What happens when the consumption of products increase the value?
Friday: May 25, 2007 2:13 PM
Suppose I go online and order a brand new F-150 pickup truck. Everyone in Georgia has a pickup truck; it’s a state law. The price, including all of the additions, is around $30,000. I drive that truck one mile down the road, now what is the value of that truck? My guess would be around $25,000. That first mile is a killer from a value perspective.
In most cases when we consume products and service the value decreases along side. Not any more; organizations are beginning to figure this out. Take Ebay as an example, every transaction increases the ranking and rating of the buyer and seller. This will enable them to transact more in the future. Amazon has added book reviews, comments, tagging, wish lists, discussions and many other social opportunities for those that have read the book. The consumer is increasing the value of the product based on the consumption experience. The new web allows them to communicate that message to anyone at anytime.
Netflix is another example, with over a billion reviews, they have one of the ultimate databases for movie information in the industry. Recommendation systems such as those used by Netflix, Amazon, and other Web retailers are based on the principle that if two people enjoy the same product, they're likely to have other favorites in common too. Based upon this information, they developed an algorithm that will suggest movies that you haven’t seen. This algorithm is so valuable that they are offering you a million dollars if you can improve it slightly. The company is putting out a call to researchers who specialize in machine learning, the type of artificial intelligence used to build systems that recommend music, books, and movies. The entrant who can increase the accuracy of the Netflix recommendation system, which is called Cinematch, by 10 percent by 2011 will win the prize. When the consumer can adjust the product value or sales then standardized products are a thing of the past. We have all been interested in what others have to say about books or movies. We want to see the critic’s comments or what movies have been nominated for an academy award. This support has influenced our purchasing behavior for a very long time. The web simply expands this concept to everyone one in the world, not just the paid reviewers.
Suppose I go online and order a brand new F-150 pickup truck. Everyone in Georgia has a pickup truck; it’s a state law. The price, including all of the additions, is around $30,000. I drive that truck one mile down the road, now what is the value of that truck? My guess would be around $25,000. That first mile is a killer from a value perspective.
In most cases when we consume products and service the value decreases along side. Not any more; organizations are beginning to figure this out. Take Ebay as an example, every transaction increases the ranking and rating of the buyer and seller. This will enable them to transact more in the future. Amazon has added book reviews, comments, tagging, wish lists, discussions and many other social opportunities for those that have read the book. The consumer is increasing the value of the product based on the consumption experience. The new web allows them to communicate that message to anyone at anytime.
Netflix is another example, with over a billion reviews, they have one of the ultimate databases for movie information in the industry. Recommendation systems such as those used by Netflix, Amazon, and other Web retailers are based on the principle that if two people enjoy the same product, they're likely to have other favorites in common too. Based upon this information, they developed an algorithm that will suggest movies that you haven’t seen. This algorithm is so valuable that they are offering you a million dollars if you can improve it slightly. The company is putting out a call to researchers who specialize in machine learning, the type of artificial intelligence used to build systems that recommend music, books, and movies. The entrant who can increase the accuracy of the Netflix recommendation system, which is called Cinematch, by 10 percent by 2011 will win the prize. When the consumer can adjust the product value or sales then standardized products are a thing of the past. We have all been interested in what others have to say about books or movies. We want to see the critic’s comments or what movies have been nominated for an academy award. This support has influenced our purchasing behavior for a very long time. The web simply expands this concept to everyone one in the world, not just the paid reviewers.
