Legacy is to Liability what Loyalty is to… Asset
For most people out there, the word “legacy” typically has a positive connotation. Something related to heritage, value being passed from generation to generation, a guiding principle, etc.
To any person involved with technology, the word legacy has a profoundly negative meaning. A system, platform, software or product that you really want to get rid of and start with something fresh. Yet, you typically cannot do that easily, because there is an install base of users, customers, products, still using it… In all companies I have worked in during the last 20 years, there was always a discussion about legacy. How to get out of this legacy, transition to the new, leave the “old” behind. How to not spend money on that old, because it takes you further away from the new, etc. And often discussions about those “legacy” customers that you need to keep serving, yet, you wish they had moved to the “future”. Simply speaking, in the technology world the word “legacy” has been equal to a “liability” and been one of the hottest topics in every company.
One could even speculate that the word “legacy” has significantly increased in mentions, since the invention of computer systems.
Asset vs Liability
If you have read the book “Rich Dad Poor Dad” by Robert Kiyosaki, you know that in financial literacy 101 a key concept distinction is the difference between an asset and a liability. Simply put, a liability keeps taking money out of your pocket. An asset keeps putting money in your pocket. Kiyosaki argues that the house you are living in is a liability. However, a house you are renting out and creates positive cash flow, is an asset. Same house, different use.
A natural question is: if a house can be either a liability or an asset, based on how you treat it, how can a modern company’s legacy be converted from a liability into an asset?
Treating Legacy as a Liability
Many technology companies have been dealing with their legacy as a liability and at some point decided to “pull the plug”. That definitely did not resonate well with their customers. And while I am sure their Product Management teams had done their homework well, the external pressure was so strong that often they had to publicly announce that they revoke their decisions, soon after.
Best example of this, the Sonos case, who in January 2020 announced that products based on their legacy platform will stop being supported and they could not co-exist with products in the newer platform. Just days after the announcement Sonos CEO Patrick Spence tweeted “Thanks for all the feedback & my apologies for not responding sooner. I wanted to make sure we get it right. All Sonos products will continue to work past May”, followed by a public blog post revoking the harsh legacy “cut” with the clean message: “We heard you. We did not get this right from the start. My apologies for that and I wanted to personally assure you of the path forward”.
Even larger companies, like Google, had similar cases with the most recent one from May 2019. With the integration of the Nest brand into its broader line of Google home products, the company announced that it would be shutting down the “Works with Nest” program, an ecosystem with multiple 3rd party services linking to Nest products, now deemed legacy. Days later Google had to post their own “we hear you” message to their customers, with a commitment to keep the “legacy” running for longer…
Treating Legacy as an Asset
There have been companies that at some point treated their legacy as an asset. That means finding ways to keep their existing customers happy, committed and positively surprised. Customers, that even if they have products which are 5, 10 or even 50 years old, are not “forgotten”. Those are customers for whom there is still a value proposition to update their existing products and thus keep purchasing from their loved brands. Either via that specific upgrade/improvement to their current product, or via their future purchases from the brand.
The most recent example I came across was from Porsche who released in April 2020 the “Porsche Classic Communication Management” (press release). A solution to add a Porsche branded “car multimedia system”, with the latest features like Apple CarPlay connectivity, to their classics all the way back the the 911 from the 1960s. This brief video describes it best:
Another example, that I personally worked on, is the Bang & Olufsen Beosound Core, designed to give the latest wireless streaming connectivity technologies to your classic Beolab speakers, all the way from the 1980s… (see blog post: “A breath of new life to your BeoLab speakers”).
In both examples a bridge could be made between the “old” and long lasting, to the modern and contemporary. The original customers did not expect this, as it was not part of the customer promise at the time of the original purchase. Yet, those solutions proved to them that they were still valued customers.
Loyalty
So, back to the question “how can a modern company’s legacy be converted from a liability into an asset?”. The answer is loyalty.
Customers of the old systems/products should not be treated as legacy customers but as loyal customers.
Treating something as legacy, means treating it as a liability. Treating something as loyalty, means treating it as an asset
Treating the loyal customers as an asset means providing to them solutions that will meet their current needs. Current needs does not mean only when selling the product/offering to them today. But also their “current” needs in any future point in time.
How far back can this go? Some companies have proven that they can take this loyalty way back. An example from Patek Philippe that promises to restore any of their watches produced since 1839…
Of course, there are many differences between high-end horology and modern day technology (as discussed in a previous post). Moreover, depending on which space a company operates in and the overall company strategy, there are many different layers of customer promise and needs that can be met. Not all products can be made “future proof” and especially in technology hardware products, there are decisions that have to be “hard coded” in some cases, thus putting limitations on what is possible in the future. However, the solutions do not need to be always seamless product solutions, as they can also be commercial solutions. The key is to always think from the customer point of view and how to add value to a loyal “slow luxury” customer, not just a fast consumer.
Loyalty goes two ways
When companies show loyalty to existing customers, they in turn show loyalty to them. Everyone is in the same boat, as the world is progressing, transformations and disruptions happen. Be loyal to those customers and help them progress and they will be loyal to you as a company, while you tackle what has to be done to help you progress. But if you fall out of love with your customers, and in love with your solution, then you start to die. Treat all your customers as loyal assets. Not as legacy liabilities.
