I'm pleased to announce the launch of a new web page on Forrester.com that is devoted to a key theme for the Consumer Product Strategy role: the Convenience Quotient (CQ). Regular readers of this blog and of Forrester's CPS research will be familiar with CQ. Now there is a single web resource for everything related to CQ: the methodology, why it's important, how it can be useful, what the standard deliverables are for a CQ project, and some of the possible add-ons to a CQ project. It's also the most convenient (!) place to access all of our CQ reports, which provide a transparent look at the development of CQ scorecards for various services, products, channels and markets.
For the uninitiated, I invite you to click on the link above and explore the CQ consulting offering and our published reports.
Intrigued by what you've read? Contact your AM or consulting@forrester.com and set up an Inquiry to talk it through.
(Quick pop trivia quiz: What 1988 movie is that line from, and which current TV actor said it? Answer below.)
Our new US Internet Access Forecast is complete, and I've just published a short report highlighting some of the key findings. In particular:
Nearly 16 million new broadband subscribers will emerge over the next five years, but more than half of those will come in the next two years. Broadband service providers have 2 years before they
face a severe drought in terms of revenue growth, and thus need to prepare now for the next stage of growth.
Fiber to the home (FTTH) subscriptions will rise from 4% today to 10% of US online households. Verizon's bet on future-proofing its network by taking fiber all the way into the consumer's home will continue to pay off, but Verizon will continue to cannibalize its own DSL subscribers along the way.
Consumers will migrate into faster broadband speed tiers. Some of this movement will come by choice as consumers engaged in high-bandwidth activities look for a better online experience. But some providers will force consumers into faster speed tiers simply because they have no interest in offering slower service.
Dial-up goes gentle into that good night. Dramatic declines will continue over the next two years, after which the dial-up candle will continue to flicker and fade -- unless the access providers snuff it out themselves.
JupiterView clients will find more specifics in the report with regard to these subjects and some of the underlying data as well. As always, ForecastView clients have even greater access to the nuts-and-bolts of the forecast model, as well as further details by access platform and household demographics.
(Pop trivia answer: The movie was "Heathers," a classic yet very black comedy about
high school life in suburban Ohio. The actor? Christian Slater.)
That was the title of colleague James McQuivey’s track session here are
Forrester’s Consumer Forum in Chicago.For
those unable to attend, here’s a quick synopsis of what James covered:
While attendees may think
they have had enough of the term – and the concept of – “multi-channel,” the
truth is that multi-channel has only just begun.It’s not just in-person vs. phone vs. online.The mobile channel is prominent today, and we’ve
got new options coming, like connected TVs, that won’t emerge for another year
or more.
James’s theme is this:Your
product or service is never more convenient than the channels through which
people access it.And convenience is
bigger than you think.It’s not a need
or feature – it’s a measure of how well your features provide consumer
benefits.Regular readers of this blog
will know that we at Forrester have captured the notion of convenience in the
following equation
Convenience Quotient = Benefits –
Barriers
The overarching concept of convenience is addressed in a Big Idea
report by James, called “Cracking The Convenience Code.”I applied the CQ methodology to customer
service channels in my report entitled, “Enhance Your Product Strategy With
Convenient Customer Service.”James
reviewed these various channels – such as email, FAQs, online chat, live agent
on the phone (among others) – and described how a simple benefits vs. barriers
framework could be developed and scored by each member of the audience based on
their own particular situation.
Once done, the question to be asked is this:How do we prioritize channels with
convenience in mind?The answer: use
your CQ scorecard to:
Pinpoint channels that deliver value – focus here!
(Benefits > Barriers)
ID channels that are more pain than they are
worth – abandon? (Benefits < Barriers)
Look for complementary channels (whereby
consumers can get all the benefits by switching channels)
Channel synchronization is another key goal.But keep in mind that:
No single channel is barrier-free
Sometimes the most convenient experience can only happen across multiple channels
Synchronized channel experiences allow people to
jump from channel to channel, cherry-picking the benefits without enduring the
barriers – and that’s a good thing
All in all, a great session.For
more information on CQ, including links to all of Forrester’s CQ research, please
see the new CQ web page on Forrester.com at the following link:http://www.forrester.com/CPS/ConvenienceQuotient
Yesterday, Verizon told the world that its Hub VoIP phone was being discontinued, effective immediately. And I use the phrase "told the world" loosely, because I don't think too many people were really listening. I offered up my thoughts on the this very blog when the Hub debuted. My take at that time was despite the features and functions the Hub offered, all that mattered was price:
Sure, there is added value with all the interesting things
the Hub can do. And the Hub arguably improves the overall end-user experience
of fixed voice by improving the convenience of managing communications in the
home. But the adoption curve of the Hub will remain particularly shallow in the
current economy until such time as the up-front cash outlay for the device and
handsets is reduced. Dropping the
monthly recurring fee to bring it in line with other over-the-top VoIP services
and below the going rate for cable voice service wouldn’t hurt, either.
But this isn't an I-told-you-so post. (Ok, maybe just a little.) What this is is a wake-up call to consumer product strategy professionals, because what happened to the Verizon Hub is your biggest nightmare. It's a huge failure, if you think about it. Here's a product that surely
required loads of time for development, both on the hardware and
software side. It involved buy-in from management from Verizon Corporate, because the Hub had the potential to cannibalize Verizon's core fixed voice subscriber base. Its debut generated rumors for months prior to launch.
It didn't launch with huge fanfare, but Verizon thought enough of the
product to have a parade of industry analysts come in for demos and a
pitch. Yet here we are, eight months later and the product is in the
garbage can.
What could Verizon have done differently? Perhaps a lot of things, but let's keep it simple and think about this from two points in time through the product strategy lens. During development of the Hub, Verizon must have held a strong belief that the Hub would satisfy some consumer needs around in-home communications. But what needs weren't being met with consumer's existing options? Did existing market research or custom surveys reveal those needs? Were those theories tested, and how? Ultimately, we must ask: Did Verizon do enough research prior to launch to ensure the product's success?
Regardless, the decision was made that the product was viable, it was developed, and it launched. After the product hit the market, Verizon certainly recognized that it wasn't doing as well as the company hoped. To help, Verizon rolled out new widgets that increased the list of features the Hub offered, apparently thinking that if more alleged benefits were added, consumers would be more interested in buying the product. But Forrester believes (1) a feature is not the same thing as a benefit; and (2) the success of a product has just as much to do with a product's barriers to adoption as it does with the benefits the product offers. Here, Verizon appears to have spent too many resources trying to enhance what it thought were the benefits of the device -- which may or may not have satisfied actual consumer needs -- instead of trying to reduce the barriers to adoption. (A high cost is only one barrier to adoption, but in this case it's a critically important one.)
Hopefully, readers of this blog are already familiar with Forrester's Convenience Quotient methodology. If you are, then you'll remember that we strongly believe in the role that convenience plays in determining the potential for mass adoption of a product. The base concept of our Convenience Quotient analysis -- that convenience is determined by the benefits a product offers, diminished by the barriers to the product's adoption -- is something that should be considered throughout the product lifecycle. Would it have saved the Hub? We'll never know. Hopefully you won't find yourself asking the same question one day.
Today Verizon announced a new customer service channel for its FiOS subscribers. Dubbed "Verizon In-Home Agent," it's a desktop application that gives customers access to the type of back-office functions that typically require a call to a customer service agent. Customers can use the tool to set up email accounts, configure a PC to work on a home network, upgrade TV channel packages, or modify phone or voice mail features, among other things.
When it comes to customer service, Verizon has just upped the ante on convenience. As noted in my recent Convenience Quotient report on customer service, Web self-service is a popular method for consumers to resolve customer service issues, but FAQs/search, email and online chat have their own drawbacks. Here, Verizon gives consumers the control and the content to resolve their own service issues without involving the company at all, if they wish. That's a huge benefit to some consumers -- not to mention Verizon -- although less tech-savvy consumers may be hesitant to use the In-Home Agent no matter how simple Verizon claims it to be.
Moreover, in certain circumstances, the application may actually drive higher revenue. Giving consumers direct control over their accounts will allow them to upgrade channel tiers or broadband speeds without involving customer service. That's nice and all, but wouldn't it be even better to take advantage of consumers' impulsive tendencies? How about enabling short-term "on-demand" access to channels or faster broadband when consumers need or want it? That way they can spend $3 to watch the English Premier League match, or $5 to watch a movie on HBO Family, or $2 to boost upload speeds for 15 minutes when posting vacation photos on Facebook. This will only work, though, if the experience delivers tangible benefits with few barriers to adoption -- the very definition of convenience, in Forrester's view.
Customer service has become an integral part of product strategy, and, as such, it should now be a primary concern of consumer product strategy professionals. Customer service has also grown more complex: Consumers used to simply bring the product back to the store from which they purchased it or call a toll-free number to obtain service. More customer service options now exist, including email, IVR, and online chat. Moving customer service online is a double-edged sword — it's expensive to provide effective online solutions, yet the more customers move to them, the lower the costs. We apply our Convenience Quotient methodology to various forms of customer service and find that nothing beats having a live person on a phone line available for troubleshooting. Other methods offer their own mixes of benefits and barriers to consumers. Consumer product strategists should think of customer service, in whatever guise, as a critical product attribute and weave their choice of interaction directly into their overall product strategies.
I evaluated a variety of channels by which customer service issues can be resolved, as well as some indirect alternatives such as leaving the issue unresolved ("do nothing") or buying a new product or churning to a different service rather than working with the company toward resolution. Here's a "sneak peek" at how the results came out:
There are a few key points I'd like to raise with regard to this report:
The report crosses all B2C industries. Unlike other CQ analyses we have conducted, this one addresses a horizontal business issue that affects all businesses with a consumer-facing product or service. CQ is not just for tech products or industries!
The scorecard and the results are relevant but also generic. We did not assume any particular industry, company, or customer service issue when applying the CQ methodology in the report. We expect the barriers and benefits for the various customer service resolution modes to vary by company and by industry.
This is a JupiterView report. Our JupiterView clients now have access to a CQ document, with plenty of background discussion to bring them up to speed on this new research series.
Take a look at the report, think it over, then set up an Inquiry so we can figure out how it applies to your business and what actions you can take to assess or improve customer service from the perspective of consumer convenience.
We're finally seeing consumers embrace computing on the go —
whether it's experimentation with Net access and application downloads on the
iPhone or trying out inexpensive netbooks, the past 18 months have seen an
explosion in activity and functionality. As is always the case with new consumer
product opportunities though, mistakes have been and will continue to be made; a
Convenience Quotient analysis of portable computing platforms shows how the
various feasible options stack up. Tellingly, laptops still just squeeze out the
competition overall, but smartphones and the next generation of netbooks
threatened to steal the crown — particularly when focusing on specific
consumer scenarios like high mobility or engagement with social media.
It's an intriguing report, but don't just take my word for it: James Kendrick over at jkOnTheRun posted a nice piece about this report as well, and other media outlets have been banging on our door.
Clients: Paul would welcome the opportunity to discuss this report with you -- just follow the normal process for setting up an inquiry.
Also: We've got other CQ docs in the works, and we'll be sure to let you know when they publish. CQ isn't just for tech products, either. My forthcoming CQ document applies the methodology to customer service, by examining the consumer benefits and barriers associated with various modes of resolving a customer service issue (live phone, email, online chat, etc.).
Do you have questions about Convenience Quotient, or need help understanding how it could be useful for developing your own product strategy? If so, please reach out to me, James McQuivey or J.P. Gownder. We'd be happy to help you figure it out.
Yesterday, Cablevision announced the roll-out of its new Optimum Online Ultra broadband service, with speeds of 101 Mbps downstream/15 Mbps upstream for $99.95 without a bundle. There is a lot to like about this announcement:
Significant speed increase: Cablevision already offered a 30 Mbps tier, so offering a 50 or 60 Mbps tier would have been a marginal improvement in the consumer's experience. By leapfrogging to the 101/15 tier, Cablevision can now boast of a greater than 3X improvement in the end user experience.
Attractive pricing for wideband: The sub-$100 price point without a bundle is in line with or below other carriers' 50 Mbps speed tier offer. Yes, it's more than what most consumers are willing to pay for today, but it should give pause to Cablevision customers thinking of switching to Verizon's FiOS 50/20 tier.
Fantastic marketing strategy: Not only does Cablevision get to wear the Fastest Download Speed crown for the time being, but it's decision to offer 101 Mbps instead of 100 Mbps is downright brilliant. This "Price Is Right" strategy may allow them to keep the title longer, as competitors eyeing the 100 Mbps tier will now be forced to rethink whether they stick with 100, match the 101 (which would look a bit silly), or jump to 110 or 120 in order to differentiate themselves.
Just having a wideband offer is beneficial, but will consumers buy it? That's the subject of a recent report I wrote entitled "The Shift From Broadband To Wideband," which M&SView and JupView clients can find here on the Forrester.com website. I will be delivering a Teleconference on this topic on Wednesday, May 13 at 11am EST. M&SView and JupView clients can register for it here. Hope to see you there!
On February 1, Verizon Wireless (VZW) debuted its new Hub VoIP
phone. I had the chance to
meet with some of the guys at VZW who developed the Hub to see a demo and play with the
device.
The product is a 7-inch touchscreen display and a single cordless
handset that is designed to be the center of communications for the home. It goes for $200 after $50 rebate (with a
two-year contract), and additional cordless handsets are available for $80
each. You can connect to the Internet
using any cable or DSL broadband service via an Ethernet or wireless connection. While the Hub is carrier-agnostic for
broadband, it is only currently being made available to VZW customers (although
that may change in the future).
Once connected, users can place and receive unlimited local
and long distance phone calls to anywhere in the US, Canada and Puerto Rico
using the “unmanaged” over-the-top VoIP service for a monthly fee of $34.99. That’s $10 per month more than leading
over-the-top provider Vonage, but roughly on par with bundle-discounted
“managed” VoIP service from most cable MSOs.
I could go on about the interesting features and
functionality of the Hub device, such as visual voicemail, photo viewing, and
directory services with mapping technology. I could describe in great detail the integration with Verizon Wireless
services like VZ Navigator (sending turn-by-turn directions to your mobile
phone from the Hub), VCast (watching video clips in the kitchen while making
dinner), and Chaperone (to easily track the location of your kids’ cell
phones). I could also note the
drawbacks, such as the “walled garden” approach to content, the inability to
access the Internet itself even in a limited manner, and the lack of a
Chumby-like open platform for developers to build their own widgets. But at
this point in time, I don’t think those things matter.
What does matter in today’s economy is cost. A majority of consumers claim their financial
situation has gotten slightly or substantially worse over the past 12 months,
and an even greater portion believe their financial situation will remain the
same or become worse over the next 12 months. As I have discussed in a couple of recentreports,
our data indicates that fixed voice service is particularly vulnerable to
cost-cutting measures. (If anyone is aware of the impact of cord-cutting, it
would be Verizon and Verizon Wireless.) To charge $200 dollars for the privilege of acquiring the device, and
another $160 to $320 to obtain 2 to 4 more handsets to outfit the (targeted)
busy family household is simply asking too much from today’s consumer. And adding $34.99 per month on top of that
means chances are high that a customer switching from their fixed voice service
to the Hub may result in very little or no actual savings in the monthly
budget. Oh, and there is an early termination fee to boot.
Sure, there is added value with all the interesting things
the Hub can do. And the Hub arguably improves the overall end-user experience
of fixed voice by improving the convenience of managing communications in the
home. But the adoption curve of the Hub will remain particularly shallow in the
current economy until such time as the up-front cash outlay for the device and
handsets is reduced. Dropping the
monthly recurring fee to bring it in line with other over-the-top VoIP services
and below the going rate for cable voice service wouldn’t hurt, either.
I agree that service providers need to look for ways to
enhance the value of landline to stem the loss of subscribers (see this report
published in the fall). But consumers
are cutting the cord to save money and increase convenience. Service providers need to keep both of those
criteria in mind when positioning any enhanced landline product in the market.
What do you think? Will the Hub succeed or fail, and why? Would you buy one?
The focus here is on wireless Internet access, but home service is offered too. Here are the breakdowns:
Home: $25 per month for six months, $35 thereafter. Twenty-five dollars is a steal, and even $35 is pretty aggressive, particularly for a standalone service (that is, not bundled with voice like DSL or TV like cable modem service). Must purchase a (Krups-inspired) WiMAX modem for $80.
On-the-Go: $30 per month for six months, $45 thereafter. Must purchase a data card, or forthcoming WiMAX-enabled laptop or other device.
Daily On-the-Go: $10 per day, for use with WiMAX data card, laptop or device.
Pick 2: $50 for six months, $65 thereafter. Connect two WiMAX devices, which could include the WiMAX modem for home use and a data card for mobile use. This of course raises the question as to how strong the WiMAX signal is indoors, such that a separate WiMAX modem would be necessary if you activated a data card.
XOHM calls itself "a wireless alternative to basic DSL and Cable internet service," offering download speeds of between 2 and 4 Mbps, and upload speeds of .5 to 1.5 Mbps, yet performance and coverage are not guaranteed. Compared with other mobile data services, that's pretty quick, yet those speeds are pretty utilitarian when considered as a fixed broadband substitute, particularly as BSPs have been upgrading their networks to deliver ever-faster broadband speeds.
Still, some may find the value of mobility to trump the quality. Think of the millions of wireless-only consumers out there who have dumped landlines in favor of exclusive cell phone use, despite the comparatively horrendous quality. For cord cutters, a fixed landline offers poor value because it is, um, fixed, whereas a cell phone can be used at home and away. The same principle could apply for a WiMAX connection, depending on the coverage issue.
Interesting side note: The modem has two RJ-11 analog VoIP ATA ports, which are designated as "inactive, for future use." Someone in the multi-headed XOHM organization must not find cord-cutters to be the target market...
