Commerce 101 – sales is about conversion. Present a purchase option to a consumer, close the deal and process the payment.
Excluding the most rabid fanbase, the tablet and smartphone markets work in exactly the same way.
Wow your observers by unveiling a killer device, close the deal by telling them then and there where and when it can be bought, how much it will cost. Lock them into the sale either then, or through pre-order. Don’t make the consumer ‘work’ to purchase your product, do the work for them.
Microsoft seems to have missed steps two and three, and far too many times of late: The new Windows 8/RT operating system. Its first foray into hardware in a generation, The Microsoft Surface Tablet. Its Windows Phone 8 partnerships.
(Yes Windows Phone is reliant on external hardware partners – but given that neither Nokia’s announcement yesterday nor Samsung’s last week unveiled pricing or release dates, we can assume its a Microsoft issue, rather than OEM – and they are the senior partner with the most to lose).
Investors were less than pleased with Nokia’s announcement (it does have a lot riding on the Lumia Windows Phone 8 series), its share price dropped by 15%.
Why is it so hard?
Microsoft has done a hell of a lot of hard work in the last 12 months to develop these OS platforms, build hardware (and hardware partnerships) and court developers to boost its app store and media offerings. It is slipping at the sales phase.
At the most basic level, if it can’t make the sale there and then – even if you can’t quite tie down a date or price exactly – allow people to pre order, or at least sit on some kind of waiting list. Why?
A) You mentally lock consumers in, building loyalty and hype. Once they’ve ‘decided’, they move into ‘waiting mode’ and they’re less likely the change. They effectively ‘self hype’.
B) You get free added PR, and additional sales opportunities – i.e. "We had 3 million on our waiting list in 24 hours" and "To say thank you to those 3 million, we’re throwing in £15 free on the Windows 8 marketplace on launch day!".
Behaving like some monolithic, market dominant force that can bend consumers to its will won’t work for Microsoft anymore. I am somewhat sympathetic to Microsoft – the company is in the midst of pulling off one of the most amibitious cross platform launches (including hardware) in the tech industry’s history. It is a giant company with silo problems internally – similar to the problems that crippled Sony at the turn of the decade. What is frustrating is that Microsoft and Nokia seem to have done the hard part, and are messing up the basics.
Unfortunately in these times of 3-6 month smartphone release cycles, simply telling people to ‘wait for the real deal’ doesn’t work. Get their money now.
Motorola, Samsung and Apple (next week) unveil products when they’re ready to be sold. Motorola’s Razr M announced last night? On sale next week for $99 on a plan. Samsung’s Galaxy S3? Unveiled May 3, Pre sales instantly, on sale by the 29th. The Galaxy Note 2? Announced last week. Pre-order available now. Apple’s iPhone 4S? Announced October 4 2011. Pre-orders on October 7. On sale October 14. The iPhone 5 will presumably follow the same pattern.
All of these devices had the price available at their unveilings.
Phone contracts expire. Retail consumers will wait a month here or there (or for a truly high profile device, such as the iPhone 5, perhaps a bit longer), but they won’t wait indefinitely for some unspecified seasonal release date – especially for a completely untried technology. Yes, those in the tech industry and Microsoft fanboys and fangirls might be sitting on their hands waiting, but is anyone else?
The average consumer can look around and see what the Google Android OS is about, and then choose the hardware to match (i.e. Sony, HTC or Samsung phones), they can also walk into any store and buy the gold standard for casual users – 3 generations of iPhones.
Two weeks from now they will probably be able to do the same with the iPhone 5.
Excluding non-contract based sales, a smartphone purchase is a big decision for consumers with an interest in the technology – usually locking them to a device for two years. They are conservative purchasers – hence Apple’s dominance. Brand awareness is key, and for the rank outsiders such as Nokia-Microsoft the sales conversion needs to be made as easy as possible.
Has Nokia-Microsoft presented a strong case for conversion? Undoubtedly. Has it sealed the deal and collected the cash by enabling the consumer to begin the process of converting? No.
