As a user experience practitioner, I'm gratified and flattered by the suggestion that experience has become a source of competitive advantage; but as a rational individual, I can't accept that this is always so. It seems to me that the competitive value of experience depends heavily upon the position of a given product in the product life cycle - specifically, that experience is a source of competitive advantage for a mature product in a mature market, but it is not necessarily an advantage at other stages.
Introduction: Availability
When a new product is minted, competitive advantage goes to the firm that makes it available. The choice customers have is to buy from the only firm that supplies it or do without because there is no other source from which it is available.
That may seem simple, but the challenge to getting customers to adopt the product is to convince them that "or do without" is a problem they really need to solve. There are many products that are aggressively promoted on late-night infomercials and home shopping channels that customers can do without.
Insofar as competitive advantage is concerned, there is no pressure on the supplier to do anything more - except the concern that other firms will enter the market and begin offering the same product, which transitions to the next phase.
Growth: Features
As demand for a product grows and more suppliers enter the market to offer it, competitive advantage often comes down to added features: you can get an alarm clock from a number of firms, but only our firm offers a combination clock-radio. When other firms add the radio feature, competitive advantage goes to the firm that offers a snooze alarm.
In essence, the nature of competition is still availability - but it's the availability of a product that has certain features that others lack. And having those features make it unique, until a competitor adds them as well. It becomes a war of ongoing escalation.
Some firms seek competitive advantage for a niche market - by adding features that are geared toward a specific purpose or need - but many simply aggregate features with a desire to accommodate every possible need and maintain as broad a market as possible.
This practice leads to feature-bloat: a product has so many unnecessary bells and whistles that it becomes difficult to use for any specific purpose, and customers get the sense they are paying extra for a lot of features they do not need.
Maturity: Experience
Where a product enters the maturity stage, products become commoditized. Customers (rightly) feel that they can get the same product with the same features from any of a number of providers at roughly the same price.
My sense is that this is the stage at which customer experience becomes a significant factor of competitive advantage. Arguably, it might have been an advantage during the growth stage - in that a given firm might see it as a way to make their product more appealing regardless of whether its features are the same as everyone else's - but it's at the maturity stage where experience becomes the only real method of competition for the majority of firms.
That is, given the homogeneity of features and pricing, customers now consider experience as a differentiating factor: they choose based on which supplier offers the easiest or most pleasant shopping/buying experience, or based on which product provides the greatest experiential (specifically, non-functional) benefits.
My sense is experience is touted in the present market because the majority of products have become stagnant. I can't think of an example of a product I own that would be much improved by additional features ... nor can I think of a product that is presently advertised based on unique features. Could be I'm not trying hard enough, but not a single example comes to mind.
Decline: Tradition?
I include "decline" by way of being comprehensive in covering the entire life cycle - but have to admit that I don't have it worked out. My sense is that a product is in decline not because people no longer have the need that it is designed to fulfill (though it seems possible that it might be so), but because an entirely new product has come along that meets the needs of the consumer in a way that the old product cannot.
It seems to me that the primary selling point for a product in decline is the mere resistance against the selling proposition of its replacement. That is, to suggest to buyers that they can do without the new product because the old product still serves their needs, possibly better and/or more cheaply. For lack of a better term, I'll call this "tradition."
My sense is also that an old product can be revived if it can add the features of a new one, or sell customers on the experiential factors of the product. But so long as sales continue to fall as customers adopt newer solutions, the product will remain in decline.
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This has been a bit of a ramble, a lot of raw thoughts that need further deliberation and consideration - and I think I may be tackling another issue (feature bloat) from an oblique angle.
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