The Hub from Verizon

When the Hub was launched nine months ago, their press release claimed . . .

Only Verizon Wireless can launch a new touch screen home phone system designed to replace old-style home phones with a souped-up home communications system, bridging wireline and wireless connectivity in one simple service, that runs on any broadband connection – whether supplied by Verizon FiOS Internet or DSL or any other high-speed service provider.

Unfortunately, it was a bridge too late.

One of the biggest challenges for any company, especially one in a rapidly-evolving market, is bringing the right product at the right price to the market at the right time via the right channel.

Verizon’s Hub came to late to overcome these three factors:

• Lifestyle trends: Consumers are moving on, replacing landline service with mobile service at a rapid rate, often the result of a move.  The cohort behavior is even stronger.  Kids get mobile phone and phone number from a young age.  Once they leave college, they’re unlikely to  even consider landline service.  After all, their network of friends has their mobile phone number–their number, really–and isn’t that who their friends are trying to reach, the person, not a phone screwed to a wall in a house?
• Technological trends: Increasingly your mobile phone is more likely to be a smartphone, which means most of the capabilities of the Hub are with you wherever you go, without having to buy yet another device.  And your computer is more likely to be a laptop with a wireless connection, giving you some of the functions of the Hub along with convenient data entry and display without additional equipment.
• Consumer behavior: The Hub, a shiny new technology gadget, is most likely to appeal to early adopters, who are just the folks who are dropping their landline and using smartphones.   And for the rest, the Hub wasn’t sufficiently compelling to overcome the headaches associated with integrating it into their network and their life.

Verizon is to be commended for killing the product so soon after they launched it.

The current issue of WIRED has a great article on Netflix and the several attempts they made, starting in 2000, to create and launch a movie downloading or streaming service.  It’s a story of envisioning the future, leading a group to help create it, and killing or spinning off the effort when they believed that what they were building wasn’t sufficiently compelling.

The surprising finding, as shown in the first chart below: Not the importance of reviews or the popularity of social media–Facebook, Twitter, and the like–but the very low use of the old fashioned suggestion box.  Of those companies surveyed, only 1 in 5 has a way for people to directly make suggestions and fully 1 in 3 have no plans to add this capability in the future.  By contrast, more than 8 out of 10 have a Facebook fan page.

Now compare the expected or perceived impact on sales of social media tools with the impact of a suggestion box.  As the second chart shows, after product reviews (ranked first by 78% of respondents), the ability to supply product suggestions is thought to make a much larger contribution to sales than any of the social media tools: 41% versus 26% for Facebook Connect, 13% for a Facebook fan page, and 7% for Twitter.

Chart: Current and planned use of social media and other tools.

Chart: Social media's expected impact on sales.

What’s going on here?

Three things:

1. Keeping up: Social media is all the rage and has made the leap from tech-centric early adopters to broad adoption in society. And if the marketing folks haven’t already set something up, they’re prodded by executives who ask, “Do we have a Facebook for our company?”  (Yes, that’s the way they talk.)  Setting something up on Facebook is simple and fast, so in no time their company is using social media.  Voila!  Transformation!
2. Linking tactics to sales: In most organizations, there is no comprehensive way to link sales to marketing tactics.  (Web-based businesses have a much easier time of this than those companies sell through multiple channels.)
3. Really listening: Customers want to connect directly in meaningful ways with a company in order to get products and services that better meet their needs.

It’s this last driver that ties all of this together.

• Customer reviews: “Here’s what I think of the product/service I just bought from your company.”  And often, “I wish it . . . “
• Suggestion box: “Please make or change or do this . . .”

Facebook, Twitter, viral videos, forums, and blogs are vehicles for expressing those views.

Implications

Marketing is too often the implementation of tactics.  These survey results are a reminder that it’s the content of the communications and the intent of the parties involved that really matters.

Even marketers, in their heart of hearts, understand that customers want companies to listen to their concerns.

The never-ending challenge for marketers is getting their company to listen, and for senior executives, getting their company to respond.

…

Survey details: The e-tailing group/PowerReviews 1st Annual Community and Social Media Survey, September 2009.  (The slides are here, and oddly not on Slideshare, the social media site that has great tools for displaying, discussing, and embedding notable presentations.)

The home page of Organize.com, with selected types of navigation highlighted

Much has been written about designing website navigation, but Organize.com does an especially good job of showing the kind of helpful navigation that results when you think like your customers.

By understanding that there are different types of customers that will be looking for things in different ways, the designers have created navigation that gives buyers many ways to find what they’re looking for—in spite of the fact that the navigation groupings fly in the face of the some of the traditional ways that people have thought about navigation.

Three very different approaches (also highlighted in yellow in the screenshot):

• As seen in . . . — Navigation by magazine cover (with date).  The screenshot shows the expanded view that appears when you click on the link in the main nav.
• Organized by color
• Shop by brand

In addition, the designers have included a variety of other content categories, including . . .

• What’s New—By date, making it easy for frequent shoppers to zero in on the items recently added to the site.
• Video Library—By content format; a different way to engage buyers and stimulate interest in featured products.
• Eco-Friendly—By item material and construction, though more likely this works as a psychographic profile of a buyer segment.
• Clearance—By price (i.e., lowered); attracting the segment of shoppers interested in “a deal.”
• Mrs. Organized—By application, with a blog written by in-house and guest experts.

Along with As seen in . . . , these are all in the same navigation area, the brown tabs shown in the screenshot.  What’s the common element that would cause one to group these together?  None whatsoever, other than that these work in helping the many different types of buyers.

Other main navigation items include . . .

• Gifts and Occasions
• She—A category that includes The Career Girl, The Hostess, The Mommy, and others
• College
• Kitchen, Closet, Bath, Storage, Shelving, and other locations and applications

As above, there is no logical reason that these would be grouped together.

In other words, if a person were to go through the exercise of thinking, “What goes together?” you would never end up with these navigation groupings.  On the other hand, if you were to think, “Why might someone be coming to the site?” and “What are they trying to accomplish?” and “What factors are most important to them?” one might easily end up with top level navigation that includes As seen in . . . , Kitchen, and Eco-Friendly and Shop by Color.

It all comes down to thinking like a customer rather than as an information architect, or at least the way many information architects have approached this problem.

And what brought me to Organize.com?  Trying to match a tall white plastic bin purchased several years ago at The Container Store, earlier today I stopped into one of their stores and walked down every aisle looking for the item.  I didn’t see it, and asked a clerk.  She summoned other clerks, I described to them the size, shape, style, material, and color of the item—I hadn’t brought it with me—and they said that they didn’t think they carried it anymore.

At home, I looked at the bottom of the bin and saw the name of the manufacturer molded into the bottom.  A quick Google search brought me to Organize.com, where I clicked on Shop by Brand.  I selected the manufacturer and clicked on “View all” when I got to the manufacturer’s page, and then quickly scrolled through what would have otherwise been 46 pages of items and found that they do make the same bin, though in a slightly different shade of white.  Total elapsed time from the Google search?  About three minutes, thanks to the site’s helpful navigation.

(The Container Store’s site doesn’t include the shopping brand as a navigation choice; entering the name of the manufacturer in the search box on the site returns no results.)

A note about the IDEA Process

In work for Nokia, GameStop, and other clients we developed the IDEA process: Iterative Development, Evaluation, and Analysis, which is a process for creating site blueprints (including navigation and information architecture) based on in-depth sessions with users interacting with current and development sites to complete tasks.

The Boston Globe in somewhat happier times.

This confuses many things, including what is created (a news story) with the means and form of delivery (ink on paper tossed on to my porch every morning).

A recent post by Doc Searls discussed different technologies and models that may be developed to support new payment and subscriber models.

My comment, which appears below the post, follows:

Interesting discussion, as always.

Observations from someone who grew up in a two newspaper (a.m. and p.m.) household, has subscribed to the main city paper everywhere he’s lived, and who can’t imagine not opening two papers (the WSJ and now the Globe) every morning:

- It’s helpful to understand whether a comment or conversation is about what we would like to have happen or what we think will likely emerge in the market and be sustained over the intermediate- to long-term.

- Various technology-driven approaches that require a modification of consumer behavior will be suitable for the (relatively) small number of people who who choose to make the change.  Some mass media properties will try them; others won’t.  Whether they survive at all will be based on that competition and the resulting business models that each is able to establish.  There is no reason to believe that all newspapers (really, traditional print mass media organizations) will choose the same model.  And of course some niche print and online efforts will be supported by subscribers.

- Little of the discussion around the fate of print mass media has reflected an understanding of the various value-creating components and the way in which they serve different audiences.

In the case of newspapers, for example, there is less value than ever in the traditional physical, branded collection of journalists, editors, and advertisers.

When a plane lands in the Hudson and you want an an up-close view of what happened, you may find it in someone’s phone camera images posted on CNN.  For a follow-up report on bird strikes and the response of manufacturers, airlines, and the FAA, the authoritative source may very well be someone who writes exclusively about the aviation industry for a niche site/pub.  There is no value added by having, in this case, a Boston Globe reporter trying to cover all of that.  They may, however, get the first interview with Boston-based passengers when they land at Logan, and if they do, the audience for that piece may be much larger than the audience for the Globe.

Aside from the editorial page, for online readers there is less of a connection between hard news sources and a masthead than ever before.  (The NYT, WSJ, and a few other traditional print newspapers are probably also exceptions.)

- Online, one wants to have a curated (by one editor or a crowd or a search utility) list of the news that’s of interest and an easy way to follow particular stories from the “best” source, which may or may not be from the source that broke the story.

The ability to do that online with near-zero costs for the reader exposes the fact that the traditional print media business model has a cost structure that people no longer need to pay for.  And with alternatives that many readers see as hard to distinguish, they see no reason to pay the premium.

- Online advertising is a surprisingly elegant solution for paying for content creation, despite the distaste of some that such a grubby commercial venture as selling things should appear next to articles.  After all, for many media companies that are publicly-held, the goal is to deliver target readers to advertisers.  Compelling content is the way that’s done.  Online advertising provides tremendous precision around this, with the ability to connect reader with advertiser in ways that heretofore weren’t possible

The fact that advertising rates are much lower online than in print is a function of competition among online content creators/publishers.

Print rates will decrease further as the decision makers at traditional print buyers (advertisers and their agencies) continue to be replaced with younger individuals who have no ties (mentally, emotionally, or socially) to the traditional print media advertising infrastructure.

- We will have fewer full-time traditional journalists in the future, just as we have fewer TV repairmen than we used to have.

- And the role of technology in the evolution of the mass print media?  As opposed to innovation on the payment side, broad, lasting impact will likely be in continuing to drive down the cost and increase the quality of the tools journalists (however defined) use to gather and publish news, the ones readers use to sift/sort/track and comment/share/rate, and the ones advertisers and publishers use to match message/offer with individual.

]]> http://www.peopledesigntechnology.com/technology_and_newspapers/feed/ 1 http://www.peopledesigntechnology.com/misusing-market-research-in-assessing-the-demand-for-new-services/ http://www.peopledesigntechnology.com/misusing-market-research-in-assessing-the-demand-for-new-services/#comments Mon, 23 Mar 2009 16:41:26 +0000 Lee Wright http://www.peopledesigntechnology.com/?p=48 In response to an article reporting the findings of a recent global study by Accenture in which it was claimed that consumer market research showed “. . . 54 percent indicating their don’t want or need mobile video services:”

It wasn’t always this way, and it’s instructive to consider the underlying forces that drove this and the role of some of the Web’s largest companies in this evolution.

Buyer behavior today

Here’s the way in which I buy most things, which I imagine is similar to the approach of many others who buy a lot of different things online:

Determine the specific product I want—Read various review sites and read newsgroup posts, both through Google (google.com and groups.google.com).  To narrow this down, check Amazon and read the reviews there.  One of the things that Amazon has added that has been especially helpful is the information that notes, “People who shopped for this item also bought/viewed . . .”  This may add a product or two to my list to check out.

Ideally, find a unique product name or model number.

Find the low-price sellers—Enter this in to Froogle.  If I’ve already got a model number, such as for the Lutron dimming switches I recently purchased from “Beverly Hills Electronic,” this is where I start; no product shopping required.  (I use the Firefox browser with Google search built into the toolbar, which includes buttons for site search, search within discussion groups, and a Froogle search, which means that product search is available from every page.)

Rank the results from low to high, which is done with one click, and focus on those at the top of the list (i.e., those that are the cheapest).  Depending on the item, check eBay.

Assess the trade-offs for low-price seller—Look through the first few low price results for a retailer one recognizes. Check the “About us” and other information at the site to assess the degree of confidence in the merchant.  This includes their stated return policy and information from independent store rating services (if available).  Weigh whether the price difference between the cheapest and the next cheapest and is worth the difference in perceived risk? For example, is it worth saving $17 on a $300 item if that means I’d be buying it from a company that I’ve never heard of and who claims they have it in stock, versus from Outpost (a division of Fry’s) or buy.com or Amazon?

Because the Web enables anyone to put up a store front, the price competition is brutal, and since with many products the only thing you care about is price—you’ve already figured out what you want and there isn’t any after-sale service to consider—using a convenient shopping search engine such as Froogle increases the likelihood that you’re getting the best price possible.

It’s exactly this behavior that caused Yahoo to launch Yahoo stores and later drove Amazon to create their zShop program and their “sell yours” programs, and still later to purchase a small search technology company and invest in the additional development necessary to launch A9.

The new battleground

The battle now shifts to getting people to use “your” search engine.  Here are four ways in which this battle is being waged:

• Convenience: Building search into the toolbar.
• Ubiquity: Building it into the browser (MS).
• Pervasiveness: One form of this, though not specifically search, is Google’s gmail, which incorporates their Adwords ads, which are triggered by the context of the e-mail messages.  And we’ve all read about the work being done on hard drive search.  We’ll see something from Google soon that provides hard drive search and includes Adwords Ads in the results.
• Money: Amazon has created their “splitting the pi” financial inducement, which I think creates a perverse incentive for Amazon buyers to search for products outside of Amazon.

Special cases

• Travel—The travel aggregator sites have done an excellent job of making it much easier to find good prices on all aspects of travel.  On top of these have come new companies whose products search not only those sites but also the sites of some of the hoteliers that advertise that they have the guaranteed lowest rates and the specialty travel sites that offer last minute fairs, for example.  (Some of the aggregators have purchased or have deals with some of these, of course.)

• Repeated buying in one product category—In the case of someone who is buying the same type of thing over and over again, such as books, a specialty book store site or a few might be the only place one goes.

• eBay

Increasing returns to scale—One of the cornerstones of eBay’s success is the fact that they benefit from increasing returns to scale, which is essentially increasing returns to success.  In other words, the extent to which eBay is the largest auction site makes it more likely that someone listing or someone looking to buy via an auction will go there first, which puts them even further ahead of their next largest competitor.  As this process continues eBay becomes even larger.

eBay recognized the opportunity with merchant stores—The result of the four factors above is that you’ve got to search eBay separately. EBay recognized the opportunity that this created. Specifically, that enabling merchants to build out their own “stores” within eBay created an opportunity for eBay to make even more money because stores would be exposed to traffic that might not find them through searches on the general Web or shopping searches.

In the US, the game is over and one doesn’t even remember that there once were other auction sites of any size. This isn’t the case in many other countries, and eBay has had to acquire the dominant players in those countries for this very reason that it’s extremely difficult to catch up if you’re small and your competitor is big. In other markets where the two (typically) competitors are close to being the same size, they’re locked in intense competition to emerge as the dominant marketplace in that country, and once one pulls ahead by any significant degree, the dynamics noted above will really kick in. In the case of other merchants, while there may be increasing returns to scale, there is not this powerful effect which drives a huge wedge between the dominant player and the next largest.

Collectibles and things not found in stores—If you’re trolling for one of the early GI Joes, a particular tea cup from 100 years ago, or will settle for a used monitor, where else would you go other than to a place where you can buy it directly (and presumably most cheaply) from the person selling it. Who needs a “dealer” when you can buy direct?

eBay results often don’t show up—I’ve found that eBay listings don’t show up in Google search results (other than the paid ads along the right side, which are humorously off-target sometimes. Here’s one example:

Arc De Triumph
Aff. Cheap deals on
everything Arc De Triumph.
eBay.com

Those that do are sometimes out-of-date—Sometimes the results that do show up are found on pages that are created through the use of eBay’s APIs, which enable others to build applications that pull information from eBay. By formatting this information on a page that has a high rank in search engine results, the entrepreneur is hoping that at a least a few people click through, bid, and eventually buy something on eBay, which generates a commission for him. The developer programs from eBay and from Amazon have resulted in a lot of these, and since in the Google search results they don’t reveal that these pages are simply a repackaging of sometimes expired our or out of date products, it frustrates users who are using something like Google to look broadly for product and price information. Both Amazon and eBay claim that their developer programs have been very successful, but it’s clear that one of the unintended results is negative for buyers who use a search engine as a shopping interface.