Tuesday, November 23, 2010

Software Updates As A Brand Loyalty Tool For High Tech Companies

Every time we have to replace a product, our loyalty is tested. It’s not a painful test when the product is a box of cornflakes, but it is when it’s a consumer electronics gadget costing several hundred dollars — and when it has grown obsolete before it has worn out.
Now this technique must be handled with care. Indeed, I am the first to be upset while a software asks me constantly to update. Hence, it seems I am constantly spending times turning off and on my computer because this or that company has made updates.

But this article gives a particular senses, while we are considering how Apple managed the launch of its new Iphone version, in order to keep customers loyal and happy.

When it introduced the iPhone 4, for example, it said the phone would have new operating system software, giving it more powers than earlier models. That might have been an incentive to dump the old phone and to buy the new one. Especially because the investment is high on a short period of time to get the new Iphone version. As premium buyers which spent large amount of money (compared to other cell phones) to get the old version, you can’t disappoint them and assume they’ll get every 6 month a new version.
But Apple also downloaded the same software to the previous year’s model, the iPhone 3 GS. Suddenly, that old phone could run an application in the background while another app was being used, apps could be organized into folders, and users gained access to Apple’s new electronic bookstore. Without having to spend a dime, people got what was essentially a brand new phone, one that could do nearly everything the newer model could do.
Was this a stupid move by the company? To the contrary. Apple still offered incentives to buy a new phone, but those enticements were built into the hardware, like a front-facing camera so a user can make video phone calls. While Apple’s existing customers were locked into contracts, they didn’t need to spend the duration seething with envy and resentment. (Well, some people seethed because they thought it made their phones slower or buggier.)
“It’s delightful for the consumer when they turn on a device and it has all this new functionality that it didn’t have before,” says Sarah Rotman Epps, a consumer products strategy analyst at Forrester, the market research firm. Apple is expected to upgrade the cellphone software again this month.

This is actually a “web 2.0” illness: Companies have thrilled on proposing incomplete services and constantly improving to get a final proposition. It may also be called the “beta syndrome”. Because some companies are in “beta” for years which is an absolute non sense. .
Especially in a world where technology evolves so fast, there is no way you will have a finite version as the product will constantly evolve.

I am not sure actually we may talk about brand loyalty for this occasion, but what is sure is that while you launch a new version of your software, it is important you also propose an update for your former customers, in order to:
Keep them happy with the old system
Show them a teaser of what they may get with the new version
Keep in touch with them in order to get chances to convert them in a near future to the new version.