Microsoft announced this week that it has overhauled their Hotmail platform, saying "Today, we’re excited to give you a preview of the new Windows Live Hotmail, representing the next generation in personal email." One of its new features is photo sharing through links to sites like Flickr and SmugMug.
As a start to its latest update, Microsoft’s Dick Craddock of the Windows Live Hotmail team let his readers know that Microsoft surveyed 2,000 people in the US, where nearly 10 million additional people have started to use Hotmail actively over the last year. They found out that email users were very attached to their personal email accounts; email is currently the tool of choice for sending and sharing documents, communicating with businesses and friends, managing social networking alerts, talking with friends and family; people share over 1.5 billion photos each month using Hotmail; and that email might be the only cloud storage solution you use.
Will Microsoft’s new user interface and functionality upgrade be effective in keeping their current user base from defecting, and also attract new ones? Possibly, but they should also do something about Hotmail’s image problem.
It's probably safe to assume that many email users who are not currently using Hotmail’s service do not want the hassles of migrating to a new email service, and importing or notifying their email contacts with new email address information. There is also the problem of choosing a desirable email address on a platform that has been around since 1997. Even finding an email address that is your third choice may be difficult, and what about the branding issue, for example having a Gmail address versus a Hotmail account?
Increasingly, it has become a negative to have a Hotmail or AOL account particularly if you are in the IT field or social media professions such as, PR, marketing, or corporate communications.
As stated by Harvard Business Review blogger Umair Haque, “Brands are associations. More accurately, brands are composed of social meanings – you know the score, open roads, cute girls, sultry summer days – which signify stuff to us.”
Another goal of branding a product or service is to shape the consumer's expected value. Making changes in an organization's product or service such as functionality and user interface, rather than looking at the whole underlying problem, doesn’t turn a product around in the eyes of the user.
Hotmail has taken good steps to introduce new functionality, and this will help to slow the attrition rate of its current user base, possibly interest non active users to come back, and maybe even attract new ones. Are its functionality updates enough to attract people currently using a competitor email service?
One of Hotmail’s ongoing problems has to do with its legacy image. For the past several years the idea of having a Hotmail account has (almost) been equivalent to admitting that you listen to Howard Stern — you like it, but don’t want anyone to know you use it. For Hotmail to become successful in its attempt to maintain its current user base and attract new ones they should rebrand their service.
One solution would be to work at paying more attention to its current users, not only through user preference studies (I am a proponent of UI studies), but ongoing real interaction with its current and potential user base through outreach and social media channels. Most of us start out as just users, non-users, or people not satisfied with a company’s product. Through real global relationship-building efforts, people can grow to become loyal evangelists and grow a company organically. This global effort should be localized to appeal to all cultures and socio-economic levels.
What's missing in Hotmail’s strategy is a new branding, PR, and marketing campaign strategy. Relationship development creates additional brand exposure, and businesses are not effective in cultivating relationships outside of their company, although startups tend to be better at relationship building. These new interactions with users can help increase company news and updates at a much wider and deeper level; sending them into hard-to-reach audiences where emails, newsletters, press releases, and marketing cannot penetrate. If you have the opportunity to engage in dialogue with one of your users, you could have a long-term fan. You may have to wait months and years building relationships with your current or new users even though there is no immediate ROI; relationship building will eventually pay off.
Once you have loyal satisfied users on your side, they can be a powerful communications channel for your business. You know that your current user base is also more cost efficient than a team of PR and marketing professionals, and can be highly motivated to act as evangelists for your product or service.
To keep Hotmail’s legacy (approximate 343 million users of which some are inactive and have more than one account, to Gmail's 146 million) user population intact, its message should be more culturally relevant. Once that is accomplished their goals of selling more advertising space on the Hotmail side, and increasing visibility for their other computer-related products through Hotmail integration features can be maximized. As Fast Company's George Anders noted,”We rely on Microsoft products in the same way we rely on the 6 o'clock news or the interstate highway system. It's a basic part of our life. The more time we spend with these mainstays, the harder it is to imagine putting our lives together any other way.”
In reality, our reliance on Microsoft products is beginning to shift as competition has increased between cloud-based document users and traditional computer-based software products. The attrition rate is on the increase for traditional forms of document usage such as Microsoft Word, as the trend is moving in the direction of the free Google Docs cloud-based platform. While Google Docs doesn’t have all of the bells and whistles of the Microsoft Office suite, it’s free, collaborative, and it works. Google’s products in part have grown organically and this is because they have found a way to turn their users into product evangelists even when their product is in beta version.
In the short run, Hotmail’s upgrade will likely be less effective at converting new users to its service, although it will likely keep its current recreational users on board. For Hotmail to be successful in the long term, they should develop a new approached to branding their email platform globally. Maybe they could experiment with downplaying Microsoft as their parent company and market Hotmail as an innovative platform built by a team of smart, creative Seattle engineers, whose goal is to bring people from all parts of the world together onto one user-friendly platform.