What customers actually want (now also applies to tech markets)

What customers actually want (now also applies to tech markets)

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I once spent a month analysing five-years worth of marketing surveys for a major manufacturer across the whole of Europe. At the time, I found the results bitterly disappointing. In retrospect, I should have seen them as a revelation.

What automotive braking customers wanted was the highest performance, most reliable products delivered right now for the lowest possible price.

Sounds obvious, right?

Many things in marketing which are true sound obvious, but there are also lots of things which sound obvious — particularly when you are making a product — which are not true. For example, a couple of years ago lots of tech-journalists said there was obviously no market for a tablet computer, since tablet computers had been around for ten years and nobody was buying them. Evidently wrong. For years an urban myth floated round claiming that a light bulb which cost almost no energy and lasted almost indefinitely had been invented, but the oil companies and the government were conspiring to keep it from being released in order to keep the price of oil high. The myth was obvious nonsense, but the underlying ‘obvious’ truth was that if such a device existed, everyone would buy it and energy sales would drop. When first fluorescent and then LED light bulbs came onto the market, promising dramatically lower energy costs and longer life, adoption was so painfully slow that governments (though probably without the collusion of the oil industry) are banning incandescent bulbs to force people to switch over. A part of this was over-selling by the manufacturers, who claimed that their 15W bulbs were as bright as 100W bulbs, which they clearly aren’t. Much of it, though, was market inertia.

If you want to sell a product, rather than a service, you would do well to look at the conclusions of the survey I mentioned. The data was proprietary, but the conclusions are general. The brand values that make you ‘par’ for the course are:

  • Performance
  • Availability
  • Reliability
Everyone wants to buy products that perform well enough. That was one of the main issues with replacement light-bulbs: the colour was different, and they gave out less light. Manufacturers would have done far better to give correct, perceptual figures and sold 22W fluorescent bulbs to replace 100W incandescent bulbs — still a saving of better than 4:1 — which would not have prompted customers to say “but they don’t work”.
Right back in the 1960s, British business fell foul of the Availability issue, when toy Daleks became the rage. The Dalek was a British invention. But it was Hong Kong manufacturers who were able to flood the market because British manufacturing couldn’t cope with the demand. This was back in the days when ‘Buy British’ was still a watchword for many people, and ‘Made in Hong Kong’ was code for ‘cheap and nasty’. Nonetheless, customers will buy what they can buy.
Supermarkets are all too aware that one of the biggest causes of brand churn is lack of availability on the shelves. People will keep buying what they buy, until they can’t get it. When they switch, they may not switch back.
Scarcity can — to a certain point — push up the desirability of goods, but only if there is not a realistic competitor on the horizon. The launch of the iPhone 4S and the new iPad was greeted by an immediate backlog (though, strangely, you could walk into the Apple Store the next day and pick up an iPad without any difficulty). This did Apple no harm because of two things. First, a lack of a real competitor — although Android fans will tell you that their tablets are ‘just as good’, someone who has decided to buy an iPad will generally make sure that’s what they get. Second, a confidence that the scarcity was one of delay rather than non-appearance.
Reliability is simply a question of: will the thing that I buy carry on doing the job for as long as I expect it to.
Consider the most basic shopping experience of them all: buying a can-opener in PoundLand. A can opener is a completely undifferentiated product, at least with the traditional chromed alloy design.
I spent much of the last year working with a group of people who were more or less half my age. Some aspects of that were very exciting. Going for a lunch time walk, and ending up visiting PoundLand, 99p Land, and two other variations, with the intention of buying the aforementioned can-opener was not exactly exciting. But it was very instructive.
First, everything was set in the context of price. Tesco, Rackhams, Selfridges, Debenhams and the like were all ruled out. People who would happily sign up to a monthly contract which resulted in spending more than £1,000 over eighteen months to own a Samsung Galaxy S2 or an iPhone 4 ruled out the pricier shops because they were inappropriate for the purchase of a can opener. I’m fairly certain we would have got a budget can opener from Tesco, but the theory was never put to the test.
Second, availability was crucial. In an undifferentiated market, either there was a can-opener that looked like a can-opener on the shelf, or there wasn’t. In one shop there was a much more modern kind of can-opener, the kind my mother recommended to me fifteen years ago and which I always buy, because they work better. This was rejected: we were in the market for a traditional can-opener, not some fancy modern thing. What’s interesting here is that, at Tesco, you would certainly pay more for the modern can-opener than than the traditional kind. At the particular £1 outlet store we were at, everything was £1.
This brings us straight to perceived reliability. When shopping for an undifferentiated product, caveat emptor is firmly written into the psyche. With a little inspection, you know that a traditional can opener is going to be as reliable as you expect it to be. It’s metal, it looks the right shape, when you turn it in your hand it responds as you want it to be. The fancy plastic looking kind, with oval shapes, might not work at all.
Which brings us to perceived performance. Actually, although manufacturers persistently push additional features and higher performance, most customers are not looking for something which outperforms their expectations. I’ve seen crowds shuffle away from a charismatic market tradesman who insists that the product in his hands is better than the knife they are used to. I have no doubt (because I’ve seen it) that the same salesman could sell budget kitchen knives by the hundred. But something which promises to outperform is viewed with suspicion.
To recap: set against price, customers want performance to their expectation, they want reliability in that performance, and they want availability. Given those things, they may well be interested in style, trend, prestige, environmental qualities, extra features and so on. But failing in the first three means the product will not sell widely.
Some tech companies understand this very well indeed. Everyone, of course, immediately thinks of Apple. But the same is true for Philips, which has quietly pioneered the CD, the new light bulbs, and my personal current favourite, the air-floss, which takes little time to use, is painless, and doesn’t ever make your gums bleed. The path of a Philips product is very simple: they develop it, manufacture it, ship it, and market it. This traditional approach to ‘ship first, market afterwards’ is the opposite of the ‘announce now — ship in three months time’ that we’ve got used to in the tech world, or, sometimes, ‘announce now — ship something quite different in a year’s time’, but it  has enabled Philips to keep selling everything that it makes. They don’t just sell light bulbs. Walk into a major hospital and you will see a lot of very pricey Philips equipment saving lives.
By and large, though, the steady erosion of margins in the consumer-tech world, which has troubled Sony, Dell, Nokia and other great players of the last two decades, has to do with a failure to understand the three product fundamentals.
I’ve already referenced the availability paradox. Tech companies are so desperate to be ahead of the game, to have the very latest features, that they often announce products months before their release. It’s irrelevant that they can fill the shelves of Currys and PC World when the product finally is launched. The buzz and the desire is at the time of announcement. Samsung appears to have learned with the launch of the Galaxy S3 this simple lesson from Apple. Announce your product, and allow pre-orders to start more or less the next day, with first delivery a couple of weeks later. Any longer and you haven’t created expectation, you’ve created frustration.
Performance is another area in which tech companies have long failed. Tech companies may be surprised at this assertion: after all, they have improved the speed and capacity of their machines every six months since the 1970s. What industry trades on performance more than tech does? Actually, almost any industry. Performance is against the customer’s expectations, not against some internal benchmark that the company has set to distinguish itself from its competitors. I’ve been watching adoption of personal computers since the Apple II days. Although I have heard almost nothing apart from specifications from tech-thusiasts, I get the opposite from non-tech consumers. The first thing they say when they get the shiny new PC home is more or less ‘how do I get it to do the things I want’. Enthusiasm is immediately abated when they discover either that they have to buy separate software, or that the version of Windows, Office or both on their new machine is different from the one at work, and doesn’t do things in the same way. It may be ‘better’ in a tech-gressive sort of a way, but as far as the customer is concerned, it does not perform as expected. Very few consumers are still thrilled with their new laptop a week after getting it out of the box.
The final element of customer disillusion with tech is on reliability. Again, this is an area where Apple and Philips excel (have you ever had to return a Philips product?) Sharp contrast with most people’s experience with PCs: the number of times they have to go back to PC-World, the difficulty of getting things sorted out, the promise that it was sorted when it still goes wrong when you get it home.
Part of the rise of Samsung in the high-end tech world is because they understand the importance of reliability. Samsung TVs generally don’t go wrong, Samsung DECT phones keep working no matter how often you drop them, Samsung smartphones keep doing what they were promised to do. 99% of the profits in the mobile phone industry, according to recent reports, are made either by Apple (at 78%) or Samsung (at 21%). The rest of the manufacturers account for just 1% of profit, though vastly more in terms of turnover.
In the same way, the rise of the Amazon Kindle has a lot to do with them not going wrong. If you want to replace a paper book, then you are still left with the three things: does it read as easily as a book (performance), is it as reliable as a book, and can I get the books I want? Amazon’s success over its rivals is in a large measure because it has far more books on its books, and they are instantly downloadable on the 3G Kindle for no additional charge.
In retrospect, instead of submitting a rather dejected verbal report at what I uncovered from customer surveys, I should have been shouting it from the roof tops.
Brand Motor launches

Brand Motor launches

Today I launched Brand Motor Limited, my new business. Oh, and it was my 46th birthday. There is a connection — but more on that in a moment.

Brand Motor is not, as some scurrilous friends suggest, a second-hand car dealership. It’s a branding consultancy aimed at powering business growth through branding. To be exact, Brand Motor exists to power the growth of small and medium enterprises in the Midlands, UK, by giving them big business class brands.

I’ve been doing branding now — to a greater and lesser extent — for twenty-four years. This has been mainly alongside marketing, PR, public affairs, social media, internal communications, advertising and event management. When I went for my Chartered Public Relations Practitioner viva voce in 2009, I told the panel that when I was 25 I knew 100 things about PR and marketing, but now (that is, then) I know just five things. I’ve narrowed it down again: now I only know one thing. But it’s the right thing.

If that is a little cryptic, let me unpack it somewhat.

When you start out in PR or marketing there seem to be hundreds and hundreds of things you have to know and remember. What’s the difference between ROI and ROAE? When do you use your 4 Ps, (or 7, or 9, or I once found a list of 16)? Above the line or below the line? Exactly where is the line, and how do you draw it?

After a while in the business it begins to settle down. You discover what works and what doesn’t. You discover that some things are fads of the moment, some are longer lasting but equally faddish (like USPs). And some apply whatever you’re doing.

At the age of 46 (that number again), I’ve come to the conclusion that if you get the brand right, then everything else falls into place. If you don’t, then you’re just pouring money into bad marketing, bad PR, bad advertising, bad social media campaigns, bad publications and bad staff newsletters.

By the brand, I don’t mean the logo. There are great brands that have no logo, and some beautifully designed logos which contribute nothing whatever to the brands they are supposed to represent.

Ultimately, a brand is a promise, and the strength of your brand isn’t based on how magnificently you make the promise, but on how well your customers think you keep it. To make it work, of course, it has to be wrapped up in something identifiable and memorable. That’s where a logo might come in — or not. Often it’s just a name. Radio 4’s Today Programme may well have a logo, but I have no idea what it is. My relationship to it is entirely auditory. The Spice Girls probably had a logo as well. My relationship to them wasn’t even auditory (except by accident). The Spice Girls represented something, and I knew more or less what it was. They seemed to fulfil their promise to their target market (which definitely wasn’t me) pretty well, at least for a time.

But I digress.

When asked to go in and help with PR, marketing or advertising for a company, a charity, a not-for-profit, a special event, a new product or even a political candidate, what I’ve learned is that if the promise is right — which is to say, it’s promising something which the promiser can deliver, and which the people who it’s being promised to actually want — then all the PR, advertising, marketing, publications and so on are fairly easy to do, and to do well. When there’s an issue about the promise — not delivered consistently, doesn’t solve a problem for the people its aimed at, doesn’t do it distinctively or uniquely, or is just too hard to explain and remember — then all the other bits move painfully slowly, they cost more money, and they deliver less results.

Which brings me back to launching a business in branding for SMEs in the Midlands.

Britain’s economy has taken a knock over the last few years — not just in the banking crisis. We became more and more reliant on banking because we spent less and less time either making things or delivering services that enhanced our economy in some other way. That doesn’t mean that other activities aren’t valuable (they are). In solely economic terms, though, it’s the business of doing business which powers a stable economy.

The backbone of Midlands business has always beens small and medium enterprises — essentially businesses with a turnover now of £1 million to £15 million. Although the big names such as Lucas, Jaguar LandRover and Cadbury’s  were individually the big employers with enormous turnovers, it was (and is) the network of small and medium enterprises which served them and each other which were our powerhouse.

In a global economy, though, local and regional businesses that used to do very well are under threat. It’s as easy to source from Czech Republic as it is to source from Wolverhampton, and as easy to source from China as Czech Republic. Businesses which were the sole provider of a trade or skill in a region are now facing competition from overseas. Equally, they have new opportunities for serving markets from Dresden to Delhi and from Moscow to Mexico City.

The contribution I want to make here is in strengthening their brands. So that when they go to international trade shows, Midlands business leaders can by solid in their confidence that their brand will compete with anyone else’s. There’s nothing worse than arriving at a trade show with a rag-tag collection of bits and bobs to see your main competitor there with a glossy stand which is pristine, organised and confident. Actually, there is something worse. It’s going to a trade-show with the best stand you can possibly get together, and then discover that someone who didn’t have a stand at all, and just went from one place to another with his business card, stole the march on you. Great brands don’t need a tonne of marketing collateral behind them. If the promise is right, it sells itself, and every other almost-right promise, no matter how glossy the brochures, serves only to accent the difference between getting it right and getting somewhere close.

And 46?

Everyone should start a business at least once by the time they’re 46. At least, that’s what I’m saying now. We are all living much longer than we used to. Life expectancy is going up in some places faster than we are aging. But it’s still for us to make the most of it.

The One Basic Plot on Kindle

The One Basic Plot on Kindle

A lot of the 4,000 or so visitors to this site each month come searching for subjects related to writing. Although writing sword fight scenes appeals to a lot of people, the part of writing which I’ve reflected on most over the past twenty-five years — and failed to find satisfactory answers among published books — is What is Plot? and How do you write a good one?

Having been entirely unsatisfied by Christopher Booker’s Seven Basic Plots, which (in my view) were neither plots, nor basic, nor even adding up to seven, I decided to do my own research. This produced initially the article The One Basic Plot, and, with considerable expansion and revision, has now led to the book The One Basic Plot: How we tell stories, which is available as of today on Kindle, a snip at just £2.21. Kindle will also run on your iPad, iPhone, Mac or PC, so don’t be put off.

Basically, I’ve come to the conclusion that there’s one fundamental, universal shape to the plotty bit of stories, and you can apply this shape to any scenario, premise, situation, character and outcome to produce a story which feels like a story worth telling. In other words, I’ve come down against the notion that there are seven, or two, or twenty, or thirty-six basic plots, and decided that there are an infinite number, and they can be about anything you like.

Hopefully you find this liberating.

The book is quite short, hence the price. It’s tempting to pontificate about writing and telling stories, but, seriously, most people who are interested in stories already know most things, and, if they don’t, they are already available in hundreds of books which tell you to use ‘said’ rather than ‘whispered’, ‘yelled’, ‘repeated’ and suggest your ‘show don’t tell’ (or the other way around). So instead of regurgitating what is already known, I’ve tried to keep it down to just three big ideas: the double-reversal, the collision of narratives, and the moment of clarity.

If you’ve been struggling with Nanowrimo, or you’ve completed it (congratulations) and are now wondering if your plot works or not, and, if it doesn’t, how you can fix it, then this book is for you.

Just so you know.


The myth of measurement

The myth of measurement


Image via Wikipedia

How do you tell the time from a thermometer? How do you calculate the temperature from a clock?

Let’s leave these questions for a moment and look at the kinds of measurements which fascinate us. England just beat India in what was, according to different publications a ‘sneak’ victory, a ‘well-timed win’, a ‘thrilling finale’ and a ‘scrape through’. Apple’s iOS (for iPhones, iPads and iPod Touch) versus Android (for the majority of other smartphones sold) excite a similarly competitive response from their respective fans whenever new data is published. YouGov, Mori and others thrill the political betters on a week-by-week basis as they announce the current fates of the UK’s major parties through polls.

We love measuring — batting averages, downloads of apps, popularity of a party leader — and we love it even more when there’s some kind of competition going on. Calculating probabilities of particular outcomes is even more to our tastes, witness the £6 billion (according to Deloitte) impact on the UK economy of the betting industry alone.

The problem is, in a world where we now have instant online access to day by day measures of things which we had never thought to measure before, we are often taken in by the apparent importance of what can be measured, and ignore the importance of what can’t be. Someone pointed out to me early in my career that if you want a team of people to achieve something, the easiest prod in that direction is to simply start measuring it. Conversely, that which is not measured is ignored.

So, how do you measure time with a thermometer, and how do you measure temperature with a clock? Simply, you can’t. The two are — except transitorily, in particular situations — completely distinct and independent. Even connected variables — for example the revs per minute of an engine and the speed of the vehicle — cannot be used as proxies for each other. Air resistance, the road surface, the condition of the vehicle, and, most importantly, changing gear all mean that the fact that the one causes the other cannot be used to predict the other.

Consider for a moment the Android versus iOS debate which rages incessantly in the techy websites in the same way that Mac versus Windows has raged for years. The difference, though, is that iOS versus Android is much more volatile, and all the measurements tell different stories.

  • Android fans responded with glee when sales of all Android devices surpassed sales of iOS devices worldwide
  • JD Power just released the 2011 user satisfaction ratings for smartphones, and Apple came top. Search any of the sites where this is commented on, and you’ll find a lot of comments by disgruntled Android users pointing to their own personal experience
  • Apple currently has the most apps in its App store, and the highest downloads, but new research (well, predictions) by Ovum and by Strategy Analytics suggest that Android downloads will surpass iOS downloads this year or next year. Much glee among Android fans — especially because Apple has been quoting, from time to time, the number of apps available in its App store on its UK TV adverts.

Every day, more numbers, and more predictions of numbers, come out giving one side or the other ammunition. But what exactly are we measuring here? Seriously, not a great deal. No matter how manically you collect apps for your smartphone, there are already more apps than you could ever possibly have time to evaluate. Likewise, whether more people are using iOS or Android is unlikely to affect you — providing that enough people are using whatever it is you use.

Back in the 1990s, there was a real chance that Apple, with its 5% of PC market share, would actually disappear along with the Amigas, Amstrad PCWs, ZX Spectrums, Amigas and Sharp MZ 80Ks. Getting above — and safely staying above — the threshold level for a mass market business is important if you want to be in the mass market. Back in 2007, when the iPhone was first released, there was a real question about whether Apple would get enough market penetration to have a business at all. In hindsight it’s obvious that Apple would, but at the time it wasn’t. Phones were a market Apple had no heritage in, and satisfaction levels with the world leader, Nokia, were very high. Smartphone penetration of the market was low, and there were no examples of touch-screen devices (as opposed to stylus devices) which were successful in the mobile phone space. The same is true with the number of apps. I remember in the early days of apps, which only became available with version 2.0 of the (not yet named as such) iOS system in mid 2008, checking every day to see what new apps there were. After a while I was checking particular categories, and shortly afterwards there were just so many new apps that it was not possible to check. Once there are enough of something, it’s largely irrelevant how many more than enough there are.

The real measurement everyone should be looking at, as far as Apple’s business is concerned, is overall profit from the iOS range. Businesses have themselves a large number of more refined ways of measuring return on investment which also take into account such things as opportunity cost (when you’re doing one thing, you can’t be doing something else which might have made more profit), the difference between assets invested and assets expended, and other such things. But it all boils down to: are we making a profit.

On the other hand, from the phone user’s point of view, no measure will actually tell you whether one kind of phone or another is going to work better for you.

I was involved in a brief online exchange with a former Oxford mathematician who claimed he could guarantee that the probability that there was not a God was higher than the probability that there was a God. Therefore, he argued, a reasonable person would be an atheist rather than, say, a Christian. The exchange came to a fairly rapid end not long after I challenged him to show this. He told me that the probability calculations were far too complex for me to understand.

Whether or not he was right (about it being too hard for me to understand), it begs the rather more fundamental question of: how do you measure the probability that the universe is set up one way rather than another way? Do we count up the number of possible universes which are created by a God, versus the number of possible non-created universes and make a ratio of one to the other?

It was Richard Dawkins, of course, in The God Delusion, who popularised the ‘Boing 747 argument’ against the existence of God. I suspect that this is what my online correspondent was really referring to. But Dawkins’s argument is more of a ‘don’t you think that it’s more reasonable to…’ argument than anything to do with maths, statistics, or even natural science. The answer is, of course, if you are an atheist it always seems more reasonable to believe that you’re right than to believe the opposite. However, as any reformed gambler will tell you, being 100% certain that your bet will pay off has no measurable impact on whether or not it actually does pay off.

At the beginning of the summer, going into the Test series, the expectation from almost everyone was that England vs India would be the clash of the Titans: the current world number one (India) versus the team which, if it could secure an overall series win by two test matches or more, would become the world number one. India had three of the world’s top five batsmen (if I remember this correctly) in its squad. In England’s favour was that the matches would be held in England, under English conditions. On the other hand, Tendulkar was poised to be the first batsman in history to score 100 international centuries, and most cricket fans considered it to be a question of when in the series it would happen, not if.

In the event, it was a whitewash. Tendulkar made no centuries, India didn’t win a match. Whatever it was that all of the pre-series statistics and calculations were measuring, it had no impact on the cricket.

As we say so often in politics, the only poll that counts is the one on election day.

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