Argentum Blog

Lessons from a Spectacular New Product Failure

admin — Wed, 28 Jul 2010 14:38:25 +0000

This month we have a guest blogger, Nancy Goldstein of Compass(x) Strategy. While Nancy’s firm focuses on brand strategy and marketing for environmentally and socially responsible businesses, she just couldn’t resist commenting on the recent launch and subsequent discontinuation of the Microsoft KIN. I thought she makes some terrific points, and wanted to share them here. As you’ll see, she feels the KIN case is ripe with lessons to be learned to help businesses of all shapes, sizes and missions improve their new product launches. So, here’s what she thinks:

On May 13 of this year, Microsoft launched The KIN – their latest entry into the mobile market. Just 48 days later, Microsoft killed The KIN. After spending tens of millions of dollars on advertising, $500 million to acquire a small tech design firm, and countless dollars and people on development, the product was discontinued due to dismal sales.

It is easy, I believe, to criticize others for their failures. And many people have been having a lot of fun blasting Microsoft on this one. What is harder, but far more productive, is to analyze the situation to determine what we can learn that will make our own efforts better.

But first, a bit of background on the KIN:
The product was targeted to “15 to 30-year-olds who are social-networking enthusiasts,” said Robert J. Bach, president of Microsoft’s entertainment and devices division. However, as most reviewers aptly pointed out, given the functionality and design, the “bullseye” target is really at the younger end of the spectrum – high school and college students. The insight at the core of the product is that social life and self-expression are the “Social Generation’s” (Microsoft’s term) biggest priorities. Therefore, the Kin was developed as a people/friend driven device, rather than an app/function driven device.

Where did Microsoft go wrong?
Let’s start by saying that Microsoft does deserve some credit. The phone was based on a real consumer insight about how younger people use their phones/PDAs. Microsoft conducted thousands of interviews with their target audience to understand how they interacted with their friends and used their mobile devices. That is new behavior for Microsoft and they deserve credit for asking questions before diving into development.

However, one insight does not an entire product make. Specifically:

1. What people say and what people do are not always the same thing. As a result of listening to their audience talk about how much they loved Facebook, Twitter and MySpace, Microsoft built a device with social media at its core. Great. But apparently, since no one mentioned how much they love using a calendar, Microsoft didn’t put one on the device. Do people who love Facebook never have anywhere they have to be? What a very spontaneous bunch the Social Generation must be! The KIN has GPS, but no map functionality. Do members of the Social Generation not get lost going to all the spontaneously fun events they hear about through their extensive social network? Products must be designed based on what people really need, not just what they say.

Questions for your business: Do you know how people want to use your products? Not just what they say, but what they really want and need? How are you getting the answers to those questions?

2. Users and purchasers are not always the same people. This device is targeted to high school and college students. Great idea – it is an underserved market. But high school and college students don’t buy their own phones or pay their own phone bill. Microsoft was dependent on parents willing to cough up an additional $30 every month for a data plan just so their kid can be on Facebook.

Questions for your business: What is the purchase decision process like for your products? Do you understand who uses your products vs. who purchases or influences? How does that change the products or surrounding services that you offer?

3. Understanding what people are currently using is critical. As I mention regularly, people are not sitting around helplessly waiting for a new product to arrive. They are doing and using something. In this case, the competitive set appears to be traditional mobile phones. And given the functionality of mobile phones, the KIN is a great upgrade. However, The KIN is priced like a smartphone, and compared to a smartphone, it is severely lacking.

Questions for your business: what are your customers currently doing or using instead of your product? What will inspire them to switch? What are the barriers to switching and what can you do about them?

Customer Appreciation – The Power of Thank You

admin — Wed, 12 May 2010 18:54:37 +0000

I was a loyal United Airlines Premier flyer for 15 years. I loved getting on the plane first, sitting towards the front in Economy Plus, and always being able to find room for my bag. Not to mention all of United’s wonderful international locations to which I took many a free flight over the years.

However, at the same time, there was no question that I was frustrated by United’s horrible customer service. I’m still bitter about the Bengali booking agent who neglected to tell me that my flight involved an overnight stay in Tokyo, and the Manila-based agent who could not understand why rebooking me through Dulles after my BWI flight was cancelled was insanely inconvenient.

So it was with mixed feelings that I did not earn Premier status last year. The golden handcuffs had been unlocked. And now, although they have no international service on which to use my Frequent Flyer miles, I’ve switched to Southwest. I certainly miss assigned seating, but I love knowing that my flight is highly likely to take off and land on time, and their no mess, no fuss 100% cancellation credit policy is awe-inspiring.

I’m impressed with their operation and finally feel that I am actually getting what I pay for from an airline. To make things even more impressive, when I got home from a recent Southwest flight, I received this email.

I am still wowed. It is such a teensy tiny gesture. No doubt there is a random email generating program that sent it to me. But I love that they took the time to program their computer to follow up and say thank you. Not only did they get me to and from my destination on time and with minimal fuss, but they thanked me!

Small gestures of appreciation to clients and customers are disproportionately powerful. Are there ways you could thank your customers and clients more often? You can be sure they will appreciate it!

Kellogg Technology Conference Recap

admin — Wed, 28 Apr 2010 14:58:34 +0000

The Kellogg Graduate School of Management puts on a great Technology Conference every spring. It’s so good that it actually sold out in two days this year. Impressive! As one of the lucky attendees last week, I decided to really get in to the swing of things by tweeting tidbits from the conference.

This was the first time that I have actively tweeted from an event, and while there was the downside of missing some of what was said while I typed, there was the corresponding upside of 1) Focusing for a longer moment on especially interesting facts 2) Sharing with people who weren’t able to attend and 3) Creating some digital notes.

For those of you who aren’t active on Twitter, I thought it might be interesting to provide a quick snapshot of the conference by reiterating my slightly edited and enhanced Tweets from the conference here:

Keynote Speaker – Chris Dean from Skype:
- Love the word “freemuim.” This is how Skype describes its business model

Panel: Social Networking and Platform Monetization:
- Using social networking as a CRM springboard for small businesses. It’s thought-provoking to think about how would you follow through with what you learned about your customers!
- The Evolution of Social Media in Four Stages:
1) Distraction/entertainment
2) Ego/Status/Achievmnt
3) Connection
4) Genuine Utility (hopefully!)
- General Market ads shoot in dark, relatively speaking. Whereas Google ads hit at the “moment of intent.” Social Networking ads can make up for the lack of intent by suggesting choices based on past observed behaviors
- Love the idea of location-based technologies like FourSquare bringing social networking users out from the isolation of sitting at a computer and into the real world
- Did you know that 90% of Groupon offers tip? I always wondered about that!

Keynote Speaker – Jeff Russakow from Yahoo!
- 95 million new Flickr photos are uploaded each month
- Yahoo! has 600M users – who knew?
- Media spending is still very disproportionate to where media is actually consumed. Online is still quite under-utilized. It accounts for 28% of media usage but only 13% of the advertising spend
- Problem: Online ads are great, but they are really complex to buy, especially when compared to calling up the classified department at a newspaper