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Posts tagged with ‘Apple’

Voice of Customers Challenge to Product Managers

VoC challenge to PMFor years I have been puzzled by the fierce resistance of product managers to integrate customers feedback into the products’ design and marketing process. Surely, many use elaborate survey and market focus group studies to validate and refine an original concept, but the use of the feedback to form an original concept is widely sneered upon as a fool’s errand.

Many practitioners are convinced that customers do not know what they want, until they experience a remarkable product they cannot live without. While there is some truth in the belief that customers cannot articulate their latent needs, it doesn’t mean they have nothing to contribute to the process of conceptual design. Product managers, who rely on their own vision, like to quote Henry Ford “If I’d asked my customers what they wanted, they’d have said a faster horse” without realizing that he never uttered those words. Meanwhile the dependence on Divine Intervention, i.e. visions of product managers, results in very high product failure rates and is a luxury fewer companies are willing to gamble on.

There are two basic reasons why customer feedback as source of inspiration is commonly rejected:

  1. Marketing Research proved to be very ineffective in the past in identifying truly original product opportunities. For many product marketers it offered a convenient excuse to throw the proverbial baby out with the bath water. However, the few who have learned that “The job, not the customer, is the fundamental unit of analysis for a marketer who hopes to develop products that customers will buy” – Clayton Christensen, experienced consistent improvement in bringing successful products to markets. In other words, research into the experiences of customers, who use currently existing products, will discover original product opportunities – not the research into product’s features and functions, customer personas and market sizing. The core question is why did customers buy it in the first place, i.e. what do they hope to achieve by using it?


  1. The traditional approach to the management of customer feedback is an analysis of what customers say, or how they feel, about your product and/or products offered by your competitors. However, analysis is only the first step of gaining an insight.


The terms “Voice of Customer” or “Customer Feedback” in this context do not include structured data compiled from closed ended survey questions. The response to such a question cannot help to discover a latent need, it can only validate one that was previously discovered. This discovery can only be done by a synthesis of previously analyzed open form feedback, such as unstructured commentary or review. As customers share their experience of currently available products, they often use different words and expressions to describe common frustrations or delights. It is not a trivial task to understand the specifics of their frustrations and to interpret this understanding into new product requirements, i.e. synthesis.


There are many tools available today to collect, aggregate and analyze customer feedback. The science of this process is well defined and commonly utilized. There are some capable technologies available for detailed analysis of unstructured feedback, even though they are not yet as easily productized and applied. However, the art of synthesis and translation is the domain of creative product practitioners that rely on data instead of vision.

The “Agile” Approach to Consumer Product Marketing

When process succedsThe term Agile is most familiar to people involved with software development, but the basic concepts can be applied to consumer products successfully as well. At least two of its core principals – use of iterations and collaborative involvement of product users (i.e. customers) – were effectively practiced years before the term was introduced and became commonly accepted.

Wide acceptance of Agile methodologies arguably resulted in dramatic increases in software project’s ROI caused by:

  • reduction in the number of abandoned projects
  • cost reduction for user training and documentation
  • increase in user adoption of the “final” product

In other words, the application of Agile methodologies reduces the uncertainties of delivering an expected outcome.

Development of software to simplify business user’s jobs, has at least one critical similarity to the development of many consumer products – customers cannot clearly articulate their requirements. Particularly, the latent ones. Of course there are tools to help you do this, Kano analysis, being one of the most popular. Unfortunately, not enough consumer product marketing professionals are known to use these tools. That manifests itself in a very high failure rate of bringing consumer products to market. The actual rates of consumer product failure are quoted anywhere from 30% to 80%. The numbers vary by industry and are controversial because they do not clearly articulate what “failure” means. I define a product “failure” when it did not deliver the originally forecasted revenue.

Accenture research estimates that the CE (consumer electronics) industry alone has spent $16.7 billion a year to “receive, assess, repair, re-box, restock and resell returned merchandise.” More than two thirds of these costs, or $11.2 billion, are characterized as No Trouble Found (NTF). In other words, the products did not meet the customer’s expectations. Personally, I find the term NTF very disturbing – $11 billion waste caused by poor market requirement definitions and misleading advertising, is indeed a big trouble. That number does not include the cost of the customers time wasted, hit to the brand reputation and environmental costs of transporting and stuffing landfills with failed products and packaging.

The cause of the CE product NTF fail is relatively easy to diagnose – too many products are conceived by engineers who value the “cool” factor the most, without any reference to actual customer needs. That approach worked well while the price and advertising were the most critical factors in customers  purchase decisions. The last few years have seen a dramatic increase in the importance of customer experience delivery as the most influential factor in selecting a product.  The revenue growth of the leaders (Apple and Samsung) are cooling down, while the rest of the CE companies are seeing a drop in revenue and profit contraction.

Meanwhile, there is some evidence that small “un-brand manufacturers” are doing well by practicing “Agile” – looking methods to capture market share from the established brands.

  1. They “collaborate” with the customers of their competitors by analyzing product reviews they published online. They learn what caused these products to fall short of their customers’ expectations and why they purchased these products on the first place;
  2. They design products based on the results of that “collaboration” and their interpretation of consumer needs.
  3. They manufacture small lots of products to test the accuracy of their interpretation, market reaction and analysis of the feedback before going to the next “iteration”;
  4. They form customers’ expectations by “communicating” the product properties with the language used by customers to describe their experience.

“Agile” product marketing is a better approach when scale of design and manufacturing does not work anymore. It is not “cool” that sells your products today, it’s the experience your company delivers to the people who buy them.


Short update on the experience of smartphone customers

Some long time readers of our blog will remember extensive posts dedicated to market intelligence of customer experience with smartphones. Smartphone customers are one the most active social communities. That means they often share their rich and plentiful factual experiences with phones they buy, for the benefit of consumers at large. We, at Amplified Analytics, are very grateful to this and other active communities both as consumers and as opinion mining technologists. Their content contributions enabled us to train and optimize our software over the years. As our technology became more mature and stable, we shifted the subjects of our posts from what kind of social marketing intelligence can be mined to how such intelligence can be leveraged to achieve better business results. However, some of our readers keep asking for updates about the smartphone market changes, and this post is a very brief snapshot of flagship models experience only.

For this update we have mined reviews published by 12,062 customers and measured 40,249 distinct opinions about a variety of specific attributes of their experience. Reliability is the most “important” attribute of customer experience for smartphone users.

Smartphone CX-Reliability


According to these customers, Samsung Galaxy S5 is 20% more reliable than the average phone of this group. Nokia Lumia 1020 is the least reliable of this group. These numbers are the aggregate measurements from the time these phones became available to consumers.

Overall Usability is the second most important attribute of CX for these smartphone customers. Apple iPhone 5S is at the top of the “class”.

Smartphone CX Usability













Since I promised to keep it short, I will stop with the details here and offer a combined picture in the screen shot below.

Smartphone flagship MI update

Click  here to request access to this interactive dashboard, including insights into customer experience with these phones. If you are a consumer, interested in other models, please follow this link to the CX backed recommendation site. If you are a marketer, interested in customer experience market intelligence related to your products or brands, please request info about custom reports and pricing.



High Tide Does Not Raise All Boats Equally

This new research examines the relationship between Customer Experience (measured in social NPS®) and brand market share changes in a rapidly growing market, such as smartphones.Apple diversion

The Tide Comes In

The quarter over quarter growth of the smartphones market peaked at 20% during 4Q12, while market share of Apple, the company  that arguably created this market, declined during the first 3 quarters of the year.  Dramatic growth in holiday-driven demand finally lifted Apple’s market share in 4Q12 to catch up with the overall growth of the market, but it started to lose pace during the very next quarter, and have never recovered yet. Now, Gartner, IDC and others are forecasting a slowdown in the growth of the smartphone market.

What made Apple’s market share growth stumble and what are its chances to right this “boat” going forward?

Apple’s Bump

Apple share and NPS

Looking at the same time period from the Customer Experience perspective, it is easy to notice the dramatic drop in Apple’s social NPS® score in the quarter preceding the diversion. Since I could not find smartphone market share data prior to 4Q11

in Gartner archives, it is not clear in which calendar period the diversion started to form.  However, the Customer Experience measurements have never recovered to the last high reading of NPS=12, reached during 4Q11 after two deep declines that coincide with 3 quarters of diversion.

Apple NPS composition It is possible that recovery from the low point was triggered by the introduction of a new model, as Apple usually does around Q3 every year. I’ll leave this speculation to the Apple watchers who are more familiar with their product launch schedules and general public sentiments associated with these events.

Samsung’s Slump

Samsung’s scenario is more challenging because of the number of different models available on to consumers at the same time periods. While some Samsung models registered very low customer experience scores, the aggregate social NPS® is impressively high.Considering that Samsung’s market share is over 30%, it is not surprising that quarterly changes of the base are relatively Samsung M share change and NPSsmall. The chart does display a startling diversion from the smartphone market chart during 2012 holiday shopping period. During that quarter Samsung market share dropped 4% while overall market growth picked at 21%.Perhaps it is not coincidental that social the NPS score of Samsung smartphones experienced a dramatic drop during preceding quarter – the same quarter Apple registered the lowest NPS score.  During 4Q12 Apple market share bounced dramatically to take leadership from Samsung for just one quarter before resuming its slide.

Customer Experience Analysis and Forecasting

Perhaps consumers discovered that the two market leaders are not the only game in town, and the smaller brands had a better reputation of customer experience at that period.  Unfortunately I was not able to find market share data for HTC, Motorola or Nokia to test this hypothesis and LG had their own drop during that quarter. Therefore, the others must have been the beneficiary of the market share bump.

One of the most interesting findings is an apparent correlation between NPS and Market Share changes (quarter over quarter). The NPS highs and lows precede market share changes highs and lows by a quarter at least 4 times out of six quarters observed. If this pattern holds, then Samsung is likely to have an excellent 4Q13.

I do not want to imply that patterns and correlations automatically produce predictions, but when they are observed repeatedly and consistently, they can substantially improve our forecasting abilities.

Methodology and Data Sources

  • The market share data is borrowed from Gartner quarterly reports, and the smartphone data became available 1Q12. The social NPS® data is produced by Amplified Analytics opinion mining of customer reviews published online.
  • No survey, questionnaire or any other form of solicitation was used to gather the content. Only unsolicited content, generated by customers of specific smartphones models and published by them online were cached and used for this analysis. Subsequently model specific social NPS® information was aggregated by brand to align with the market share data available publically.
  • The content from 46,597 unique customers of Apple and Samsung smartphones was analyzed with help of Social NPS® On-Demand Monitor.
NPS, Net Promoter, and Net Promoter Score are registered trademarks of Satmetrix Systems, Inc., Bain & Company and Fred Reichheld.

©2013-2014 Amplified Analytics Inc.


The root of all great products

The root of all great productsGreat products come from a deep understanding of customers’ needs and wants. Such understanding is best formed by observation of customers using a product. Hence, the proverbial chicken/egg situation – a product that has not yet been developed cannot be observed.

One way to deal with this challenge is to start by identifying a “job” the customers of your future product needs to do. As Theodore Levitt observed,

“People don’t want to buy a quarter-inch drill; they want a quarter-inch hole.”

Therefore, a savvy product marketing professional can observe people doing the job with whatever tools (i.e. products) are available to them currently. A keen observation will likely reveal an opportunity for improving the customer’s job, i.e. simplifying the customer’s experience of obtaining the desired outcome.  This approach is championed by Clayton Christensen in his book The innovator’s solution: creating and sustaining successful growth.

Observing customers in the process of using products is not a new concept, and it is known as ethnographic research. However, it is primarily used for learning how to enhance existing products, not to improve customer job experience. The cost of ethnographic research is very high and that forces very limited scope and data samples which would be unlikely to help discover a market segment deficiency of unmet customer needs. That ocean is too big to boil by means of ethnographic research.

The latest developments in big data and opinion mining technologies, combined with growing availability of customer experience testaments available online, offer new opportunities for uncovering unmet customer needs on a market scale. However, there are no widely accepted methodologies available to take advantage of these developments just yet.

The remaining challenges involve:

  •  A market segmentation approach that identifies a job by expanding the view of competition from the products on the same shelf to any product or service that customers could deploy to get this job done. Traditional segmentation methods are based on the assumption that your customers are defined by the demographic group they belong to. Some use a secondary qualifier of buyer persona to refine the target segments. These methods worked reasonably well in the age of mass markets and clever advertising campaigns, before the rise of the social customer. Today we do have the data and tools enabling us to learn who are the customers that purchased products like this and how they experienced them. We can even map them back to the demographics and persona profiles which can provide much better understanding of their real needs.
  • Rigorous data governance methodology is focused on real customers and real communications. Higher volume and velocity of data does not translate directly into market intelligence that is capable of driving business decisions. It often creates even more noise at greater expense and results that are not relevant to business reality. We have to discriminate between endless repetition of mindless remarks by ambiguous digital entities and unique descriptions of real customers’ experiences with specific products or services. We should re-focus from inclusivity of content data sources to exclusivity of authentic content.

Please click here to request the iPod case study that illustrates this process.

A Product is Only a Part of Customer Experience

It is only a matter of time and success rate, before competition will re-engineer the functionality of your new product or service and bring to the market a newer, shinier, and more affordable offering.  When that happens your market share growth stumbles and starts to decline, price pressure starts to erode profit margin, and your brand becomes an also-ran instead of a leader. It is a much more complicated undertaking to re-engineer customer experience, but it can happen too if you don’t pay attention to the market landscape. Let me offer a couple examples:

  1. Dyson introduced to the market easily maneuverable vacuum cleaners that offered revolutionary design, much more functionality (“appropriate amount of suction”), and panache advertising messaging for a premium price. Its inventor was knighted (Sir James Dyson) and became a celebrity. However, after a few years of Dyson leading their segment of the market and winning patent battles against “wannabe” competitors, Euro-Pro came out with Shark vacuum models that performed as well or better at the lower price than Dyson. As a former customer of Dyson, I cannot re-call anything special about my experience of owning their product.

Dyson CX report The best part of it was the experience of being a Bed, Bath and Beyond customer—and that is where I bought my new Shark at the half of the Dyson’s vacuum price. Dyson vs Shark Now, Hoover and others are coming to market with comparable products that force Dyson to bring lower priced models.   2. A more controversial example involves a “religious” icon – the iPhone. Once a gift of elegance and simplicity, it used to be the gold standard in a product category it arguably created. The committed base of Apple fans, standing in line for days to get their hands on a new model, propelled iPhone consumer expectations for customer experience to previously unseen heights. While iPhone dominated the market for early adopters of technology, mass market participants failed to see an overwhelming difference in experience between iOS and Android products that would justify the price deferential and high expectations. Even the latest flagship model (5S) continues the pattern of disappointment with Customer Support. iPhones Market Intelligence analysis And while iPhone 5S leads the segment (flagship models) today with social NPS® score 53, it is below HTC One in terms of reliability (19% above average), and below Samsung Galaxy S4 in terms of audio experience, design and video quality (23%, 34% and 15% above average respectively). It is not surprising that iPhone market share is shrinking from quarter to quarter.

”The iPhone’s share of the smartphone market peaked at nearly 24% in the holiday quarter of 2011, according to research firm Gartner. But Apple’s share dropped to 21% the next holiday season, and again to 14% last quarter. Android dominates the market with a 79% share.”

The loss of market share is not caused by Apple’s failure to bring a quality product to the market. It is caused by Apple’s failure to live up to expectations of customer experience it has created.


As functions and features of products become more commoditized, the holistic customer experience of dealing with your brand becomes the real differentiator in the market place. It cannot easily be infringed upon, reverse engineered, or acquired by competitors. And if you embrace customer centricity as a long-term strategy for your brand management, the customers will embrace your brand as the first and only choice for them.

A Case for Simplicity Marketing

According to the authors of very popular series of blogs “What Do Consumers Really Want? Simplicity” published recently on Harvard Business Reviews site:

“Consumers are overwhelmed by the volume of choice and information they’re exposed to, and marketers’ relentless efforts to “engage” with them.”

Simplicity is NOT limitation of choices. In fact, the complexity of offers often tends to mask the fact that multiple offerings are not really different from each other. Marketing noise overloads consumers’ cognitive capabilities and drives them to alternative sources of information to help them make purchasing decisions. That undermines the purpose of marketing communications and diminishes quality of overall Customer Experience. The customer satisfaction scores often reflect that.

We all read news earlier this year of Samsung overtaking Apple as the largest manufacturer of smart phones; however, the latest American Customer Satisfaction Index survey still finds Apple iPhone customers to be much more satisfied than any other smart phone customers. It is interesting to note that our own Customer Intelligence research shows that

” Apple 4S satisfaction has really jumped 12% with retirement of iPhone 4.”

while only one Samsung model out of dozens, marketed at that period (Q1 2012), earned similar accolades from their purchasers. How many of you heard about Infuse?

The question is, why does Samsung (and other companies) make it so complicated for consumers to choose their products? If product specifications differences are so important, why are there thousands of consumers searching the Internet with inquiries like “which smart phone should I get iPhone or XYZ?”?

One may say that these questions are not relevant anymore since Apple’s lock on the smart phone  market was broken. I would like to suggest that the number of units sold does not automatically translate into profitability. Customer satisfaction much more closely correlates with higher margins. Samsung has to subsidize carriers to sell their phones, while the same carriers have to subsidize Apple for privilege of selling  iPhones.

“It is unrealistic for any company, even Apple, to hold 100% of any market. The iPhone will never have majority share. It does not have to. What matters is profit share, and that is where Apple is winning. Apple earns73% of the cell phone industry’s profits with just 8.8% market share. “

This is just an example of a simple choice vs traditional approach to marketing, and it is not limited to smart headset market. Consumers do not buy technical specifications, feature sets or functions – that is what your engineers sell.

According to Peter Drucker

“The customer rarely buys what the company thinks it is selling him.”

He also famously said

The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself… The aim of marketing is to make selling superfluous.”

It appears that the marketing profession forgot its purpose, and instead of hearing what customers want to buy, they prefer to shout what they should buy, in marketing’s opinion that is.



Musing on difference between successful product & innovation

The discussions on importance of innovation are all over Social Media. The calls for innovating ourselves out from the current economic malaise are coming from the President of Consumer Electronics Association to the President of the United States. In the words of Louis XIV (or was it Mel Brooks?) – “It’s good to be the King!” – for the rest of us it would be helpful to put some definitions around these terms. I do not pretend to be an expert on the subject of innovation, but I like to be specific and want to offer some ideas for discussion.

So what differentiate commercially successful product or service from the innovation?

I would like to propose that successful products gain market traction, meet their sales forecasts and generate anticipated profit margins.  Innovative products re-shape the market place, create new categories, and generate blockbusting profits. Innovative products successfully defeat the competitors’ assaults for long periods of time.

Development and introduction of successful products or services is a very challenging and risky endeavor, as we are well aware.

The Recent Portfolio Management Benchmark Survey sponsored by Planview, reported that only 52.3% of products meet with commercial success, while 21.2% were “killed prior to launch”.  They did not specify the type of products or industries covered by this survey, but my personal experience pegs the success ratio well under 40% mark.

The risk level for innovation is even higher. It is estimated that only 1 out 3,000 new innovative ideas becomes a commercial success. We also know that most innovative products rarely have anything to do with technological inventions, but have everything to do with the scale of market adoption. Peter Druker, the father of modern Management Science, wrote in his book “Innovation and Entrepreneurship”, that a 15 year “gestation” period is the average time observed between the time of an original invention and the time of its commercial realization.

We all know examples of such innovations as Ford T, Microsoft Word, iPod and iPad to name a few that dominated and still dominate their product categories. These are very different products, however the thought process, methods and techniques of the people who are behind the creation of these products, are a mystery we want to discover.

I would like to propose that the key difference between really good Product Managers and the Innovators is in a way they perceive and understand the markets they target.

While a Product Manager segments the markets in terms of demographics or personae for which they develop a product, an Innovator is focused on the Customer Experience of people, who struggle to use existing products to do their chores, and interprets these struggles into the definition of innovative vision for new generation products.

In other words they concentrate on improvement of EXPERIENCE as oppose to improvement of a PRODUCT.

Apple iPad 2 camera is eroding its reputation

The tablets market segment is fun to watch. While there is no doubt that Apple “owns” the segment it is interesting to note that it has the lowest satisfaction score compared to the competition.

Given the enthusiasm of Apple fans and popularity of the original iPad, I wonder if the bar was set too high for many iPad 2 purchasers. Digging deeper into the details of Customer Experiences we can see that a lot of negative comments are focused on quality of the camera embedded into the tablet.

Indeed the “focused” listening provides specific metrics that show difference between customer expectations and their actual experience with this attribute of Customer Experience.

The analysis shows that Blackberry Playbook is a clear leader when it comes to Customer Experience with picture quality. Considering widely held belief (which I do not share) that Apple does not do market research it would be interesting to see if they address the camera/picture quality issue in the next edition of this popular product.

We used Opinion Miner® software to analyze 1,103 customer generated reviews, published online before May, 29 2011, of the tablets listed above to generate these findings. The scores are calculated to the two point scale from 0 (unacceptable) to 2 (delighted) with 1=100% satisfied (i.e. experience matches expectations).


Does Apple tell the truth?

I was watching TV and an Apple commercial came on mocking PCs and the Windows 7 Operating system, claiming that their machines are No1 in terms of Customer satisfaction. I decided to verify this claim using our Product Reputation Market Intelligence Reporter, still under construction. Apple lies

I filtered out 3 laptops that enjoy the highest reputation in terms of Customer satisfaction out of 123 laptops in our data base, based on Customer Reviews, and the data suggests that Apple does in fact tell the truth. Congratulations Apple!