Saturday, July 15, 2006
Did brand positioning change with Web 2.0 ?
Coming back on how Dell is managing its customer service and the negative buzz happening in the U.S.- see Don't you ever get Dell'd - , marketers should consider these emerging opinion bloggers as a clear indication of a brand perception shift and act upon it. As Business Week is reporting, Dell strategy is shifting from cost efficiency and constrained DSO, as outlined in this finance report, to improving customer satisfaction as "In 2005, Dell's customer satisfaction rating fell 6.3% to a score of 74 in the Michigan ranking, the steepest decline in the industry" reports Business Week.
But this week has signaled analyst concerns over the PC industry in the U.S., and especially pointed out Dell (DELL) and Apple (AAPL) which respective shares fell more than 4% and less than 5% respectively. Apple is suffering iPod new version tech delays, as Microsoft (MSFT) for its long awaited Windows Vista, but Dell "continues to be impacted by competition and adverse mix shifts within the PC market." says UBS investment research and is loosing shares to its competitors. Check here for a one year stock performance comparison.
The question is what is the best positioning dimension for a brand operating in such a mass market environment: operational excellence, product leadership, or customer intimacy ? - coming back on the Value Disciplines Model highlighted by Michael Treacy & Fred Wiersema in The Discipline of Market Leaders. If we're only looking at stock performance over 5 years of DELL, Microsoft and Intuit (INTU) clearly representing the 3 dimensions, the answer seems obvious : customer intimacy wins in the long term.
Then you would object, to put it more nicely than "I tend to object", take a look at Apple stock compared to this and you'll get a different perspective. I know some would even say Microsoft is not positioned as a product leader but I don't want to get into this discussion being too much biased myself. Apple has been surfing on innovation and design to significantly go beyond customers expectations with iPod. But what Apple added to that Steve Jobs special cocktail of his is an excellent way of managing positive buzz in the market, especially on the web.
These thoughts would benefit from a longer debate here or in a longer post, but for now I'd like to just strongly believe that the social implications of Web 2.0 technologies didn't change Treacy and Wieserma analysis. Whatever the market you're into, whatever the nature of your business, you need to find out for your brand what is the best positioning dimension among these three: operational excellence, product leadership, or customer intimacy. Marketers subscribing to Marketing 2.0 need to incorporate new ways of sensing the market pulses and their customers brand perception in order to make that decision and leverage Web 2.0 technologies to embed new marketing tactics for buzz management in their marketing plans. The most difficult thing I believe will not be to harness these new techniques, but to do it with transparency and honesty in their corporate communication. Not doing it, will get you Dell'd.