Basic digital television programming package from Comcast costs about $40. One of the biggest selling points for the digital packages is the ease of navigating between channels using the TV guide, and what Comcast has done with the advertisements in their TV guide is made this thing frustrating and harder to use. (To put things in context here, Comcast has added an advertisement at the bottom of each page of the TV guide. This advertisement is unescapable during channel surfing. The ad is obstructive because it is made part of the scroll, i.e. in the attached picture, if you want to go to channel 63 from 62, you will first have to go through the ad, making the ad every fifth selection in any channel surfing.)
This is a classic blunder that brings forward a couple of points. First, Comcast is literally repelling its customers using the very customer magnet it used to attract the customers. The customers feel cheated when they have to go through the obstructive ads even after paying an hefty fee to use the digital programming package. Instead of cultivating an ecosystem around the TV guide by making it more usable and likable by the customers, Comcast is prompting its customers to look for alternatives in this fiercely competitive digital television world. The least Comcast should do is make the advertisement non-obstructive during channel surfing.
It is no doubt that this is a great place to put advertisments. In the world of TiVo where customers skip the advertisements all the time, the ad that is unescapable is the one in the TV guide. But Comcast is missing it on the implementation. The best way to implement this ad would be to introduce a new set of “adware” digital programming package. Give the customers an option to select ad powered TV guide at a subsidized rate as compared to the non-ad loaded TV guide. Customers who choose for the ad funded TV guide will accept the ad, and at the same time, this would be a great way for Comcast to increase penetration into the non-digital cable customer base to go for digital television at a subsidized rate.
Web 2.0 solutions are often said to be in “Constant Beta“. Instead of running a long development cycle and coming out with a final product release, there is this iterative approach where the product reaches the users in record times, and the product usage insights are harvested for further improvements in the next development cycle.
Let’s look at the factors that facilitate the Constant Beta approach of product development. I think the biggest factor leading to Constant Beta is the delivery of products as services. Software services are hosted at a central location and are controlled by the service providers. These services are easy to update and can take fast upgrades leading to continuous improvement of the product. Agile Development approaches like eXtreme Programming and Scrum are used in the services world to get the product out of the door as fast as possible followed by constant iterative improvements.
Other factors that encourage Constant Beta approach are competitive nature of industry and fast evolution of services. Internet is a fiercely competitive environment where new start-ups emerge every day doing things in a better way. In such an environment, you got to keep evolving your offering to retain the customers.
In this Constant Beta world, I believe the beta tag is debatable. We can either say that it is understood that the product is always in a state of “work under progress” or stick the beta tag to it for ever making it almost irrelevant.
For Amazon it is was books, for Zappos it’s shoes, for Trader Joe’s it may be that chips collection, for Google it’s search and so on. Books, shoes, chips and search are the customer magnets for Amazon, Zappos, Trader Joe’s and Google respectively. Customer Magnet is that one thing that really attract customers to your door steps.
It is very important to have customer intelligence around the customers coming to you and identify the magnet that is attracting them over there. Equally important is how to put this magnet to work. First, make sure you are continuously improving on that product and beating competition squarely when it comes to the magnet product. This will help you build the equity for your brand. This should be done to an extent where your name becomes synonymous to the product. Next is developing the ecosystem around that product. This is something that can make a huge difference. You got to do brand extension “correctly” and use the equity you have built for your brand.
Do you got to have a customer magnet to be successful? I am a die-hard advocate of serving the niche, so I believe yes. You got to start from somewhere. Get hold of one thing and do it in the best possible way beating all the competitive options out there. That product will be your customer magnet and the center of the ecosystem that you could develop around it.
While surfing through the products in Google Labs, I came across Google Talk, Lab Edition. Interestingly, that’s not the Google Talk that was released sometime back (and is still in beta), it’s a different “edition” as Google calls it, which you can use in parallel with the Google Talk beta. Then I saw a very similar thing for Gmail as well. So what’s this new lab edition concept? I believe it is an extension of the beta culture for already popular products.
I think it is important to understand that we are talking about the lab edition of already existing products. Online companies with “Labs” exposed for customers to get a sneak peek at what’s new is a growing and relatively well known concept. There are huge range of version pre-1.0 products available in company labs, whether it is Live Labs or Fidelity Labs or even Google Labs. But the products in Google Labs, in some cases, are being used by the customers and customers have a choice to keep using the existing edition or try the new lab edition. That makes those products and this operation different.
In the Web world today, we live in a continuous beta environment. Products stay in beta stage forever and are continuously evolving. But it is very risk prone to drastically change a product after it is adopted by the masses. At the same time, you need to keep improving the product to keep an edge above the competition. In such an environment, coming out with a different edition of the same product is a great way to attract the early adopters, get their feedback, see what they like and what they don’t, work on the features accordingly, and release the features that are very well received by the lab audience to the masses.
Technologically it’s brilliant model. You get to know what’s working and what’s not without affecting the mass users of the product. Customers who are interested in experimenting get a peek at what’s coming out and keep using the older edition if they want. I believe it is a big gain from a marketing perspective as well, as such a release help marketers strengthen their base of mavens.
You see advertisement of Yahoo! Search and Ask.com on the television, but still end up using Google. You search on Internet for USB drive and find a zillion online stores where you can buy one, but still you choose Amazon, even if you have to pay a couple of bucks more over there. Out of a dozen brands of washing detergent in a store, you pick Tide (or your favorite brand) irrespective of minor price differences. That’s because you are paying the trust premium. Customers know that they will find whatever they are looking for on the Internet through Google, they trust Amazon with their order handling, credit card information and other personal information, and they believe that a product of a certain brand will be better than others.
People pay the premium for various reasons and one of those reasons is trust. I believe trust is the most logical reason to pay the premium, and leads to a win-win scenario. For the brand, it takes huge efforts to gain a position where they can rip the fruits of trust, and I believe when a company go an extra mile to gain that trust, they should be entitled to earn the premium. For the customer, it’s like an insurance. They trust a brand and any premium they put down for it buys them the peace of mind.