Three Rules For Successful Consumer Technology Companies

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We spent a lot of time with consumer technology companies and developed the following rules for success:

1/ Undeniable benefit.
The majority of companies accept the path of evolution developed by the first entrant in that segment and use manufacturing optimization to drive down cost and price as the basis for greater customer adoption. While that is a viable business strategy for some, real disruptive innovation is less price-sensitive as it triggers new behavior. The new behavior, in turn, taps into a new allocation of disposable income.

So, rather than looking at the competition, technology companies need to have a sound strategy as to how they will reach 30% adoption rates of the total-addressable-market that the current vendors have not. Macro-economics, the buying decisions, and experience beyond just the scope of technology are essential to assess.

2/ Impeccable product quality and user experience.
Consumers are both demanding and often uninformed about the technical language that many vendors impose on the use of their products. The combination is a battleground from which only well-developed products emerge. Simplicity is key (and too many usability options are NOT good).

Many technology companies develop products with an engineering-centric view of the world, insufficiently realizing that no consumer wants to learn a new language to understand how to use a technology product. Consumer-centric interfaces and methods are just as important as product intelligence.

3/ Great support experience.
Support is no longer just a painful cost center to a business; great support can be an asset that recovers the mounting cost of product returns and prevent market adoption issues from spiraling out of control. So, great support helps perfect product quality, but only if it provides a direct closed-loop back into development. Great consumer companies engage with their customers directly and get better at defining what a market-ready product really means.

Technology companies with thousands of entries in their support and third-party forums are ignoring free research that will make their product better. Support cost should be captured in the product P&L and managed by a single manager, responsible for R&D and support. Runaway support cost is often the result of a product that simply isn’t ready for prime-time.

So, macro-economics, product quality, and product experience are the main ingredients to create success for consumer technology companies and in turn, will provide incredible loyalty for the next version.

 

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