You can’t help but notice the speed at which technological change moves these days, and no matter how fast, the difference between what you want and what you get. Technological change doesn’t move quite as fast as consumer expectations, but almost. But today “almost” isn’t good enough for consumers, and the difference between meeting expectations and almost meeting them is huge. Really huge. So different brands look to meet expectations in different ways
Take smartphones, a category where consumer expectations have moved up more than 28% over the past 4 years. What caused that jump? Well, different things. Some emotional, and some rational, but mostly emotional things. Things like a desire for greater speed so you can manage your life better, and more apps so you can have fun and manage your life at the same time. Or an interesting design and new technologies nobody else has, like biometrics, because you are an in-the-know trend leader, provides a pride of ownership, or just need really, really high levels of security, or think you do. Our surveys show that most smartphone brands have been able to keep up with these expectations on average about 10%, so there’s a gap between what consumers want and what brands provide and, thus, an opportunity for a smart brand that appreciates the difference. And that’s not all. When you factor in the more rational aspects of consumerism, like price and value, and perceived brand value and the brand’s ability to serve as a surrogate for added value, it’s even more different, and requires different brand management and strategies.
Apple, one of the category’s trendsetting leaders, has been able to keep up with consumer expectations by about 12%, so a little ahead of the pack and not bad when you remember that real consumer expectations are unconstrained by reality and don’t have to actually be worked out in a laboratory bunker someplace in Cupertino, CA. Anyway, to try and meet these different and growing expectations, Apple is trying something different. More accurately two “differents,” and just introduced two new iPhones – the 5S and 5C.
The new 5S has a faster processor and a fingerprint scanner, so that’s different. The 5C, on the other hand, is priced at $99 (with a service contract) and is pretty much a repackaged iPhone 5, but the lower pricing is a different strategy for Apple. Now, for all those consumers who have hungered for an Apple iPhone but couldn’t manage the dough, it’s currently On Sale.
It’s a different story for RIM’s Blackberry. Four years ago RIM was category leader with a 41% share of the OS market and more than 50% of the market for phones that could browse the web and send emails. Not anymore. They’ve put up a “For Sale” sign.
Why? Well, the short explanation is consumer delight turned to expectation. The longer explanation can be found in the smartphone emotional engagement assessments in our January 2013 Customer Loyalty Engagement Index. Blackberry showed up at the very bottom of the rankings and significantly lower than those very high expectations consumers held for the category Ideal. Their long-delayed Blackberry 10 didn’t do it for consumers, even with a Super Bowl commercial, and their loss of corporate and governmental clients didn’t help. The current Q2’13 estimates have Apple at a 40% share of the smartphone marketplace, Samsung with 25%, and HTC and Motorola at about 9% each. Although 9% is looking pretty good to RIM right about now — that’s what they had last year. This year, alas, it’s about 3%, down again.
This July, RIM CEO, Thorsten Heins, told shareholders, “. . .from my personal experience visiting a lot of countries, it is a challenge in the U.S,” a kind-of corporate-speak for “darn all you U.S. consumers and your high expectations!” At the time Mr. Heins also indicated, “We will take this challenge on,” corporate-speak for “we have no idea what you expect.” So last month Blackberry hired J.P. Morgan Chase to explore “strategic alternatives,” which we’re pretty sure is corporate-speak for “we’re-for-sale-and-will-consider-any-reasonable-offer.” Companies like Lenovo, Microsoft, and Samsung have been mentioned in the press as potential buyers, but one has to wonder if RIM would be sold off for parts, or – given their exceptionally low levels of emotional brand engagement – whether Blackberry is so damaged it would end up having to be jettisoned. Remember Palm?
In all Brand Keys surveys, for all categories, customer expectations continue to rise as consumers continue to want more and more and more. Marketers need to pay particular attention to the incontrovertible fact that here’s a big difference between brands that are able to meet customer expectations, and those that can’t.
Kind of like the difference between being “On Sale” and “For Sale.”
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