Ever wondered why a great product with awesome features & low pricing fails? Why one product is super successful, while a similarly competent product fails to impress the market? Customers are not taking that loan even after spending millions on marketing??
Blame it on consumer behaviour. The old cliche “Customer is king” is not at all obsolete. Your product is only successful if your customers are buying it & liking it.
Why They Failed?
HP Touchpad: HP’s attempt at emulating Apple’s ipad with a touchpad is a great example to begin with. When launched in 2011, it was touted to be the only product to give a competition to Apple but after a major failure and 1.5B down the drain, the product was discontinued. It led to ripples across HP and damaged it’s hold on the overall PC market. While HP’s touchpad with WebOS had it’s flaws, it’s sales of 50k vs 15M of ipad were just not product issues. Worst products have sold more in far more competitive markets. So what led to the failure??
HP’s decision to create excitement much earlier and then launch it after months was one of the major reason. The other was an incorrect customer segmentation. HP went on to compete with Apple heads on while the product should have been marketed to a specific segmentation. This is also a classic example of a marketing campaign which created unrealistic expectations and perception about the product. HP hadn’t done it’s homework on customer segmentation properly.
HSBC Tagline Horror: Another story is of HSBC move to promote it’s US tagline of 2009 ” Assume nothing” worldwide. There was nothing wrong with that except tha in many countries it came out as “Do Nothing”. This was an avoidable mistake and it costed million of dollars to undo the mistake. A lack of dialect, language & geographic understanding led to this failure. tha
And then There are Success stories::
Disney: No one understands Customer segmentation and consumer behaviour better than Disney. Disney started with basic demographic segmentation to choose the target markets way back in 20th century. It has also used Psychographic segmentation to understand the personality traits, liking, choices, motives & lifestyles of its existing & potential customers. And then comes it’s Unique Neuromarketing to understand how customer react to emotional stimuli and how customers can be segmented basis this. In fact way before others, Disney had a secret lab in Austin to understand consumer emotions and how and why a customer chooses a product. This has helped Disney to identify right markets, create a marketing strategy personalized to the micro market segments, develop products which has thrilled a larger audience in one way or another. Disney is more successful today that all their competition.
Marvel: There is another super success story of consumer behaviour within Disney; that of Marvel. Before Disney’s acquisition of Marvel, it was a dying brand with no taker for its movies and a slowing fad for comics. The Competition DC had far bigger superheros and commanded higher customer affinity. The right delivery of product thanks to hybrid customer segmentation and understanding of cognitive behaviour of customer, did the trick for Marvel. It also helped that the competition failed to follow the same.
H&M: Have you ever visited a H&M store? Chances are that you will end up buying 3X of what you intended. How H&M is so successful vis a vis competition. H&M uses psycho-demographic & behaviour segmentations like Urbanity, Age, Gender, AIO variables to attract the right customers, who are spending more in their store.
So how Fintechs are doing this??
What will a company do after creating an awesome service or product, if there is not sufficient takers for it in the market? Or, if they are not able to understand the changing requirements of their customer and may risk becoming another Kodak of the world. For Fintech, the key to success is getting their customer segmentation strategy right. Most of the fintechs are either disruptors or followers in their market and are trying to create a niche or take out a pie from an established brand.
In fact, In today’s world, almost all companies do customer segmentation for their target customers in one way or another (sometime without even explicitly realising it). But not all are successful as they fail to fully understand & explain they product proposition to their target markets. For this, an in-depth understanding of customer segmentation is the basic requirement coupled with dynamic refinement to product & strategy to counter ever changing needs of customers.
Let’s see an example of PolicyBazaar’s successful implementation of customer segmentation:
Policy Bazaar: Indian Fintech Unicorn Policy Bazaar is the largest Insurance aggregator with major market share. It uses Geo-Demographic (Location, Age, Income) & Firmographic (Company profile, Work type) segmentation aided with Psychographic (Social status, lifestyle etc) & Behavioural (Usage, benefits sought) data to target their potential customers. The moto for the company is to provide the right product to the right customer. Company also uses Big data to use the customer buying to cross sell next product thus creating a huge loyalty marketing base.
We will go in detail for Customer segmentation in Next article.
