What Microsoft can learn from the Xbox

I had dinner with two old friends last Friday – both are veteran marketers.  Somehow we got to talking about Microsoft and the Xbox.  I had been thinking about the Xbox lately because of the reasons for its success with gamers.  Which reason in particular? Moding.  Basically, XBox can be manipulated/hacked so that gamers can play copied games and perform (illegal?) activities enjoyed by most gaming enthusiasts.  PlayStation can be moded too, but from what I gather Xbox moding gives you more features. 

Moding is just another way to free and manipulate data – just like an API with web services today.  So the lesson here is making it easier for users to free their data is a competitive advantage. 

For lesson #2 we return to the dinner party.  It turns out one of my guests got an Xbox as a Christmas present from his brother in law.  Being 30 and the director of marketing at a large Canadian company he barely had the time to use it.  3 months after getting it he tried to use it and found it was broken.  He called for technical support only to learn that he could PAY to ship it back and then PAY $200 to have the $300 device fixed.  The sales representative had the good sense to explain that if he had had this problem in the USA – and not in Canada – the part would be covered by warranty.  Whoops.  What’s the outcome of this experience?  My friends have made a choice for their family never to buy a Microsoft product again if they can help it.  That was the punch line to their story.  Not so good for Microsoft – especially considering the purchasing power of this couple.

Consumers are fickle, more fickle than ever.  Service and support are HUGE components in the brand relationships.  That relationship matters immensely for monoliths like Microsoft who will have many products to sell to a given customer over that customer’s lifetime.  What was the cost of that support call?  Certainly more than $2.25 (total guess) Mircosoft likely budgets for the average support call.

Missteps like this one build brand bias – in  negative way.  Over at Rackspace – the most service oriented company I deal with – they call these episodes paper-cuts.  Consumers  are fickle and service matters.  Imagine dying from paper cuts.  What a painful way to go…

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