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August 23, 2004
TiVo as pimp
TiVo appears to be desperate now.
With cable companies offering their own digital video recorders and its relationship with DirecTV (its biggest distributor) on the rocks, TiVo recently launched two new strategies:
1. Offer bigger discounts.
2. Pimp its customers.
This New York Times story (registration required) describes some of the tactics for these two new strategies:
Introducing a redesigned TiVo box and lowering its price by $50, to $99, by doubling a rebate offer; selling TiVo at more retail chains and Web sites like Costco, Sam's Club and Target.com; starting a loyalty program, to give incentives to current TiVo customers to recruit newcomers; and even teaming with a bank to offer a TiVo Platinum MasterCard. These efforts will be promoted in a quirky ad campaign, with a budget estimated at $15 million, that is scheduled to start this week. In the ads, the previous TiVo slogan, "TiVo is TV your way," is replaced by an affirmation: "You have a life. TiVo gets it."
It doesn't seem like TiVo gets it. For the past four years, the 65,000 members of the self-organized TiVo Community forum have traded ideas on:
* How to convince friends and family to buy a TiVo
* How to deliver impromptu sales training sessions to Best Buy employees whose sales pitches need work
* How to be a better TiVotee
A few TiVo reps monitor this worshipful congregation, but they do little to actively gather feedback or rally evangelists to their side. What a waste.
Now, TiVo's new strategy is to monetize its relationships with customer evangelists and turn it into something it shouldn't be.
The TiVo Rewards Program is a points-based effort to encourage customers to solicit friends, family, and strangers to buy the product and activate the monthly service. Points can be redeemed for TiVo merchandise, TiVo recorders, a lifetime subscription service... even a TiVo-logo'd iPod.
Incentive-based referral programs are not new. They just aren't very smart.
This type of "loyalty program" (as the Times mislabels it) is not really a loyalty program. It's a pimp program. If TiVo pays customers to refer new customers, it risks corrupting customer relationships to focus on money. Lost in this tacky translation is the spirit of a credible, nothing-to-be-gained customer referral. A genuine TiVo referral, generally along the lines of "it'll change your life!" is now more circumspect, especially for a new and unfamiliar product like a time-shifting digital video recorder.
TiVo Community members have held lengthy dicussions about the program and its complex rules. The resources to develop and support this program must be costing the company dearly.
The upshot here: Customer evangelists don't need or want to be paid. Some find a monetized relationship offensive, as some TiVo Community members have already said so.
Instead of spending a lot of money on reward merchandise and thousands of hours supporting the program each month, TiVo should open-source its "get more customers" challenge to the TiVo Community. Then TiVo's marketing might finally catch up to the power of its product.
Other blogs that reference TiVo as pimp:
» Paying for Customer Referrals from CCUCEO
"Ouch" is what I said when I read Ben McConnell's riff at the Church of the Customer on TIVO's evolving strategy. The Church of the Customer, aka Ben and Jackie, are sources of inspiration and guidance for our company, and [Read More]
» Scooby Snacks Volume #6 (Eweek, Having a Fan, Googling, and Hard Drives) from scooblog by josh ledgard
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