Last night I was invited to join a conversation about an idea for a product that has the potential to brighten the future of high school students EVERYWHERE. The niche this product will serve is completely devoid of any other solution, which makes it very exciting.
During our 2 1/2 hour conversation, I found myself using examples from some of the most innovative companies around to help add understanding to some marketing concepts. I thought it would be fun to get these thoughts down on “paper” and let you take a whack at them.
DISCLAIMER: What I’m about to share in no way tells the entire story about either the company or the product/service in question. In the tech arena in particular, I know more than most about the “whole” story behind these situations, but for obvious reasons chose to pull out small bits and pieces to bring clarity to this particular conversation.
We started talking about how to package the different parts of this particular product – whether or not we should tailor the solution to specific audiences and pre-choose the options available. The thinking is that this helps show how all of the product brings value and there is very little irrelevant options, which would in turn increase the perceived value and allow you to customize pricing to fit the situation.
I thought about MS’ Office suite of products. For any given user, they probably use no more than 20% (generous) of the features of Word or Excel or PowerPoint. But if you look at all of the users that use the product, I bet the feature utilization is near 100%. Someone somewhere is using each and every feature in each of the products in Office and are not shy about asking for new features to be included in the next release.
THE POINT: Today’s users want to have both the choice and freedom to use the product according to how they operate. In other words, they want the product to fit them, not having to fit the product and deciding which options ahead of time is too limiting. Tailoring solutions to niche groups is a bad idea for another reason. It’s expensive. Think of the time and energy it takes to bundle, sell and maintain 20 product versions for 20 different user groups versus one large suite of products that get’s 20% utilization per customer, but 100% utilization across all customers.
APPLE (Yes – I’m an equal opportunity geek)
Yesterday’s release of the iPad was another stunning example of why Apple’s stock hasn’t taken a nosedive like everyone else’s. While the product lacks some very key elements, there is no denying the emotional draw to own one from the minute I laid eyes on it. After watching the promo video, I started to scheme about how to pay for it. About an hour later, I came to my senses and wondered how it would really make life better.
In the part of our discussion about what stage of the game to reveal your product, I was reminded of just how polished everything Apple seems to be at launch. They work out the kinks, test the user interfaces and even design packaging BEFORE we ever see it. I’m sure they have a secret society of product testers, but the rumor mill is always buzzing and nobody ever actually knows enough details until Apple wants them to.
There is a healthy amount of paranoia that Apple has learned to integrate into their product development cycle. By being the king of the hill (by most accounts) on product design, the world is ready and waiting to knock Apple off their perch. Apple doesn’t give them much of a chance to get to market with a competitive product because nobody knows what to fight against.
THE POINT: If you believe you have a great product that is unique in the marketplace, don’t show your cards too soon. Gather feedback and do proper product testing and market research, but be smart about it. Underpromise and overdeliver. Tout your strengths and don’t apologize for what’s missing.
At one point, the conversation came around to how to acquire customers – how do you get your foot in the door to a group of people that don’t even know they necessarily need your product? Adobe instantly came to mind. In my opinion, they are the most innovative company out there because they build the tools that everyone else uses to build theirs.
I had a chance to attend their annual geek conference called MAX one year and I was blown away with their vision for the future of their role in the way people communicate, relate and conduct business going forward. They are a crucial key player in making our dreams become a reality with decreasing complexity, time and effort.
And they know it. If you look at the price point of their software, you quickly understand that a serious intent on playing is required to get in the game. They are a premium software company with a premium price. And yet, they offer fully-functional, 30-day trial versions of almost all of their products.
On first glance, that seems risky – what happens if their security measures are hacked and people are able to use their goodies for free? Sure, there are laws that supposedly protect Adobe from that type of behavior, but an examination of any BitTorrent site will tell you nobody’s really worried about Johnny Law knocking on their door.
If you look at it again, it’s brilliant. It’s actually the oldest selling trick in the book. Give them a taste to whet their appetite and for those that can’t live without it, they pony up the big bucks. And once Adobe has them, they do their best to keep them by offering discounts on upgrades to existing customers, software assurance that makes upgrades cost nothing and a vibrant user community that is always doing something very cool.
THE POINT: Whether you are an established market leader or a newbie wanting to gain market share, giving potential customers a way to play with your product with very little risk goes a long way to converting them into paying customers.
When putting together a product, you obviously need to consider the different components and how they fit together and then how each of the components adds value to the whole. When thinking about how to price the idea last night, I thought about the innovation that Michael Dell brought to the personal computer market back in the day.
At the time, there were really two ways to buy a computer. Either go to a big box store and pull one off the shelf or build it yourself. The former lacked customization and the latter was incredibly complex (at the time). Mr. Dell saw an opportunity and his brainchild completely revolutionized the way we buy computers. First, he didn’t make his product available at retail outlets – online only. Second, he gave the consumer the ability to “build” the perfect computer via Dell’s website without the need for a degree in Computer Science.
Needless to say, it was an instant success. Dell’s influence in the personal (and eventual business) computer marketplace can be seen in every computer manufacturer still alive today – even Apple. People want the ability to customize their purchase to get the biggest bang for their buck and ensure that their purchase meets their individual needs. Dell gave them that ability and now it is a perceived “right” all computer buyers believe they have.
Michael Dell didn’t reinvent the personal computer, just the way people bought them. He gave them choice at an individual component level. Wow!
Big retail stores still sell plenty of pre-built computers because there are plenty of people that just want a computer for Internet access, e-mail and the occasional greeting card. And today, you see Dell computers right there beside the others.
THE POINT: Developing a product delivery plan that is flexible enough to allow savvy users to get exactly what they want is worth the time and energy required to set up the associated flexible pricing plans that go along with it. Having a base product that people can walk up and buy and walk out is very important as some of your customers won’t care enough or have the experience to know what is best. For the rest, customization is what can differentiate you in a way that is completely separate from what problem your product addresses.
Great ideas need great marketing to thrive. Great marketing needs experience and creativity to be effective. Getting “it” right isn’t easy and you’ll know you’ve been successful when you have made it look easy. Microsoft, Apple, Adobe and Dell have all shaped our lives over and over again and innovation, hard work and perseverance are all hallmarks to their success and legacy.
Learn from the best because you will have plenty of your own challenges to overcome. I like Thomas Edison’s approach to invention:
“I never perfected an invention that I did not think about in terms of the service it might give others… I find out what the world needs, then I proceed to invent….”
Consider the impact to the world before the impact to yourself and the latter will take care of itself.