TrackR and the Network Effect
A recent marketing campaign has been going viral on Facebook. The technology is called TrackR, and it does just what its name implies. However, there’s a twist: this tracker uses GPS technology to crowdsource the finding of one’s lost items. TrackR advertises: “If an item goes missing, TrackR’s Crowd GPS network will help you find it. When another user of the TrackR app comes within 100ft range of your lost item, you will receive a GPS update of where your item is”. This suggests that the more people who adopt this technology, the most utility each user gains from owning it, as the probability of someone else coming within 100ft of your lost item drastically increases.
We just showed that the utility one gains from owning a TrackR is a function of the number of people who own TrackRs. Therefore, it is evident that the network theory is in play. TrackR’s marketing campaign thus seems to suggest that the company is trying to grow adoption past their “tipping point”, after which the success of the TrackR will drive itself to the stable equilibria. A part of this marketing campaign was offering “cheap” or “free” TrackRs to those were are early adopters. This model works well, as it broadens the market of those who are interested in buying TrackRs initially, propelling TrackR closer to its critical mass.
To let those interested in purchasing TrackR know about the lofty adoption rate, TrackR sent out an email stating: “there will shortly be over 5 million people on our Crowd GPS network”. The purpose of doing this relates strongly to concepts learned in class: by marketing that the TrackR technology has gained a 5 million person customer base, potential buyers’ perceived “z” value, or the fraction of the population using the good, increases. This increases consumer sentiment, and therefore incentivises potential consumers to buy to product. Well played, TrackR!
