Word of Mouth Improves Product Development

As you read this, companies are inviting their best customers (early adopters, loyal customers, power users and blogging evangelists) to review products during the early stages of development. Before PRODUCT X hits shelves, these smart companies know this process will help improve it and give customers exactly what they want. This is more than a controlled focus group where a nearly-cooked product is put through its paces. This approach engages the most vocal word of mouth (WOM) customers and brings them into the development cycle much earlier.

Sam "Dude! You're workin' for Dell!" Decker shows us a model of the WOM company and how WOM lives outside of the marketing realm, increasing its impact on the bottom line and its threat to advertising.

Some companies cringe at the idea of giving a "free-wheeling blogger access to their secret sauce." But I know of several gadget bloggers that relish signing an NDA to access what's next. They follow the NDAs to the letter, give their feedback and wait until word leaks out about PRODUCT X to give an early, effusive insider's review. By having a hand in its development, these influencers become part of the team and give educated insight into the product's finer points.

Decker's model goes beyond product development into capital expense, process improvement, cultural direction, and hiring. It's great to see some sound thoughts, albeit untested, on how WOM lives outside of the marketing world.

tags: word of mouth, Dell, advertising, marketing, product design, WOMMA

Comments

[James Cherkoff]

Marketing has always been about product development - it's one of the 4Ps, the fundamental marketing lesson. It's just that the industry has become obsessed with Promotion. More here....
http://www.collaboratemarketing.com/modernmarketing/2005/06/reboot_the_4ps.html

[Kevin Dugan]

My response to James' post at his site...
--
James: Great post. Maybe what we're seeing here is less one of the four P's dominating and more of an evolution of the customer's role in, and impact on, the four P's.

Skype *should be* defending the product. They're first to market! They live by different rules. Rules that will change when a real competitor emerges in their space. They should also be engaging their most passionate customers in a dialogue. Is this promotion? Not necessarily. Is it product development? Possibly.

Regardless, I do not think any of the P's are dead...just changing. We'll still have marketing-centric companies (P&G) and product/engineering-centric companies (Skype) they'll just work differently with their customers in an age of participation.

Now for a consumer example of how the marketing spend/promotion CAN make an impact, look at Target vs. Wal-Mart. Wal-Mart is the top retailer...their annual revenue makes up more than half of the top 10 retailer's annual revenue. Then there is Target as the fifth largest. Target spends about $100 million more than Wal-Mart on marketing. After a few years of Target making designer products affordable, Wal-Mart is changing its approach to compete with Target.

The product is still crucial in this example, but a very creative approach to marketing, backed by a bigger budget, is making an impact for Target. Why else would Wal-Mart advertise in Vogue?
http://www.usatoday.com/money/industries/retail/2005-08-25-wal-mart_x.htm

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