Tesla Recall Offers a Better Way Forward

Tesla-Model-SA possible recall for Tesla may seem like a bad thing, but its quick fix for the offending Model S shows why this savvy car manufacturer is way ahead of its competitors.

After two incidents involving Tesla’s 2013 Model S striking metal objects on highways, causing punctured batteries and fires, the U.S. National Highway Traffic Safety Administration (NHTSA) opened a preliminary evaluation of the car’s safety.

This is a serious concern for Tesla – over the past five decades 390 million cars, trucks, buses, recreational vehicles, motorcycles, and mopeds, have been recalled by the NHTSA.

The impacts of a recall or the threat of a recall are immense. Analysts estimate the financial blowback from Toyota’s 2010 gas pedal global recall could total more than $5 billion. This after a 10-month investigation by NHTSA safety officials absolved the electronics in Toyota vehicles saying driver error was to blame for most of the incidents.

In response to the NHTSA evaluation, Tesla has done something pretty interesting. It’s released an over-the air update that will enable vehicles with the Smart Air Suspension package to automatically adjust the suspension to higher levels at highway speed. Another software update expected this month will give the driver direct control of the air suspension ride height transitions.

In layman’s terms, over-the-air updates mean Tesla owners don’t have to trade in their old cars or take them to the shop to get upgrades installed. Instead, with the use of connected software, drivers get an automatic update.

In this way Tesla is addressing the threat of regulation and delivering product enhancements instantly and at minimal cost.

The use of software to get ahead of the game is not new to the auto industry. As manufacturers are hit with more and more regulation, software can play a key role. Software and sensor driven Engine Control Units (ECU), for example, enable manufacturers to develop engines that comply with Corporate Average Fuel Economy (CAFE) and Environmental Protection Agency (EPA) emissions standards.

Tesla, however, is leading the way with over-the-air updates – made possible with AT&T network chips that also allow for free Internet browsing, navigation, and streaming music.

The “air suspension” update may not satisfy NHTSA regulators and a physical product recall could still happen. But what started as a regulatory threat may in the end validate Tesla’s strategy. Investors seem to think so, Tesla shares were trading up $5.87, or 4.7 percent, to $127.43 in the first hour of trading after the news broke.


Apple Defines the “Holy Trinity” for Product Companies

Apple AdsThere’s been a lot of chatter on the internet recently about Apple’s new ad campaign. Some positive and much of it negative. Author and former Apple ad man Ken Segall hates the ads because they “make customers seem so clueless.” The truth is that most users are clueless about technology, yet Apple needs those same users to buy more Apple products.

In their latest quarterly earnings Apple delivered a rare earnings “disappointment” after sales rose only 23 percent to $35 billion sending its stock down five percent in after-hours trading. When you are a $570 billion company, attracting larger markets and developing new revenue opportunities is everything.

So what is the strategy today? How can Apple continue to innovate, differentiate and justify its price premiums? How can it accelerate the transformation from a company for MacHeads to a company for most?

Let’s start by taking a big step back.

When Steve Jobs introduced the first iMac back in May 1998, the focus was on the product hardware: a G3/233 processor, a 15 inch monitor with 1024 x 768 resolution, 100MB Ethernet, etc.

The punch line to his presentation, and the real differentiator for Apple at the time was the radically different and simple design. The all-in-one package, the translucent candy colored box, the carrying handle. As Jobs described it: “This thing looks like it comes from another planet… a planet with better designers.”

Fast forward nine years and Jobs presents a very different, but additive, perspective on Apple’s unique value. In his May 2007 “All Things Digital” conference interview, Jobs defined Apple products as really just software.

“It’s software in the iPod itself, it’s software on the PC or the Mac, and it’s software in the cloud for the store. And it’s in a beautiful box, but it’s software. If you look at what a Mac is, it’s OS X, right? It’s in a beautiful box, but it’s OS X. And if you look at what an iPhone will hopefully be, it’s software.”

What should we take from this? Yes, you need beautifully designed products, but the innovation, differentiation and value for users is really taking place at the software level.

Now, five years later, Apple is refocusing once again.

These latest Apple ads paint a very different picture of the company. The emphasis is not on beautiful, sleek products or rich but simple software (although they are mentioned in the ads). Rather, it’s on the Genius customer service representative helping users do amazing things with their Apple products better and faster.

What’s Apple really saying about itself in these ads? It’s saying, we not only have the best hardware and software, we also have the best service out there. It’s promoting Genius as a third key value.

Perhaps Apple’s realized that successful products are not only about hardware and software, but also about delivering value throughout the entire lifecycle – including services.

If you are a product company that aspires to be more like Apple, these ads are a good indication of what the tech giant thinks it takes today to deliver differentiated value for users and subsequently for shareholders: product and service delivered seamlessly.

What do you think of Apple’s new focus on service?

The Important Evolution of Engagement From Marketing Fluff to Metric to KPI

There has been a lot of discussion around the topic of engagement; what is it, why does it matter and how do I measure it, and is it marketing fluff or the new standard for measurement. From my research I see a valuable concept being poorly interpreted and executed by some marketers, vendors and agencies.

What is it? To start with a definition, most analysts and bloggers agree on two basic components. The interactions can be either individual or company led, and they are ongoing across every point of contact. These are all the brand interactions with the product, other individuals, customer service, marketing messages, applications, etc. over time, which requires a comprehensive cross-channel measurement algorithm to evaluate.

Engagement is not the “time spent” with your online video or the “number of posts” on your social media site; these metrics are only part of the equation. I agree with the critics who dismiss these “engagement” metrics, but the problem is not with the concept it’s with the current execution of measuring what’s available as opposed to what matters. Which leads us to our second point.

Why does it matter? Technology has exponentially increased the points of contact individuals have with your brand and social technologies have exponentially increased the reach and influence individuals have on each other. We also have the added benefit of being able to track and measure most of these new technology enabled interactions, and improve customer insight by measuring individual’s behavior.

Marketing leverages both quantitative/hard metrics like sales that are generally based on behavior, and qualitative/soft metrics like satisfaction that are generally based on surveys to determine success. Engagement is a new qualitative/soft metric, but is unique in that it is behavior based not survey based, which may deliver a more accurate indication of marketing and business success. If you have any question about the inaccuracies of self-reported survey responses, check out Martin Lindstrom’s new book Buyology, which uses brain scan technology to separate the truths from the lies about why we buy. In addition, the more “social” marketing becomes, the higher degree soft metrics will be needed to generate hard results. Which leads us to our third point.

How do I measure it? A metric is anything that can be consistently measured, like CTRs and time spent, where a KPI is an indicator, agreed upon with your partners that will determine whether you are attaining business success. As a result, engagement measurement cannot be a one-size fits-all because the number and type of interactions varies for every company and the relative weighting or value associated with each interaction in an algorithm will also differ.

Start by identifying all the points of contact individuals can have with your brand before, during and after the buying process. Next identify what measurement mechanisms exist across these points of contact to expose potential data gaps. Third, prioritize the points of contact lacking any measurement mechanisms and create a simple 2X2 matrix based on their value vs. their cost to acquire. Finally, work with your partners to define an algorithm that weights the values of each interaction, measure to define a benchmark, and evaluate your model as an indicator of business success. By discovering specific patterns of behavior across interactions, marketers can measure for their occurrence and proactively drive those indicator actions to occur.

Engagement is not a replacement of but another valuable tool that focuses on the individual’s new and growing number of interactions with a brand to help marketers assess and better influence their buying process. While the road to measurement may be long and hard, the time for action is now.

Does it take Twitter to provide good customer service?

Growing at 1000% with about 10million users and lots of mainstream buzz makes Twitter an attractive platform. However, the real business benefits of Twitter are also clear, immediate conversations with users who choose to follow you.

Many organizations have found success using Twitter for customer support functions. For example, Comcast set up an account called “ComcastCares” that’s dedicated to answering Comcast support questions it detects from monitoring Twitter and Bank of America is answering online banking questions from its customers on Twitter.

While some marketers have found success on Twitter by answering customer questions real-time, they key takeaway is that customer want more immediate and responsive support. So what about the majority of your customers who don’t tweet?

Instead of Twitter companies need to focus on how they can address changing consumer needs and expectations. Two key reasons for this: the micro-blogging fad may fade as quickly as it came and by focusing on consumer needs instead of the latest trends marketers can leverage a variety of channels and technologies to help customers accomplish their goals.

Offering interactive chat on the corporate website, developing a mobile site or application or providing shorter response times for email support are other ways to help keep your customers happy. These existing channels serve a broader audience, provide better analytics and tracking, and allow marketers to better deliver the message and potentially cross-sell.

So, in addition to experimenting authentically with emerging channels, marketers must focus on the customer needs and push these learning’s across marketing channels and consumer touch points.