It is only a matter of time and success rate, before competition will re-engineer the functionality of your new product or service and bring to the market a newer, shinier, and more affordable offering. When that happens your market share growth stumbles and starts to decline, price pressure starts to erode profit margin, and your brand becomes an also-ran instead of a leader. It is a much more complicated undertaking to re-engineer customer experience, but it can happen too if you don’t pay attention to the market landscape. Let me offer a couple examples:
- Dyson introduced to the market easily maneuverable vacuum cleaners that offered revolutionary design, much more functionality (“appropriate amount of suction”), and panache advertising messaging for a premium price. Its inventor was knighted (Sir James Dyson) and became a celebrity. However, after a few years of Dyson leading their segment of the market and winning patent battles against “wannabe” competitors, Euro-Pro came out with Shark vacuum models that performed as well or better at the lower price than Dyson. As a former customer of Dyson, I cannot re-call anything special about my experience of owning their product.
The best part of it was the experience of being a Bed, Bath and Beyond customer—and that is where I bought my new Shark at the half of the Dyson’s vacuum price. Now, Hoover and others are coming to market with comparable products that force Dyson to bring lower priced models.
2. A more controversial example involves a “religious” icon – the iPhone. Once a gift of elegance and simplicity, it used to be the gold standard in a product category it arguably created. The committed base of Apple fans, standing in line for days to get their hands on a new model, propelled iPhone consumer expectations for customer experience to previously unseen heights. While iPhone dominated the market for early adopters of technology, mass market participants failed to see an overwhelming difference in experience between iOS and Android products that would justify the price deferential and high expectations.
Even the latest flagship model (5S) continues the pattern of disappointment with Customer Support. And while iPhone 5S leads the segment (flagship models) today with social NPS® score 53, it is below HTC One in terms of reliability (19% above average), and below Samsung Galaxy S4 in terms of audio experience, design and video quality (23%, 34% and 15% above average respectively). It is not surprising that iPhone market share is shrinking from quarter to quarter.
”The iPhone’s share of the smartphone market peaked at nearly 24% in the holiday quarter of 2011, according to research firm Gartner. But Apple’s share dropped to 21% the next holiday season, and again to 14% last quarter. Android dominates the market with a 79% share.”
The loss of market share is not caused by Apple’s failure to bring a quality product to the market. It is caused by Apple’s failure to live up to expectations of customer experience it has created.
As functions and features of products become more commoditized, the holistic customer experience of dealing with your brand becomes the real differentiator in the market place. It cannot easily be infringed upon, reverse engineered, or acquired by competitors. And if you embrace customer centricity as a long-term strategy for your brand management, the customers will embrace your brand as the first and only choice for them.