The Service-To-Device Journey: The Key To Success For Digital Music Product Strategy

I’ve been covering the digital music space for over a decade now and in that time I’ve seen a lot of services and devices come and go. I’ve also seen a lot of lessons learned and there is clearly more choice of high-quality music services and products now than at any stage before. And yet there is one major Achilles' heel which continues to cripple the market: poor service-to-device journeys. We have great services and we have great devices. But we have very few great service and device combinations. Pitifully few companies put anything like enough focus on the service-to-device journey (or if they do, they execute poorly). Just as much effort needs to be invested in ensuring services are fully integrated and optimized for supported devices as in building the services and devices themselves. Otherwise: great device + great service = poor experience. 

So, in the Consumer Product Strategy team at Forrester, we decided to do something about this problem and created a new methodology that will help product strategists build winning service/device combinations.  We call it the Convenience Quotient of Music Experience. For those not familiar with Forrester’s Convenience Quotient, it is based on a very simple equation:

Convenience = benefits – barriers.

We’ve launched the methodology in a new report entitled ‘Which Device Offers The Best Music Experience?’ (And I’ll answer that question in just a moment).

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Is This The End Of Premium Pricing For Hybrid Cars?

Today, Ford announced that the hybrid version of its Lincoln MKZ luxury sedan will carry the same price tag as its gas-only version.

Wow.

Ever since hybrid cars first became available, they have carried a premium price tag, which has in many cases been offset somewhat by tax incentives for the buyer (which ultimately help the manufacturer by driving demand for these new yet up to now pricier vehicles). (Here's a brief rundown of the cost differences between some manufacturers' gas and hybrid models.) Ford's news breaks that model by removing the hybrid pricing premium. But if you add in the consumer tax incentive, the hybrid vehicle now becomes substantially less expensive -- and with better gas mileage, its operational costs should be lower, too. It's a win-win for the consumer. But is it a win-win for Ford? 

Clearly, it's a brave and bold move. By offering price equality between the two models, Ford will raise awareness of the Lincoln brand and (it hopes) drive additional sales, which would lower the overall per-vehicle cost. Also, the tax incentives for hybrid vehicles vary by make and model, and they are phased out by the IRS based upon the quantity of vehicles sold, as reported by the manufacturer. Without the tax incentive, only consumers who drive a LOT of miles would be able to make up the difference in cost for a premium-priced hybrid car based on increased fuel efficiency.

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GM Takes "Co-Creation" Literally

I've been a closet Corvette fan ever since I was a kid.  I went with my step-dad to the Corvette Corral in Bloomington, Illinois every year, admiring the cars on display, marveling at how they changed over time. (I've always been partial to the 1958 model, red with white sidewalls, in case you were wondering.) One thing that became clear to me that continues to this day: Corvette fans aren't just car geeks, they are Corvette geeks. And yesterday, GM gave those fans a gift.

In its announcement, Chevrolet revealed a new strategy for selling its revered Corvette: for an extra $5,800, those who buy a 2011 Z06 (top) or ZR1 (bottom) can go to General Motors' Performance Build Center in Wixom, MI and build the actual LS7 or LS9 engine that will sit in the car they buy.  That doesn't mean they will watch someone build it -- the customer will actually assemble the engine (under the watchful eye of an engine expert, natch).  What makes this possible is the fact that every engine for these cars is already hand-built (something I did not know prior to today). 

As Tom Stephens, GM vice chairman, Global Product Operations put it: “Today's LS7 and LS9 Corvette engines are pinnacle achievements in engineering, and to personally involve our customers in their final creation shows the depth of Chevrolet’s commitment to make lasting connections with the customer.”   

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Social Co-Creation: 9 Benefits And 6 Challenges For Using Social Technologies To Improve Your Products

Forrester has been publishing research on social technologies for several years, much of that being focused on the Interactive Marketing role. Recently, we have expanded our research on social technologies to apply to many other roles, such as Customer Intelligence, Market Research, Customer Experience and eBusiness and Channel Strategy. You can now add Consumer Product Strategy to that list. As our recent panel survey report demonstrates, social technologies are relevant to Consumer Product Strategy (CPS)  professionals as well because they give companies the opportunity to listen to and embrace consumers — and allow them to help create new products and innovate existing products. While the idea of social co-creation has been referenced in Forrester's research reports many times, this concept has not been explored deeply, until now.

In my just-published "Social Co-Creation" report, I define co-creation as "the act of involving consumers directly, and in some cases repeatedly, in the product creation or innovation process." Social technologies like online communities, Facebook, Twitter, company blogs, and Web sites provide CPS professionals with relatively easy access to engaged consumers. Through a combination of listening and embracing, companies can understand what unmet needs exist in the market today, recognize where current products are coming up short, tap the wisdom of the crowd to test ideas, and develop relationships with engaged consumers to drive new concepts into the market. 

Today's Social Technologies Unveil Product Improvement Opportunities

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360-Degree Music Experiences: Use The Cloud To Target Device-Use Orbits

We have just published a new report that is an essential read for anyone working on a cloud-based music product strategy: 360-Degree Music Experiences: Use The Cloud To Target Device-Use Orbits.

The title of the report is important and highlights the key focus of the report: that cloud-based music services should not be some technology-driven rush to deliver music across as many devices as possible but should instead focus on extending and connecting the digital music experience into what we are calling 360-Degree Music Experiences.

The idea of cloud-based music has been with us for a long time (some of you many remember the decade-old concept of The Celestial Jukebox).  Now that technology and connectivity have, to some degree at least, caught up, the cloud is drifting across the digital music marketplace once again.  However, numerous hurdles continue to temper the potential:

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Publishers Need Popcorn, Not Paywalls

Publishers across the world will be keenly scrutinizing the response to The Times’ freshly erected paywall. Tired of giving its expensively acquired content away for free online, News Corp. has decided that users must now pay for it. Are paywalls the answer? They may be an answer — but to the wrong question.

Instead of asking how much more money they can get for the content, companies should be focusing on how that content can help create new revenue streams. It’s a small but crucial difference. The value in a media business lies in its dialogue with consumers. And if a paywall removes 90% of your audience (as Sunday Times editor John Witherow has suggested — and even that may be an underestimate), the challenge becomes even harder. Focusing on the sale of content is missing a trick: Media companies are not actually in the content business; they are in the audience business.

We may speculate as to whether 2%, or 5%, or 10% of Times readers will pay for the paper’s content online in the face of competition from free rivals. We will have to see. But we have plenty of evidence that consumers do spend money online on products and services. Indeed, online news fans are even more likely than the average online user to buy books, tickets, travel, or clothing online. The key is not to monetize the content but to monetize the audience.

The challenge is to really understand that audience and identify the way that compelling content can build a strong relationship, creating new opportunities for monetization elsewhere. In this respect, passion-based products such as Times Plus (or Guardian Extra) that reward keen readers with additional content and offers represent a smarter long-term solution than a simple paywall that drives users into the welcoming arms of your (free) rivals.

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Product Strategists Want Social Innovation

As part of my new research coverage that I'm calling product creation and innovation, I'm looking at big-picture ideas and themes that resonate with product strategists across a wide range of industries.  Sitting at the top of the list is the adoption of social technologies by consumer product strategists: It's a bona fide hot topic that has been critically important within Forrester's other role-based research; it is applicable to a wide range of consumer product and service companies; and it's something that many companies are just getting comfortable with. 

That last point was a hypothesis on our part initially, but we can now confirm it as so. In May of 2010, Forrester surveyed 181 consumer product strategy professionals from companies around the world in order to understand if and how they are currently implementing social strategies in the service of product creation and development. My recent "Product Strategists Want Social Innovation" report reveals the results of that survey, and the title makes no effort to mask the results: the use of social technologies by product strategy professionals is strong but not pervasive, and there are lots of unanswered questions out there.  Some interesting tidbits from that survey include:

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Why Don't More People Drive Hybrids?

See many hybrid vehicles while driving to work or in the parking garage? No? These cars have been sold for more than 10 years, yet adoption is still low. Our consumer data tells us that people are concerned with the environment and that their concern is growing. So why aren't more folks going green and buying up hybrids?

We have tackled that question by applying our Convenience Quotient (CQ) analysis to the concept of green commuting in a metro area -- Boston, in particular. In the recently published report, we looked at various modes of commuting: walking, bicycling, public transportation, car-sharing services, and various self-owned automobiles, including a regular Honda Civic, a Toyota Prius, a Ford Escape hybrid SUV, and the forthcoming Nissan LEAF. We identified three different scenarios for commuters: urban dwellers (within 2 miles of the city center), inner suburban dwellers (within 8 miles of the city center) and outer suburban dwellers (within 16 miles of the city center). We then applied our CQ methodology, defining the benefits of each option as well as the barriers to adoption, and scored each mode of transportation accordingly.

Our findings: The green automobiles delivered a slightly more convenient commuting experience than the Honda Civic, but multiple significant barriers stand in the way of green automobiles being considered convenient green commuting solutions, particularly those associated with cost. Green-specific benefits are also limited, which do not counter-balance the barriers for hybrid and electric cars. We also found that urban consumers have many green alternatives available to them, thus diminishing the attractiveness of using a hybrid car to get to work.

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