Microsoft claims its own research shows customers find it inaccessible and remote, and it is taking steps to remedy this poor showing.
Director of corporate marketing Shaun Orpen is taking the role of customer marketing director to address the problem (MW last week). The company has also launched a new initiative called Customer Focus 2000, which is dedicated to customer relationship management.
This sudden spurt of interest in the consumer smacks to cynics of a company running scared.
Although Orpen’s remit is unchanged, he is now to focus on customer care and marketing Microsoft’s products to individuals, rather than just business customers. A restructure of the marketing department to make it easier for customers to seek information and advice or submit complaints will be his first task.
Microsoft has emerged as a bully from the recent US anti-trust hearings, which may eventually result in the company being broken up into separate divisions. Although the UK initiative is not directly linked to the US situation, customer care has undoubtedly received a fillip on account of the bad publicity accompanying the hearings.
When Steve Ballmer took over from Bill Gates as president of the company in July 1998, he promised to drive the company’s emphasis on customer care.
Microsoft now has its heart set on winning over consumers. Customer Focus 2000 will include regular reviews of Microsoft competitors’ customer service, focus groups and site visits.
Microsoft UK services manager George Thaw says: “This new programme is about putting the voice of the customer at the heart of Microsoft.” But this realisation may have come too late. The company has discovered marketing just as it loses its status as the world’s biggest company.
Customer service has never been central to the organisation, because it has long relied on its dominant position in the market.
But it has begun to take rivals such as Oracle and Linux seriously, and will now have to operate in a more competitive way.
Gates has not achieved his ambitious mission statement of seeing a PC on every desk and in every home, leading the company to revise this statement to: “Empower people through great software – any time, any place and on any device.”
There are now almost 600 million PCs worldwide,which some believe is close to saturation point. Certainly, the PC market is not likely to grow substantially.
Many experts say we are moving into a post-PC era, when mobile phones and digital TV will most commonly be used to access the Internet. Consumers who have thus far shied away from PCs are more likely to take to using a device adapted from everyday life, such as a phone or TV.
The emergence of the Internet has altered the playing field, and Microsoft has been forced into a corner defending its belief that the PC is central.
Microsoft’s share price has fallen almost 50 per cent since December last year, from $119 (&£74.38) to $66.62 (&£41.64). Many US analysts now believe Microsoft has had its day as the main player in the market, and competitors such as Linux are closing fast on its leading position.
The Linux operating system was started by a Finnish university student and developed by academics around the world.
Linux’s advantage over Microsoft is its different and more versatile structure. It is a free programme and can be personalised for any company’s need. Thousands of programmers throughout the world have contributed to it by customising the basic source code.
Henry Ford once said: “You can have any colour as long as its black”, so Microsoft adopted a similar policy over the last decade by saying: “You can have any programme as long as its Microsoft.”
Microsoft has now been forced to follow Linux’s lead. It has said its next version of Windows, code-named Whistler, will offer a wider array of features that will enable its customers to tailor the programme for individual company requirements.
On another front, Oracle chief Larry Ellison has just eclipsed Gates as the richest man in the world. A former database company, Oracle redefined itself as an Internet provider. The company believes the way consumers will use software in the future will change. From having specific software on their hardware, they will migrate to using different software in cyberspace. Programme users will be able to store their files on the Internet, so avoiding the need for a sophisticated desktop PC.
Microsoft is reluctantly overhauling its marketing strategy. Rather than push the individual products it makes, the company plans to sell the Microsoft name itself.
The latest advertising campaign on air in the US attempts to show the company in a cosier light, depicting the brand as a positive force in society. These ads move away from Microsoft’s tradition of print ads targeting technology managers, and are a tacit admission that it must target the masses.
In a similar vein, Microsoft’s UK division has become involved in cause-related marketing. Orpen was behind Microsoft’s sponsorship of the NSPCC’s “Full stop” campaign. The company also has a community affairs website highlighting the work it has done to bring the benefits of IT to communities which do not have the resources to gain access themselves.
This latest UK customer service initiative is conveniently timed as the software giant retires bleeding from its recent anti-trust battle. Undoubtedly, the fact that the company is taking more care of its customers is a sign that things are hurting back at Microsoft’s Seattle headquarters.