As products become more upgradable their value chain will extend to several owners, so tracking their aftersales life will be critical.
I’ve been thinking a lot about the afterlife recently. Not mine, you understand, rather the afterlife enjoyed by the artefacts we discard or pass on once we’ve finished with them.
This may be a fascinating topic for environmentalists, people in the recycling industry and even Wombles, but what use is such a line of thought to marketers? Quite a lot, as it happens.
The value created by a product very often comes not from the initial sale but from the revenue stream attached to its lifelong use and ongoing maintenance.
Notoriously, shaving product manufacturers are alleged to sell their razors at a loss. It’s the price they pay to gain users for their real money-spinner – the blades. The same is purported to be true of the computer printer business. For blades, read ink cartridges.
It’s not just Gillette and Canon that operate such a model. Someone at Ford once told me that it would be cheaper to buy a new Rolls-Royce than to build your own Fiesta using Ford spares. True or not, it’s a good story.
And there’s a good point to it, too. The value chain of many products can be measured in years. If you’re Boeing, Airbus or GE, it can stretch into decades. Which means that a product could still be generating you service income while in the hands of its second or third owner.
If you believe the trend-hunters, this extension of products’ value chains will become an increasingly common phenomenon. Products will become increasingly upgradable, with modular add-ons and firmware upgrades.
I’m a little sceptical myself. I’d love to own a Bristol motor car which I can leave in my will. Or, more modestly, a Howies cotton Hand Me Down jacket, which is guaranteed for a minimum of ten years of hard use. But at £176,000 and £400 a pop respectively, I’m not sure either is going to start a mass movement.
One thing that’s more likely to put a brake on consumers’ product replacement cycles is the recession. This has certainly caused car manufacturers to focus renewed attention on older cars that are now in the hands of their second or third owners.
First there were artefacts, one-off items made by artisans. Then there were machines and products, the results of an industrial age of mass-production. Most recently, there were gizmos, or objects whose utility derives from their link to information networks. The next step in the evolutionary story is something called ’the Spime’. These are objects that are aware of their place in space and time. I find the idea of self-aware products a little creepy.
For very good reasons, the DVLA doesn’t like giving out details of current owners and their addresses. Faced with this obstacle, car manufacturers have found themselves having to come up with clever ruses to get the current owners of their vehicles to identify themselves.
For example, Audi has been offering free MOT tests to all owners who present themselves at their local dealer. There is talk of other manufacturers following suit with similar offers.
I was talking to our digital creative director about this, and he pointed me in the direction of a fascinating little book (more of a long essay, really) called Shaping Things by cyberpunk novelist Bruce Sterling.
Now, cyberpunk and me don’t really get on. On the whole, I find the characters unappealing and the prose completely impenetrable. However, I was delighted to discover that this little non-fiction book has at least one industrial-strength idea in it. And that idea is of direct relevance to the challenge of accessing the long-term product value chain.
Sterling has a fascinating take on the history of human engagement with objects. First there were artefacts, one-off items made by artisans. Then there were machines and products, the results of an industrial age of mass-production. Most recently, there were gizmos, or objects whose utility derives from their link to information networks.
The next step in Sterling’s evolutionary story is something he calls “the Spime”. These are objects that are aware of their place in space and time, and which, in his words, have “informational support that is so overwhelmingly extensive and rich that they are regarded as material instantiations of an immaterial system”. (See what I mean about that prose style?)
I find the idea of self-aware products a little creepy. I speak as someone who for some time has suspected that their expensive washing machine has it in for them. But there is something in the idea of the Spime that I think we marketers can borrow, and perhaps even make some real money out of.
For years, many of us have worshipped at the altar of customer relationship management. However, managing relationships with flawed and fallible humans can often be a fool’s errand. People move, they change their contact details, they give away or sell on our products and, infuriatingly, they feel no obligation to keep us informed about any of these changes.
So why not abandon this frustrating pursuit of the customer, and try building product relationship management instead? In future every product would carry a barcode which, when read by RedLaser or some similar application, would unlock a world of useful information for the user – instruction manuals, hints and tips, service offers or maybe even firmware upgrades.
In return for these riches, that product’s custodian of the moment would be obliged to furnish us with contact details, which they would surely give willingly as equal beneficiaries in a value exchange.
If you try it, let me know how it goes. Though you’d better hurry. My coffee machine has started looking at me in a funny way.
Richard Madden is planning director at Kitcatt Nohr Alexander Shaw