Experience Creators
We are trying to understanding the intersection of a number of trends. So what better way to do understand than to try and write about it, right?
First, we have become unhealthily obsessed with reviews. It seems that everywhere we look, we hear about reviews. In fact, we have been making more and more decisions about what to buy based on what others had to say, for a long time with Amazon and more recently Newegg.
Amazon still seems to have cornered the market with customer reviews and were probably one of the earliest to understand their value. But when Walmart.com embraced online reviews almost 9 months ago, it was clear to many that something big was happening and today, if you look at walmart.com, customer reviews feature almost as prominently as price reductions or “roll backs”.
Looking at this from another direction, is there increasing focus on customer service or more broadly customer experience and making better products? Almost 2 years ago, Adage ran a piece of how US R&D spending had been steadily catching up to advertising spending (not in all industries mind you, but certainly many high growth, competitive ones). The article is not directly accessible, but Joseph Jaffe was kind enough to capture the key ideas. This trend seems to be continuing, but we plan to investigate further.
From a less product centric perspective, important to the growing service section, Zeus Jones created a nice graphic showing the convergence of 2 previously siloed functions – namely marketing and operations (for example, call centers). Some companies have had this as religion for some time – for many years Intuit has made extensive use of their call centers to better understand what their customers need and what their product designers should be doing. But more recently, the CEO of one of the fastest growing online retailers, Zappos, explained how “…Zappos takes the money it would have used on paid media and pours it into the customer experience”.
We think what this means is that companies are finding that their products and services, simply need to be better. Because it is increasingly difficult to support bad experiences with great advertising. And competitors have to spend much less to rapidly gain market share – they just need great reviews!
(image from www.ivoshaap.com)
Posted in: Product Development | Tagged: customer service, Product Development, reviews | 2 Comments
2 Comments to “Experience Creators”
Right on. It’s the uber-benefit to reviews. Manufacturers will have to make better products and give better service.
I wrote about this in a blog topic called “The Word of Mouth Company”
http://decker.typepad.com/welcome/2005/09/the_word_of_mou.html
Thanks Sam. I am going to try to formalize this as part of a thesis I am working on. I think there are a few public numbers such as R&D investment, ad spending etc that can be used to highlight the trend.
Beyond that, I will probably look at some companies that are rapidly growing (revenue, marketshare, etc) and try to understand what they are doing from an experience perspective and measure how they compare from a WOM perspective.