Sunday, June 10, 2007

customized for the customer

I have always been a strong supported in getting a good understanding of the customer as the basis for product and service design. There are so many great examples of this, that it should be a no brainer. But then there are so many examples where companies develop a new technology that they force on customers assuming they will love it, that apparently it is not a no brainer after all.

This week's issue of Business Week (June 11, 2007). provide great examples of both.

1. Jamba Juice wants to go beyond just a smoothie company. So they are trying to find some new products that will expand their product line. They conducted real user testing and focus groups to find ways to convert the juice smoothie into a light meal. And when at first they failed, they put the idea on hold - they didn't sell it anyway and hope for the best. Next month, they are rolling out a series of new products that succeeded in their recent testing. Good for them!!

2. DeBiotech discovered that one of the problems with current insulin pumps for diabetics is that they have to replace the whole unit - which is very expensive - or use self-injections, which is inconvenient. So they developed a pump with a replaceable reservoir. Simple mechanically, but it shows that they thought about the details from the patient's perspective.

3. Marriott and Nickelodeon are partnering on some new hotels that immerse the kids in the Nickelodeon experience. They did some real user research and found a balance that makes kids and parents happy. They also found a way to integrate business services so that all kinds of family trips can be supported. This is the kind of new product that has a huge capital investment up front, so it is great that they did some serious testing before throwing these sums of money at the idea.

4. Disney has a big and growing market in Russia. But rather than increase the supply of American movies they ship over, they decided to make some local movies using Russian actors, speaking Russian, using old Russian fairy tales for plots. This is even though the new Pirates movie hit a record for foreign film box office.

5. Sotheby's discovered that their clients fear risk. So they innovated their business model to alleviate the client's risk. They guarantee minimum prices for some art auctions in return for a cut of any price above the minimum (in addition to their normal commission). This takes on some risk for themselves, but not as much because they have more expertise at predicting the final price, and if they do enough of them, they can balance their risk by winning some and losing some.

6. Several consumer electronics companies are coming up with 'tweeners, products that are between a laptop and a smartphone. Sometimes you need more than a smartphone (in function), but less than a laptop (in size and weight). So for these times, you need a 'tweener. But who can afford a third device (selling at $1000-2000)? Only business travelers. So I am less sure that they have found a market, or if they are forcing the market.

7. Joost is a service that provides full length TV shows via the Internet. Instead of going the YouTube route, they are providing only official content and protecting the copyright. To get the content, they have to sign agreements with the content providers (the channels). Jumping ahead a few years to when they will have the needed bandwidth, HDTV is every household, and all of the channels signed up, is this a service people want? Is it any different than on-demand services we already have? They claim that because they will have lots of information about each user, they can replace five untargeted ads (for products the viewer has no interest in) with a single targeted one (a product they are likely to be interested in). So users will be willing to watch the ad because there is only one. Hmmmm. Not sure about this one either.