediums to listen to consumers, build your brand and increase sales you are falling way behind.  Socialnomics may compel us to action as in the self-help quote “Don’t wait for your ship to come in, swim out to meet it.”

Recently I’ve been reading various articles on brand building strategies and it has been a good review of the basic principals of marketing. The usual discussions are typically about the importance of planning the best marketing strategy.

One of the hottest topics on the internet today is SMM (Social Media Marketing).  Questions are being raised about the role of social media on the infamous 4P’s of marketing.  I think we still have to address Product, Price, Place & Promotion; however, there’s a new sheriff in town and Reputation is his middle name.  Consumers have participated in surveys for decades, but social media is now defining many product’s brand image.

Many companies are looking for ways to harness the power of social media in hopes of building a positive image for their products.  It seems that lack of strategy has been a hindrance for most.  We all know that customer reviews and feedback to our company’s website is a good source for ideas to improve our products.  It’s no surprise successful companies like Pure Digital and Bose use them to monitor and measure their products’ reputation and improve processes based on these findings.

The majority of today’s major companies are now focusing on the importance of social media marketing trends.  It seems that many product manufacturers are also experimenting with ways to exploit it for their own benefit.   Are any of them finding ways to measure social media’s strategic impact on brand value?  I actually wonder if any of them really understand what to do with any of it.

Does collecting bits of data from what all is being “said” without a plan to convert them into action make it worth the effort?  The use of a well developed process to consistently measure your product’s reputation across the consumer market may perhaps prove to be invaluable.

Taking on the challenge with great success, we use raw data from customer reviews and feedback on various social mediums to measure the gap between customer expectations and  their actual experiences with specific products.   Reflecting on functionality, reliability and product support, these metrics provide crucial information that could allow you to increase profitability as well as develop lucrative niche markets.

Successful marketing involves everything that leads to increased sales.  Realizing that social media is defining the reputation (i.e brand/product perception by it’s customer) for nearly every product on today’s market, you should definitely take advantage of this innovative marketing tool.

Functionality:

There are multiple “channels” by which an interest in buying a product creeps into our mind, but it is often a desire to experience functions and features of this product, and a promise of making our lives better, that makes us consider to part with our money. Hence if our expectations are not met by actual product experience, we often feel cheated and express dissatisfaction with the product. Sometimes it’s caused by actual and intentional misrepresentation of a product’s functionality, but more often it is misinterpretation of marketing messages associated with the product by a Customer.

Reliability:

No person decides to purchase a product expecting it to be “dead on arrival”, but it happens more often than you think. There is no way to know what is the expectation of every Customer for longevity of a product, but I can bet  that at a minimum it is at least 1 day longer that the length of the product’s warranty.  However, longevity is only one parameter of the Customer Reliability expectation. The other one is availability of the product for use or experience. Consider an example where a product breaks (i.e. is not available for use) during its reasonable life expectancy, and the Customer has to send it in for replacement or repair. Even more troubling are the instances when the loss of use is accompanied by associated damages or losses of perishable products, data, reputation or business opportunities, etc.

I consider Reliability reputation the single most important factor in my personal purchasing decisions as a failure to consider it very carefully can result in the most damage and unhappiness.

Support:

While there are ambiguities of Customer misinterpretations of Functionality messages, and a factor of Customer inexperience that may lead to negative Reliability experiences, there is no excuse for creating negative Support experiences. A Customer, rightfully, expects delivery at the stated time, respect for promised exchange and refund policies, and most importantly knowledgeable help from people who are genuinely interested in helping out. Unfortunately many companies treat Customer Support as the cost factor to be reduced, instead of an opportunity to learn and correct potential shortcomings in the product’s design and its messaging. This unwise strategy leads to commoditization of their markets, destruction of their brand value and profit margins as the Customer starts to look at their products as “disposable”.

Reputation is one of the most valuable assets of any company – It takes significant time and effort to build a good reputation.  Great company reputation provides an opportunity for higher profit margins, as trust in your product improves, and allows less discounting and advertising expense compared to less reputable competition.

Higher sales becomes a result of Confidence in your product’s quality, reliability and support – as opposed to its price.

The only way to build Reputation is to provide your Customers with Experiences that consistently exceed their Expectations.

I’d love to get my hands on data for comparative analysis of the resources required to design remarkable products vs marketing ordinary ones.

Robert Stephens, the founder of Geek Squad that was acquired by Best Buy, reportedly said that “Advertising is the tax you pay for being unremarkable.” Given the choice, I would always select voluntary taxation such as consumption/sales taxes and/or lottery instead of mandatory, regressive income taxes, however, the governments have the luxury to extract both and don’t give us much room for choice.  The reasons companies elect to pay an “advertising tax”, that often reaches 30% of retail price, is because we, the Customers, pay it.

I do realize that advertising is only a part of the marketing budget, and wonder what role the rest of the marketing organization play in maintaining competition based on the price per feature strategy.  How much do marketers know what their Customers think about the product they purchased? Have they realized the value they were expecting? If not, what is the best way to close this gap?

Standard Deviation of Average Headphone Reputation.

Based on 64,601 Customer Reviews published before January 26, 2010

When you exceed Customer expectations, just unobtrusively help them to share their experience as much as possible. At this point all they really need is a really tall soapbox.

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:

PRMIR – Deviation of Reliability Reputation scores for the Docking Station Product Category

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.

I need more examples of business processes where product managers have to “translate” data into “information” that suggest action.

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.