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Blog - Published 30th June 2017

What is the birthday present for the consumer that has everything?

gifts for consumers

Graham Seddon - Menzies AccountantIt’s the morning after the night before. Apple officially celebrated the 10th birthday of the launch of the iPhone on the 29 June 2017. If you were thinking of attending the weekend party to celebrate – what would be the best gift for Apple this year?

The key to a great present is knowing what someone wants even when they don’t know themselves. Just like great birthday presents, great products and services are all about seeing what people want before they know themselves.


‘If you build it he will come’

The famous quote from the 1989 classic Field of Dreams starring Kevin Costner, saw the central character have the vision to build a baseball field in a cornfield in Iowa. The field came before anyone wanted it, but once it was there the crowds came to watch.

History is littered with companies who have managed this. Henry Ford invented a car for the masses, not a faster horse. The McDonald brothers decided people could eat a take-out meal in bag made in minutes through a uniquely efficient kitchen management process. Sony decided a Walkman was needed to listen to music on the go. And Apple decided we wanted a touchscreen telephone.

A lot can happen in 10 years

mobile phoneIn the 10 years since the launch of iPhone, the pace of digitisation has seen more and more companies find that magic of knowing what the consumer wants.

Netflix saw streamed content on demand was the way forward. Uber realised we wanted to personalise our ride experience. Tesla saw the need for high performance electric cars. The pace of development goes on – but all these successes are based on the same premise; give the consumer what they want before they even know they want it.


‘You’re gonna need a bigger boat’

Whilst innovation has been hugely rewarding for all those companies above, sometimes the alternative strategy is to give someone exactly what they want and the customer driven marketing strategy is just as valid as pre-innovation.

In the age of social media, listening to your customer has never been easier. Seeking consumer feedback (especially from die hard brand fans) can help be hugely valuable to any business and help deliver ongoing buy-in and loyalty. Lego is a great example of this theory in practice. It has an entire online ‘Ideas’ community dedicated to the customer and their ideas for new kits. Customers can submit ideas, vote on existing ideas and feedback on the concepts they want to see brought into production. This strategy has seen them launch – to huge fanfare – and sell out of sets dedicated to The Beatles, Doctor Who, The Big Bang Theory, the Caterham Seven 620R and even NASA’s Apollo Saturn V!

Even on a day-to-day basis we’re telling retailers what we love, like and can’t live without. Simply with a swipe of our loyalty card we’re helping business to shape our future shopping experiences in order to extend loyalty and hopefully spend more. This pot of consumer data gold is sometimes far more valuable than the long and risky road of innovation.


‘You take the blue pill, the story ends…you take the red pill you stay in wonderland’

matrixSo for a business today there are really two choices – product driven or consumer driven.

Some would argue the choice facing a business is as critical as that faced by Neo in the 1999 sci-fi smash hit ‘The Matrix’. This certainly seems the case when we look at the last 10 years of performance of two tech (not fruit) giants, Apple and Blackberry. While the iPhone remains one of the most desirable smart phones on the market, Blackberry have all but exited the phone market and now just license its name.

Of course it seems obvious then that innovation must be the red pill of the business today. But it’s not always that simple.

Innovation is risky.

Remember the the Mini Disc? Windows 8? Even some great innovators get it wrong.

Innovation is expensive.

The level of investment to truly innovate can be endless. Without a strong financial base of funding, this can soon become a burden too great for any business and soon create cash flow problems.

Innovation takes time.

By its very nature it’s never been done before! As such it is always difficult to predict just how long a new product or service will take to fully develop and take to market.

Consumer led provides certainty.

If you ask the customer what they want or buy and then deliver it, then there is a reasonable expectation that you will have some success. The quality of research and delivery of course are vital – but the risks of failure, certainly in the short term, are greatly reduced.

Consumer led can be cheap.

With a loyal customer base and technology driven tools, customer focus led approached can be very cheap. Feedback through digital comms, data analytics on trends and monitoring social media comment can all provide invaluable business opportunity at very little cost.

Consumer led can be fast.

With a known customer base and known product or service, change is often incremental. The opportunity can be maximised without huge change programs and so can be implemented quickly so the business can start to see returns.

shopping trolley

The truth of course is that there is no black and white to this, or even red or blue in fact! Many companies will seek to innovate to get ahead of the market and enjoy the highest rewards, but in today’s connected world if you ignore the customer you do it at your peril. Ultimately it is about balance. Not every idea can become a mega product and nothing lasts forever. Will the iPhone still be the dominant force in 10 years time? Will the consumer lead the competition to the next big thing? Or will innovation produce for us the next smart device we haven’t yet even dreamt of?

For now – let’s enjoy the party while it lasts – Happy 10th Birthday iPhone!


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Graham Seddon is a Partner at Menzies LLP and is part of the Advisory Team working with business owners to align their personal goals to their business plans. Our advisory team work in partnership to develop a streamlined, profitable business that works as hard as you do.

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Graham Seddon

Partner

Graham Seddon is a Partner in our Leatherhead office and is part of Menzies strategic business advisory team specialising in FD advisory services.