tJP

This post was prompted by a recent conversation and also by a meeting some months back.

Both conversations were around mobile email being the ‘Killer App‘ for two different companies. One is a smart-phone manufacturer and the other a telco - both saw mobile email as the ‘Killer App’. Both are wrong because of timing.

As the wikipedia link above notes the Killer App is much sought after. But the companies who have built them don’t seem to thrive - eg Visicalc, Lotus 123, Palm. In each case the applications developed promoted and validated a platform that took off, but when competition came in the original companies did not adapt and thrive in the new environments.

In the case on mobile email there are two key reasons(in my mind) why the mobile email is not the Killer App:

1.  Every device does email (well every smart-phone does email) - some great, others OK but they all do it. So Blackberry started it, Windows Mobile, Symbian does it and iPhone makes it sexy
2. Mobile email is promoted by Telcos as a solution at a price-point. In the main the Telcos offer the same handsets, same price points, same speed, same coverage etc ( I know that Telstra will scream!)

The two point clearly that mobile email is now a commodity - that means bad in marketing speak - it means undifferentiated, price based etc yuk! Not to say that there won’t be great growth as people pick up smart-phones as predicted and volume of data increases and the your Telco will make money from their 3G network - but not a Killer App.

By the nature of these industries companies who innovate get great growth as the market grows but will have followers who will develop very similar solutions - probably at a lower price point. So what can an innovator do?

The answer lies in a variety of areas:

• What do customers want? Think about the segments carefully - such as early adopters, teens - what are their pain points and their needs, wants etc( your general market research will not answer this)
• Why did the ‘early adopter’ buy a Blackberry - what was their need and what is their current need eg is email still their #1 app or do they now tweet and its therefore about communications and not email.
• Redefine the original category - continue to push the envelope -prove you are better - better still redefine what you as a company does
• Look at what other apps you can build for your customers. For example there was no real killer app for the Windows platform although Office comes close but that was packaging a bunch of good apps at a price point - saving time/effort etc
• Fight the commodity trap - be different, do different and force people to choose - better to lose a customer because you don’t fit the bill than tonot have a clear position to defend.

So if you once had a killer app that became a commodity and its now a liability - get back to basics and understand innovation and the customers - again!

This post is piqued by three things:

1. Commonwealth Bank Marketing head confirms 98% failure rate
2. Helping a call centre
3. Readers Digest sent me the opportunity to win $550,000

I am trying to understand whether the Purple Cow was a passing phase or whether some of these organisations haven’t read it yet( Published 2003)

Looking in more detail. In the SMH yesterday Mark Buckman the CMO of Commonwealth Bank noted that a 2% response rate was still by much of the industry considered a great return. He seems to to be railing against the 98% failure rate and the waste that comes from that. I agree.

His solution is to look at transaction data and other data and pull together a better target group. I think he’s half way there. The typical steps these large DM houses undertake are:

• Choose the right people - most likely to respond to a campaign(good)
• Develop a strong offer ( good)
• Make the offer - to everyone ( can do better)

I think there are a couple of bits missing - namely a close link between the right people and the offer. When should you make the offer, what words and images should be used and is the offer tailored or “what offer can you make to that person that will amaze them” or at least be vaguely tailored to their situation. Maybe even the odd outbound phone call would help - note that your bank never calls but your telco does! For example, even within a common AB demographic there will be different people with different pressures - communicate the right way and you’ll get a much better result. In the meantime I think that 2% will continue to be the rule of thumb!

Another example is a call centre I am helping. Their mode is a little less scientific - step one is get the yellow pages, then call all the numbers, ask for the managers name, wash the data against the ‘do not call register’, then call and do some hard core professional selling to get an impulse buy. Targets include getting 12-14 presentations done for 1 sale. Getting a referral lowers this to 7 presentations per sale. What is truly remarkable is that there’s nothing remarkable, no softening up, not email campaigns, no website references - its call all the numbers, top to bottom and ‘its a numbers game’.

Finally, good old readers digest - they sent me the opportunity to win $550,000 in a sweepstakes. Best part was that it was truly remarkable that they thought that printing the offer on pink/purple paper and made to look like a payslip would make me do something (and not blog it).

Anyway, if you thought that the Purple Cow was the way to go and you have yet to find your, don;t worry you are not on your own, lots of people still marketing by numbers!

So how does Chrome OS succeed?

Basically this article from HBR summarises it well http://hbr.harvardbusiness.org/2009/04/whats-your-google-strategy/ar/1 (login).

The OS is a platform play and its like a three-legged stool - the OEM, the Consumer and the developer.

 On one side is the OEM that ships an OS with its hardware. In many respects they don’t care - an OS is a cost and if its USD15 for Windows XP, or the slated USD 45-55 for Windows 7 they don’t care - except if they start missing price points. But if its free then that’s even better ( as long as support is OK etc). These are Net-book prices for comparison.

The consumer cares about what software they can run. So Windows XP/7 will have an advantage if the consumer has Windows apps, like office etc. If the consumer runs everything through a browser then it likely does not matter. However, there are many utilities such as the Camera software that ships with your new digital that is developed for a PC and Mac only today. Similarly in corporation, if all the applications are browser enabled then Chrome OS may well find a home where a locked down Net-book with ‘free’ software bought in lots of 1,000’s will save money.

So the last part is the developer. They write commercial software to make money. There are some small changes in the market dynamics with iPhone and various other ‘open platforms’ where this changes a little, but at the end of the day its about time/effort and return. For example will Canon migrate the tools for my Camera onto a Chrome OS enabled cloud application - if not, will I buy a Net-book running Chrome or Windows 7?

So to succeed Google needs developers to migrate lots of apps into a cloud solution, sell consumers of the ease of moving their data and convincing them that the OS is capable, flexible and valuable, even if it is free. Then the OEMs will ship and cut their costs. Most of the press has been writing about the short term impact of this announcement - but the real impact may be some time away - maybe Windows 8 time-frame - or 5 years from now.

Truth in blogging - in the distant past I was a Windows product manager. So this will absolutely be the three ways that Microsoft will work, Google needs to do it better to leverage the price advantage.