As I look at this situation from the outside, two key problems emerge:
- They did not have the right market research
- Their investment was way, way too high
For #2, perhaps this is just a matter of timing. They stated that it would take hundreds of thousands of dollars per plane. However, if a) they built the connectivity hardware into the plan at production, or b) got volume (any reason this couldn't also be done in cars?), then their costs would likely reduce. Seems like they should have just waited until the right cost point.
But, for #1, this just baffles me. How could Boeing not know with a pretty good idea of accurancy what the uptake would be? This is not a revolutionary product or even idea. It's a small, value-add extension of what people already do! Clearly they hosed-up the market research, or, worse yet, sought out the market research that gave them
How would I have performed the market research?
Simple, at low cost.
1. Setup a server with wifi inside some plane. Powered, of course. I would do a) cross-country US and (not red-eyes) b) international routes.
2. Print up some cards announcing the internet service. Give instructions on how to connect, price point, and that customers will need to pay by credit card.
3. When people connect to Wifi,display a page asking them to pay via credit card.
4. After credit card info, display a page apologizing for the inconvenice but service isn't working. Their CC will not be charged, and please enter your email address for a $25 Amazon Gift Certificate.
There ya go. Happy customer, real data (including price points), easy to do, and a marketing database started for when you want to pilot the real thing.
The key is to test actual consumer behavior at low investment. So much better than surveys.
And, if you wanted to do this cheaper, but with less accuracy but still close enough ballpark, just do this:
1. Count the number of people on planes with laptops.
2. Count the number of people on planes with blackberries (they love and value connectivity, after all)
3. Find out the adoption rate at airports for Wifi access, especially international terminals.
Do some back of the napkin math. There's your best case uptake. Doesn't account for cost, which is what I always think is important in surveys.
Have I mentioned I hate surveys?
We did an innovation project on a novel, new-to-market idea while I was at Whirlpool. Tested the idea in the market in a small pilot. Did the post-pilot survey. Over half the respondents said they loved the product and would pay for it. Most said they used it every day.
The problem? When we looked at the usage data, nobody used it.
Now THAT'S insight into consumer behavior. How consumers respond to surveys, that is.