Posts Tagged ‘innovation’

Social Media

In the old days, people relied mostly on products and services. Advertising didn’t exist back then, it was just as simple as putting a plank with your name and your occupation on your door or outside your gate. Nobody would see the plank unless they passed by your house or store. The business rule was very simple, if you have good products or services, then your happy customers will tell their friends, and if they were satisfied, then they will tell their friends and so on and so forth. Until now, we still found Word Of Mouth (WOM) marketing to be the most powerful tool every marketer should utilize. However, maintaining positive WOM is extremely difficult, since the expectation is always getting higher and higher so there has to be continuous improvement on the products’ or services’ side.

Then radio was invented and soon after, the television. Advertising as one dominant type of marketing communication became too strong. Small companies suddenly had national brands because they started selling their products in a massive way all over the country or even the world. Brand image suddenly become THE MOST important thing in marketing. Companies would do anything to defend their brands, they lied, cheated, even said negative thing about their competitors. As I have said before, they’d do anything to make their brands look good.

Then there’s the era of consumer power, where suddenly the market became so saturated with advertising, that customers became confused and started to come to their senses. They just want products that work and fit within their budget.  Marketers started panicking and scream that Advertising is Dead, Sales is Dead, etc. Of course they’re dead, advertising and sales are mostly one way communication, it’s how companies are pushing their products to the customers. Customers eventually have to make their choice based on their limited budget. The competitions then reached its peak and escalated into a price war. Who wins the war? Customers for sure, a lot of big bulk retailers that sells high volume at small margins and a few niche players.

Within the last 3 years, the social media has stolen the spotlight. Companies are flocking to use the new media to reach millions of (potential) customers. Social media specialists suddenly are in high demand. Despite all the hype, these companies keep forgetting that social media is not another type of advertising they thought they knew and will never be one.  Most companies use social media (i.e. Twitter, Facebook, LinkedIn, etc.) and blogs as a form of one-way communication. Although they have done a great job of making it looks interactive, they hardly read their customers’ comment, and deleted the negative comments as if there is nothing worth improving. They are creating a narcissistic “faux-brand-image” where they always look perfect and everybody’s always so happy.  Those companies do not realize that those unsatisfied customers will never go away, because they have been using their personal blogs or any other media (facebook, twitter, etc) to express their disappointment and frustration.

As for me, I am a traditional marketer who believes that everything is about innovation and continuous improvement of products and services. Advertising, updates, tweets, blogs and everything else is secondary. The best example that I can use probably is to compare Apple and RIM. Apple always come up with disruptive technologies that upset the competition, while RIM (who used to be very innovative) prefers to use its current proprietary Blackberry Messaging technology. iPad is definitely not the first tablet computer in the world, but in people’s mind, iPad is ultimate tablet computer because of its intuitive touch technology. On the other hand, despite how much money RIM had invested in product development, PlayBook will never be regarded as an innovative product, since people will always see it as just another iPad clone.

It really doesn’t matter how much budget  your company has allocated to hire the best social media specialists to exploit the potential of social media and other internet-based technology, I still believe in the power of Word of Mouth Marketing (WOM) because in the end, everything will come down to this: IF YOUR CUSTOMERS WON’T RECOMMEND YOU TO THEIR FRIENDS, THAT MEANS YOUR PRODUCTS OR SERVICES STINK! (PW)

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Have you ever wonder why very expensive and popular software can be very user-unfriendly and might have a lot of bugs? What about a big and profitable company that has very bad customer service? Yes, they are very common. We see and experience them almost on a daily basis. In an ideal world, very expensive software should be user friendly and bug-free, and a big and profitable company should have good customer service.

So what’s the main issue here? When a company was still small, it usually imitates bigger companies, and when it gets bigger, it tends to compete directly competitors with comparable size. The only different between them are the budget limit. Small companies might just have enough budgets to follow the bigger companies, while big companies can afford to hire people to spy on their competitors and analyze them. So what’s missing?

Most of companies are missing the big picture. Products and services are meant to solve problems for customers. Customers are the ones with the final decision to buy or not to buy. No purchase means no profit, it’s that simple. The only thing that every company should focus on is to make them satisfied and coming back for more. With all these in mind, naturally customers should be the centre of innovation. The intimate relationship with customers will result in profits, loyalty, and innovation.

Customers as the source of ideas

First of all, we should realize that it is impossible to create a perfect product or service. If there’s one, then there is no need for substitutes because people would never buy them. IPhone, the best cell phone in the market, still has to compete with Nokia, Sony Ericsson and others alike for the same reason: it is just not perfect.

Secondly, customers are not perfectly rational human being; they are somehow erratic and illogical. People are also easy to confuse and forgetful. The level of irrationality between people also varies. I could buy a product purely because it has an emotional value, even though for some people it could be considered as worthless.

Thirdly, customers are not born equal. Some customers are easier to deal with than the others. The level of information that customers have and their capability to process that information also vary.

With these three main variables, it is very clear that every product in the market will have a chance to survive, as long as it is communicated in the right way and it meets the specific requirements determined by the right segment of customers. The best way to deal with this problem is to involve customers by getting their ideas and use them in the development process. Jeff Bezos, the founder of Amazon.com (July 2009) in a Business Week article titled “ The World’s Masters of Innovation” talked about his innovation philosophy: there’s no bad time to innovate. You should be doing it when times are good and when times are tough—and you want to be doing it around things that your customers care about.

How can we get ideas from our customers? The best place to look for ideas is from the customer complaints. As a product developer, this is the first place I would go, because there are tons of suggestions to think about and they should be prioritized because they will directly affect customer satisfaction, which eventually will lead to customer loyalty. If you can find out what your customers like or hate about your products or services, you will have something to improve upon.

In order to be more positive when listening to grouchy customers is the fact that they spent an amount of time and effort to file the complaints which means that they care about the products or services you are offering; therefore we should appreciate them accordingly.

There is no limit to what a company can innovate when it starts to listen to its customers. Remember, those customers might also use other products, so when they file their complaints, subconsciously they have compared your product to other available products in the market. Using their suggestion, a company can improve an existing product, expand a single product into a product line or create a totally new product line for a specific market segment. Of course, the strategy will be more comprehensive and effective if combined with other market and competitive analysis methods.

To conclude this article, I suggest every company should give more attention to customers in every stage or marketing cycle from pre-sales to post-sales. With superior customer service, a company will be able to enjoy sustainable profits driven by its customers’ loyalty, and get tons of ideas for innovation. If you implement this, you might be surprised to find out that your disgruntled customers might turn out to be your most valuable ones. PW

This article is published on Canadian Institute of Marketing newsletter Winter 2010 edition, volume 6, issue 1.

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