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Thursday, August 31, 2006

IMS service adoption - start with the psychology

I've been speaking to many IMS practitioners in the last month, preparing for our Big Brainstorm on 4-5 Oct.

Many have been trialling IMS-based services - Video Telephony, dual-mode VOIP, PoC, etc. Most say that they've run customer focus groups and done surveys which have shown that people are interested, in theory, in new service types. However, when they build and trial the services they find two things:

1.) There are significant technical challenges. (The main bottleneck seems to be around the device and access method - power consumption and overheating handsets.)
2.) The service is way too complex for the poor user. Customers are just not ready for these whizzy services in practice and the marketing departments are not closely aligned enough to the market realities.

We know that man can eventually solve most technical problems, but the more intransigent and (commercially) important is what's called customer 'usability'.

However, an article in last month's Harvard Business Review (called 'Eager Sellers and Stoney Buyers: Understanding the psychology of New Product Adoption') reminds us what 'usability' really means. It is primarily an emotional and psychological issue, and we (in the telco world, as rational engineering types) ignore what it really means in practice. Not only that, as engineering types we magnify the problem of user take up by not appreciating some fundamental truths, revealed by new research.

For IMS-based services addressing this is even more important, as the forces of 'Telco 2.0' mean that our customers have even greater choices and alternatives to our vertically-integrated service offerings. Fixed business models are going under water, SMS has 2-3 years life left in it, mobile voice 5-6 maximum. In the meantime, huge price pressures on mobile voice through changes in regulation and competition.

So, my contention is that if our great hope is to replenish the coffers with IMS-based multimedia combinational services, then we need to get REALLY FOCUSED on our product development and customer adoption plans.

So, the HBR article says this in summary:
- Studies show that new product innovations fail at a staggering rate (telco no exception).
- The products that consumers dismiss often do offer improvements over existing ones (that's why the focus groups always say they like the ideas!)
- But they are not adopted because NEW PRODUCTS FORCE CONSUMERS TO CHANGE THEIR BEHAVIOUR, and that has a PSYCHOLOGICAL COST.
- Consumers IRRATIONALLY OVER-VALUE the benefits of the prodcuts/services they own over those they don't.
- Executives, meanwhile, OVER-VALUE their own innovations, leading to a big problem.
- Studies show that, on average, there is a MIS-MATCH of NINE-to-ONE, (9x) between what innovators thinks consumers want what consumers truly desire.

Companies can overcome this disconnect by considering where their products/services fit within a matrix (Easy Sell, Sure Failures, Long Hauls, Smash Hits). Plain old mobile voice, by the way, would be categorised as a 'Long Haul' back in the early 1990s. (Ask France Telecom where Skype would be today).

Each category has a different ratio of 'product improvement-to-change' required from the consumer.

Once companies know where their product/services (really) fit into this grid, they have a better chance to manage resistance to change.

We will be looking at how to apply these principles to IMS-based services at our brainstorm on 4-5 Oct. Using these and other approaches we look to create a new IMS services framework for the industry...

The Editor, IMS Insider

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