Tuesday, October 03, 2006

Learn from TiVo

This is an old one that I had published in 2005 elsewhere - but it is still relevant.
One thing we can learn from TiVo’s stumbles is to not ignore the customer. And more importantly, to know who your customer is.

TiVo avoided the consumer – they still do. They did not have a good process to support sales. And their support is abysmal. Did you know they removed email support? The on support available is by phone – and it is only an automated system – rarely do you reach a person. And of course if you bought a TiVo branded by another company you are completely out of luck. Here is a company that seems to be going backward not just technologically but also in customer service attitudes.

As I have mentioned, they knew that people who buy TiVos become TiVo evangelists, yet they did not mine these people. Check out TivoCommunity.com – the tone there is more like a Linux mailing list than a user community. Any user who asks a “newbie” question gets jumped on.

I myself have sold people on the benefits of a TiVo (grudgingly of course – who wants to make the competition stronger), and they have gone out and bought them. Not only that they call me up and tell me how they love their TiVo – these are rational people, mind you! I evangelized TiVo for a while before I realized that the business I wanted to be in needed something like a TiVo to use as a platform. And I decided to build my own.

TiVo should have set up a selling process that demonstrates the benefits of TV. Try asking someone at Best Buy or Circuit City about a TiVo, and the most you will learn is that it’s like a VCR with a hard disk, and that you have to pay $12.95 a month for the service. Demonstrate it once, and you would have a stampede that your cashiers could not handle. Selling anything with many and complex benefits requires salespeople, not shelf stockers.

But one really important things that many surveys and industry experts have pointed out is this – TiVo’s best customer is not he 18-35 male electronics and gadgets buyer. Surprised? I was too. Although the buyer is usually a male, most users and evangelists are their female counterparts, and often have children. My wife, who is as close to a Luddite as anyone I have met, loves TiVo. It’s simple – she can control how much TV the kids watch, what they watch, and most important, when they watch it (on weekends after homework is done). And does TiVo market to this segment? Not a chance. In their place, I would have put together a Tupperware-type network to sell TiVo – one mother to another. Anyway, no one has offered me the VP Marketing position there, so I will make my own!

I think early on TiVo decided their customers were going to be the DirecTVs of the world. That is why they kept courting the satellite and cable companies. But when push came to shove, they decided they were too good to partner with the likes of Comcast. That really triggered the resignations you heard about after CES 2005. Suddenly they are mouthing off about how TiVo is more than just a set-top box, and consumers want more than the ability to store programs and fast-forward and rewind. The CEO Mike Ramsay went so far as to say that the Cable TV business was not the business of the future. Well Duh! And it took you how long to figure that out? TiVo should have figured that out long ago – many people including yours truly did. And they were in that business! That’s like finding no WMD in Iraq. Again, I can’t resist it – Duh!

Of course, it’s not all over for TiVo. Ramsay is right about disruptive technologies like TiVo and even better technologies like L3 destroying the Cable business over time. But mind you, we are talking twenty or more years for the cable business to go away. And then you will have Internet TV businesses that… oh, yes, might be called Comcast and Time Warner…

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