One of the reasons that I left my cushy job at Leo Burnett to co-found MotiveQuest was the launch of the Handspring Treo. We had shown the client some brilliant ads, which the Treo folks loved but didn't need because online forum discussion had created an environment where demand for the phone outstripped supply.
|Changes in brand advocacy, from Q1 2007 to Q2 2008.|
What Treo, and others such as Blackberry, had realized is that people don't just want to make calls on their phones anymore. They're looking for something more. They're looking for hand-held computers. That trend, fueled by online advocacy, began to eat away at the big phone makers' hold on the cellular category. Between first quarter 2005 and fourth quarter 2007 the share of the cellular market owned by Motorola, Samsung, Nokia and LG, collectively, dropped from 85% to 75%.
Blindsided by Apple: The iPhone, which hardly needs an introduction, made a big splash with its 2007 launch, but the seeds were sown for the demise of the big phone brands several years before that. Had they been listening to consumer chatter online, they might have seen it coming.
|Words most correlated with "cool," June 2005 vs. June 2007.|
One way to look at this is through an analysis of word associations, with "cool" acting as a good barometer for seeing how consumer sentiment changes. Not long ago, "cool" in cellphones meant thin and sleek, and beautiful devices like the Razr made their debut. However, as in fashion, what is cool is constantly changing and the new cool device is useful, interactive and personal. The definition of "cool" has shifted to something more technologically innovative -- that is why when Apple tore down the boundaries and redrew them, it focused as much on the software as the hardware, turning communication devices into computers.
Online advocacy powered this shift: Only a small group of people was interested in the pain of being a bleeding-edge hand-held-computer buyer but they saw past the challenges and evangelized the new idea. Here's one consumer responding to a criticism that the iPhone disappointed: "I think a lot of you guys are missing the point of what this phone does and what it is intended for. ... It has clearly been marketed as a consumer phone that caters to the typical Apple customer who wants to be productive ... but in a fun way!"
Motorola, with its "Q" smart phone, and other big brands put their best foot forward but stumbled, missing the idea. They tried to create a thin smart phone. But what people were looking for was a smarter smart phone. This was not a phone with features; it was an interactive device in which software mattered more than hardware. What Motorola should have done was bought a really good software company. Instead, it watched as share declined. Here's another consumer on the second generation of the Razr: "The Razr2 is a great upgrade to an existing line and yes, it delivers on the media monster promise. But I would never consider it a competitor to the iPhone. The iPhone delivers a whole new way to navigate through files, contacts and voice mails! Now that is wickedly cool."
|Motorola's online advocacy and share each tumbled even before the iPhone arrived. The advocacy drop predicted the sales decline in Q1 2006.|
What's next? In order to really thrive in the new world, old phone brands and carriers need to wave goodbye to the phone-based business model and get a new plan. Shopping for a new phone has become as complex as shopping for a new computer. This revolution really hurts brands that focus on hardware over software. In this new world, brands like AT&T need to take a page out of Best Buy's book and hire in their own Geek Squad equivalent to sell the services people need.
Brands like Nokia and Motorola need to hire the best and the brightest from the computer industry to make their software as trendy as their hardware. Give people something remarkable to talk about. And, of course, the advocates need to keep shouting as buyers listen and leap into frenzied action.
|ABOUT THE AUTHOR|
David Rabjohns is founder-CEO of MotiveQuest, a word-of-mouth consultancy headquartered in Evanston, Ill. Prior to founding MotiveQuest he was executive VP-director of brand planning at Leo Burnett and also worked at Saatchi, PepsiCo and IBM.
The real story here, though, is not the Apple iPhone. It's that the big four, especially Motorola, could have seen this coming. When Apple arrived on the scene with a $600 phone, the pump was primed and people bit the bait. Apple gained a 3.2% market share in 2007 alone -- at $600 a phone. If rivals had been listening to their customers, they could have had a two-year jump on Apple and they wouldn't be licking their wounds today.
Methodology: The rankings were developed by looking at the top general cellular forums, blogs and newsgroups. The Online Promoter Score takes into consideration a wide variety of key drivers and was developed jointly by MotiveQuest and Northwestern University and has been shown to correlate with share.