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.

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 Dreker, 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.

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).

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.

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!