We’ve had some bold claims with regard to the Smart Home market this year. Our June analysis showed a significant drop in consumer demand for DIY equipment, mostly driven by a fall off in security cameras. Our refreshed analysis in August saw delight increase as demand slowed, a further indication that the main stream market might be leaving DIY Smart Home to the early adopters.
Along the way, we have added new sources and new products to further expand our coverage. As a result, we are delighted to share the revised results of our analysis of Consumer Smart Home demand through September 2015. While the overall demand has increased, the same slowing trend we reported on in June and August persists, with September at the lowest level of any month this year.
Where is the growth coming from? The rebranded Ring and other entry control brands have had significant gains this year while the novelty of smart light bulbs is starting to wear off. Even the darling that drove most of 2014, the humble security camera, has had only single digit demand growth for August and September. What does this mean? DIY Consumers are expanding from their first purchases of Thermostats and Cameras into other equipment to drive up their abode IQ. Though smart lighting has some the highest delight scores in our tracking of consumers, overall interest is falling as consumers are shifting from easy to install novelty products to more complex integrations.
Will the momentum of 2015 continue into 2016? Argus Insights will be at the Consumer Electronics Show in force, following soon after with our predictions for 2016. Let us know if you’d like to catch up in Vegas!
Samsung is trying to get into the Home Automation business the old fashion way, by buying their way in. This is a very different strategy than Samsung has used in other consumer markets, preferring in the past to carpet bomb consumers with a mix of marketing and blitz of products until there is only mindshare and market share left for Samsung and one or two other competitors (Smartphones anyone?). Question is, if you were Samsung and your two biggest frienemies, Apple and Google, had both laid out their Home Automation Strategy, Google with the Acquisition of Nest, Dropcam, and the establishment of a Home Automation Venture Fund, and Apple with HomeKit, a platform included in iOS 8 that is meant to bring IoT device manufacturers deep into Apple’s walled garden, what would you do? Samsung, who successfully competes against both Google and Apple, could have entered the market consistent with their historical strategies and picked a niche to initially own, then drowned the segment with products and services until consumers give up and swallow the view of Home Automation Samsung is selling. With proven prowess in more diverse devices than Apple (iFridge anyone) and a slightly schizophrenic software strategy (TouchWiz anyone?), a Home Automation software platform might have made more sense.
Instead Samsung chose to target SmartThings, a good firm to be sure, but it’s no Nest or DropCam. In fact, of the major Home Automation Brands, SmartThings is not one of the leaders and lags behind SimpliSafe, DropCam, Schlage and others. It may seem a bargain to Samsung at $200 million but much more will have to be invested to command the market position already held by DropCam and SimpliSafe.
In fact, SimpliSafe would have been the better acquisition target. Already a clear leader in the segment, this hero of DIY home security consumers has established a significant and growing beachhead in homes, from which they can simply (couldn’t resist) expand their capabilities for Home Automation, similar to the recent move by DropCam to include object trackers to help find your keys. Samsung Home Automation strategy needs a strong software component to craft a user experience that consumers will choose of both the upstarts and juggernauts already winning in the market.
We are tracking the front lines of Home Automation and IoT across multiple social channels. This allows Argus Insights to separate the brand promise from the product reality, identify emerging leaders, and assess the growth prospects for the market overall. Drop us a line or give us a shout if we can help you make sense of how the actual consumers, not the pundits, are shaping Home Automation and IoT for their own needs.
I recently attended a fantastic CMO conference in San Francisco where I was able to observe the mostly graceful dance between vendors and the CMO’s themselves as the group wove together conversations of the emerging needs and solutions with Marketing today. In the midst of the continuous banter of “the CMO is the new CIO” and the fact that “your Facebook fan page is not an owned asset” was the constant presence of Net Promoter Score (NPS). Many CMO’s in the room were stalwart fans, others just starting, but a vocal minority advised caution, citing dark tales of where NPS let them astray.
Recently Bruce Temkin released analysis of actual NPS respondents across multiple sectors and found that the rigid categories of promoter, detractor, and passively satisfied while generally were interesting, in many aspects that matter did not accurately represent consumer behavior. For example, in their broad industry NPS survey, his team found, on a scale from 0 to 10, actual humans tended to clump their responses in three choices, 0, 5 and 10. Under the NPS guidelines, that would put the bulk of the population in two buckets, detractors and promotors, with a bias towards detractors. Knowing this about human behavior writ large kind of messes with the math of Net Promoter, which in turn, mucks up the metrics many companies are driving their business with.
Don’t get me wrong, I love the notion of the Ultimate Question and the insights that can be pulled from it. I just take issue with the over-simplified math of NPS BECAUSE of how people answer the question. Our own research at Argus Insights, where we pay attention to both the numbers and the stories provided by consumers, provides a few startling insights. While we use multiple sources for our analysis, consumer reviews are particularly interesting because it allows us to see how consumers respond to other multiple products/services. Does a particular consumer love everything or hate everything, such as if they hate the Samsung Galaxy SIV do they also hate Zumba DVD? By understanding the patterns of consumer behavior coupled with an analysis of their own unsolicited opinions, we found that the NPS methods focus companies on the wrong consumers. By dictating that the Passively Satisfied data be thrown own and that firms could be laser focused on turning Detractors to Promoters, companies are leaving opportunities for Innovation on the table. Based on our research, we divided the rating scale into four categories, each with a different impact on the strategic moves the company can take to improve their relationship consumers.
What NPS would call Promoters we call the “Emphatic Yes”. These people love your product and will crow about it the the whole world, NPS is right, they are promoters. They are also the source of what position points should be used in messaging because we know, at least for these delighted consumers, what they are happy with and it may be different than what you thought.
Skipping to what NPS call Detractors we found two styles of behavior. First, the most negative consumers tended to be negative across reviews. Simply put, they are “Curmudgeons”. It would be a waste of resources to try to make these consumers happy, yet NPS says companies should focus their energy on turning them into Promoters. Where the real opportunity lies is within the “No And” group, short for “NO, I don’t like this experience AND these things are not bad.” This is the population companies have the best shot at turning into promoters. By understanding what drives the NO and doing more of the AND, firms can harvest low lying fruit to improve satisfaction.
Where the crimes of NPS passion are most egregious are in the Passively Satisfied. Ignored and shunned by NPS practitioners, Argus Insights finds these consumers to be the rich veins of gold to be mined from your research. These “Yes, But” consumers are your lead users as defined by MIT Professor Eric Von Hippel (you can actually download all his books for free), consumers that like what you have to offer but see some opportunities for improvement. Our research showed that these consumers are living life a bit in the future of the rest of the market so not only do they continue to support your product/services but are providing free insights as to what would delight them more in the next release. NPS demands you leave these opportunities for innovation on the cutting room floor when you discard the Passively Satisfied, which means you are unlikely to uncover the innovations that could lead you from the dark tunnel.
If you would like to learn more about the insights we are able to extract from the less than Passively behaving not quite Satisfied consumers, check out our Social Intelligence Platform.
Contrary to popular belief, the iPhone’s aren’t the highest rated devices on the market. While the competitors have broad product portfolios that a mix of hit and miss, this allows them to tailor a handset to the diversity of consumers while the first thing iPhone customers do is buy a case to personalize it. I agree their focus on profitability is keeping the market share limited. The fact that Verizon sold as many iPhone 4S as iPhone 5 demonstrates that for iPhone fans, the only thing better than the iPhone 5 is a cheaper iPhone 4S. They have also been losing the experience innovation battle, focusing their launches on cool technical features such as camera components or silicon rather than moving the user experience forward. Even Henry Ford’s vaulted, “any color you want as long as it’s black” strategy had to give way to diverse offerings. You can see the narrowly defined handsets are delighting consumers more, in large part due to the strong point of view they take on the mobile experience.
Time and time again, as markets mature, the dominate experiences have to fragment to address the refined niche needs of the market. Galaxy Note does that very well while the Facebook phone didn’t. The Note phones added capabilities that integrated into the mobile experience. The Facebook phone took over the mobile experience, forcing consumers into an even more constrained experience. It’s time for Apple to find ways to fragment their walled garden or else iPhone users will continue to dig their way out.
RIM had their annual meeting earlier this week. Notably missing from the shareholder outcry was the push to sell or split off salable assets to interested parties. We all know that since the launch of the iPhone, RIM has been spiraling down in terms of both market share and customer satisfaction. The biggest question that the board and newish CEO should be asking if they can pull out of the dive in time before scattering push servers, patent plaques and unsold Storms all over the Canadian countryside.
Of course we have an opinion on this. Actually we’ve just aggregated the user opinion on this. You can see the Blackberry fall from grace played out over this snapshot of the Smartphone market. Only LG has fallen faster from grace. These results are based on user opinions gathered from all RIM phones launched in the past few years.
Notice where Apple and Blackberry trade places in the minds of consumers. It was when the iPhone became available on Verizon so now the legions of RIM faithful in NYC and other major metro areas could finally embrace the iPhone experience and make phone calls, unlike their locked in AT&T brethren. Every attempt to refresh the product lines led to further decay while Apple continues to flourish.
But what is RIM to do? Is there enough residual Social Capital in RIM customer experience to recover with Blackberry 10, which has been delayed again? We’ll answer that question in our next post but you can always reach out if you’d like to know sooner!