Lock-in Strategy + [Case study: "Apple iPod"]
Here are some valuable lessons to be learnt about the “lock-in strategy” as employed by Apple so as to aid super-long-term success, making growth more sustainable.
Dropping the NGOs / Not-For-Profit / Non-Profits from our scope here, most products built (and that may go for business services as well but again not in our present scope) certainly carry an ulterior motive at a basic level which is of course, REVENUE and is measured and tracked on a regular cadence as it makes sense to the org. and the internal product teams, so at any given instance you’d have them tracking MRR, ARR et. al.
That done, as in once the route to revenue is finalized, the next step teams and orgs get to is to look for various innovative ways to optimize that revenue, some may look to upsell and cross-sell when the others look to bring in more innovation ideating over highly specific features that make sense to a targeted and niche customer segment.
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But, all that again hinges on one big question which is:
“how do I manage to lock customers in for a longer period of time?”
Talking of factors that contribute to the success of the product, here’s a chart.
But, if there is one important factor that’s perhaps missing from that list above is to be able to lock customers over getting them to use the product for a longer period of time.
How does one go about achieving that apparently?
Well! Differentiation, that’s the ticket! Isn’t it?
But, come to think of it, that’s easier said than done…
Of all the products that you’ve seen in a given market space and segments what percentage of them do you think carry something that differentiates them from the others in competition?
If your answer is > 90%, you haven’t heard of the Insurance space at all.
CASE STUDY: Apple iPod
To understand the lock-in strategy let’s consider an example of a product that had an absolutely amazing brand image for itself in the market, the APPLE iPod.
Remember:
To lock your customer in for a longer period of time is the right way to think & strategize. You could do that by doing a variety of things - employing a plain business strategy / a software / a hardware / a combination of any / all of the above, for if you don’t spend time doing that, someone else from your competition surely will!