It is no easy feat to make your customers familiar with your product, service, or brand. Things get even more complicated when you are a startup with limited resources compared to the industry giants. Even if your product is on par with the more prominent brands in terms of quality, you must take other measures to stand apart from the competition. How do you do that?
One way to achieve that is through augmented products. Augmented products enable you to get the attention of your customers more efficiently. They make your customers feel like they’re getting a deal, a secret perk that nobody knows about, or a service that makes their life easy.
But what is an augmented product? In this article, you will learn what are augmented products and some successful examples of product augmentation in the business world.
What is an Augmented Product?
Augmented product, or product augmentation, refers to adding more value to a particular product with the help of enhanced features. These features increase the product’s perceived value without raising its price. Some examples of augmented products include coupons, discount offers, refund offers, free delivery, etc.
To understand the concept of augmented products in detail, it is important to learn about the following business terminologies.
- Actual Product. The actual product is the product/service a customer pays for. An actual product lacks product augmentation but has gone through all the product development stages, such as ideation, manufacturing, and packaging, to be available for purchase.
- Core Product. A core product is not a tangible product. It is a set of concepts or ideas that explain how this product will benefit customers once developed. For example, the core product of an ergonomic chair manufacturer would be safe posture and comfort rather than the chair itself.
- Augmented Product. An augmented product is the value-addition that increases the perceived value of an actual product. For example, a chair manufacturer might offer free delivery to augment its chairs, which is the actual product.
Importance of Augmented Products
The world of business is no stranger to cutthroat competition. Companies are always looking to increase profit without increasing prices or compromising quality. In such circumstances, gaining a competitive advantage over more established brands and businesses might become difficult.
Product augmentation can substantially help startups stand out from the crowd by allowing them to deliver the same quality as popular brands while also delivering “something extra.” This extra feature, benefit, or experience attracts customers and increases brand awareness. Ultimately, augmented products result in market penetration, greater demand, and higher profits.
Common Types of Augmented Products
Augment products can take different forms depending on the nature of the business. Here are some common types of augmented products.
- Warranty. Warranty is arguably the most popular and coveted type of product augmentation. It is usually included in electronics and appliances. A warranty gives customers a sense of comfort in knowing that they can replace/fix the product if something goes wrong during the warranty period.
- Free Installation. Offered most commonly with delicate electronics, free installation is a value-adding perk for many customers. It also gives them the peace of mind that having a particular product installed by a professional will reduce the chances of accidents or loss.
- Free Delivery. Free delivery has become increasingly popular because of many e-commerce stores today. It can give an impression of saving a lot of money when customers make a big purchase. Some sellers offer free delivery under specific conditions, such as only when the amount exceeds a specific limit.
- Trial Periods. Also increasingly common with software/digital products, a free trial period can show customers whether the product is up to their expectations before they make a buying decision. Offering free trials goes a long way in increasing conversion rate and customer satisfaction.
- Updates. This type of augmented product is commonly available in software/digital products. For example, Microsoft offers free updates on its Windows operating system to keep it up to date in terms of security and features.
- Free Samples. Commonly associated with retail products, a free sample is a type of a free trial that lets customers experience what the product offers in a limited capacity. Many consumer categories, like cosmetics, food, health, hygiene, etc., offer free samples to their customers. It helps overcome purchasing anxiety and increases conversions.
- Refunds. A refund is a desirable feature for many customers, especially when they fear the product might not be the same as the seller claims. This type of product augmentation is common in many big box stores around the world. Refunds help build trust and customer loyalty.
Benefits of Augmented Products
Augmented products are a time-tested way of increasing customer loyalty and, as a result, customer retention. Humans are psychologically inclined to like things that bring them value without spending money. When a business employs well-researched product augmentation, it sees repeat customers.
Augmented products spread brand awareness through word-of-mouth marketing, as people like to tell others when they get something for free. This ultimately creates social proof for your products or services. For example, a new ice cream parlor might see more new customers when the word gets around that they are giving free ice cream samples for the first three days after opening.
Standing apart from the competition is a classical benefit of augmented products. It is a proven way to gain a competitive advantage over brands not known for offering things for free.
For example, a famous car dealership in a town might feel challenged by a new car dealership startup that is offering free car inspection to customers.
Enhanced Customer Experience
Augmented products ultimately elevate customer experience and make them feel like they are leaving with something extra. Adding even a tiny perk can go a long way in making your business well-liked by customers.
Starbucks is a case study in this regard, as more than selling coffee, it offers its customers free water, WiFi, and a place to sit with a comforting ambiance. Even if customers don’t spend too much money, they will leave happy and likely return in the future.
Ultimately, it’s all about more profit and higher margins. Every benefit of product augmentation, like repeat customers, brand awareness, and better consumer experience, will lead to more demand and growth. As a result, such a business will scale up consistently with higher and higher revenue figures.
Examples of Augmented Products
Apple TV+ is a streaming service that was launched in 2019. At that time, Apple came up with creative ways to augment this product and create brand awareness. They did it by offering an Apple TV+ subscription free for a year on purchasing their devices like iPhone, iPad, iPod touch, Mac, and Apple TV. Many customers who bought these devices became regular subscribers of their Apple TV+ streaming service once their free membership ran out.
Even today, Apple TV+ features product augmentation in the following ways:
- Access to popular streaming services such as Netflix and Disney+
- Gaming capabilities with the ability to download and play games
- AirPlay for screen mirroring and audio streaming
Spotify needs no introduction as a music streaming service. However, Spotify also offers product augmentation with features like Spotify Wrapped. It is a free campaign that shows users the data regarding their activity on the app at the end of every year. Users can also share these statistics over social media.
Spotify augments its product in other ways, such as:
- Personalized recommendations based on listening habits
- Partnership with Instagram
- Integration with other devices, such as smart speakers
- Offline Listening
Product augmentation is a simple yet effective way of making your customers love you. It lets people know about your brand while bringing you to repeat customers. The key is to understand which product augmentation strategies will go well with your particular product or service.
If you want to learn more about such concepts related to business or entrepreneurship, let us know in the comments!