Archive for the ‘Apple’ Category
Last Spring, I wrote about opportunities for improving your brand by focusing on the customers experience in areas that may not be directly under your control. The main point of the post was that what the customer sees as the total experience may be broader that what you think it is. It doesn’t matter if the customer encounters a problem outside of “your” area of responsibility; to them it’s still part of the overall experience and can reflect poorly on your brand. These experience extensions are often delivered by third parties who don’t necessarily have the same customer objectives as you, but sometimes, inconsistent customer experiences can be due to a problem internal to an organization. A recent personal experience with Apple makes for a good case study.
Apple excels at designing great technology experiences. They completely dominate the portable media player market. They have redefined what a cell phone is and sales of Mac computers is growing faster than any other brand in the US driven by a highly effective and popular ad campaign.
Apple has also done an amazing job expanding from a technology manufacturer to a retail powerhouse. On average, Apple stores generate over $4000 per square foot per year. That more than four times what Best Buy produces. Apple has invested heavily in creating a retail shopping experience which is both innovative and compelling.
This Christmas, I was compelled to purchase a MacBook as a present for my daughter. The sales experience was simple and fast and I walked out feeling really good about the purchase. My daughter, who loves to create and publish videos, was thrilled with her new computer. That is until it died five days after Christmas.
I was a little surprised. This was after all, a Mac. They’re better than PCs; they just work, right? In fairness, all technology products have their share of defects and from my research, Apple makes some of the most reliable computers on the market, so I don’t think this failure is indicative of a general quality problem. My first response was to go to Apple’s website to see if it held any information about the series of beeps that we got trying to boot. Surprisingly, I didn’t find any there. I then checked Google and quickly discovered that the beeps indicated that the RAM wasn’t being detected.
I spent the next hour and a half on the phone with about an hour of that time being on hold. The tech that I was working with could not diagnose the problem and kept putting me on hold to consult with product managers. He eventually sent me to one of those project managers who, after twenty more minutes on hold, told me that I had (surprise) a memory problem. I’m no “genius”, but 90 minutes to tell me what I already knew doesn’t seem very smart. The product manager then told me that he would give me an address where I could ship the computer to be repaired. That came as an unexpected and downright irritating surprise….
WHAT!?!? It’s only five days old, it’s dead and you want me to ship my daughter’s new Christmas present off for a couple of weeks to be repaired?? I’m thinking, “How does this experience support the Apple brand?”
OK I didn’t say any of that, but I did ask if I couldn’t simply take it back to the store. The product manager responded (and I’m not making this up) “Yeah, you could try that. They might have some extra memory laying around”.
I told him that I wanted to try that option first. Having previously dealt with a defective iPhone, I knew that I would have to make an appointment or risk waiting at the store for a few hours on standby. With my iPhone, AppleCare made the appointment for me so I asked the product manager if he could schedule an appointment for the computer. He responded by telling me that I could only schedule appointments for the current day since I had not paid the $99 fee that gives me the right to preferential treatment. Apparently my $250 extended warranty doesn’t get me any preferential treatment like it does at other CE retailers. Given that it was after store hours on Sunday, he told me that I would have to try to make the appointment myself early the next day.
On Monday morning, I went to Apple’s website at 7:30 am only to be informed that my store didn’t have any availability. At 10:00, I called the store to see if I could get an appointment, but the recorded message told me that they are unable to schedule appointments over the phone. The only option for tech support was to transfer me back to AppleCare. I did that hoping that they could possibly schedule stand-by appointments. No such luck as the AppleCare people could only see the same screen that I saw.
Finally after investing over two hours in this process, I got in the car and drove to the store with the dead MacBook. Entering the store, I was immediately approached by a very helpful employee who was able to get me scheduled with a genius in about 20 minutes. I told her about the problems I was having trying to schedule the appointment and she told me I “could have just pressed 5 when I called the store and they could have scheduled me over the phone.” (Doh…) I started to explain that the recorded message said otherwise, but just let it go.
Thirty minutes later, the problem had been diagnosed as both bad memory and a bad disk drive. I ended up getting all the personal data and software loaded to a new machine.
So here’s how I perceive the Apple brand based on this experience:
- The user experience design for Apple’s technology is excellent.
- Apple’s in-store retail customer experience both before and during the sale was excellent.
- The AppleCare phone support experience was terrible on several counts.
- Apple Retail’s in-store tech team was highly responsive and deserves the credit for salvaging a bad experience.
Apple, like many organizations, operates a number of divisions who each contribute to the success of the business. When all of those divisions are equally focused on delivering great customer experiences, the brand image is enhanced. But when one or more don’t deliver a great experience, the brand is diminished.
Make a point to regularly examine all of your customer experience touchpoints to ensure that they are consistently deliver experiences that enhance your brand. Then act quickly to turn those deficiencies into opportunities for enhancing your brand image.
Just saying you are focusing on innovation and spending a big chunk of change on “being innovative” does not automatically lead to innovation success. Lots of CEOs have jumped on the innovation bandwagon in the last few years declaring, like Ford Motor Copmany, that Innovation is their new mission. Most of those companies, like Ford, have not seen their business improve as a result and some have started to curtail their investment in innovation. The problem, as I see it, is that these CEOs have latched on to the idea of innovation as some sort of magic bullet. With lots of fanfare they tell the organization to “start innovating” and then get frustrated when the billion dollar winning ideas don’t materialize fast enough. Soon, innovation in the organization goes the way of previous magic bullets like Six Sigma or TQM.
Still, there are companies like Toyota and Apple who have seen great success as a result of their innovative ideas. What makes them different? For these companies, innovation is not a program layered onto the existing organizational framework. It’s not just a marketing pitch. It’s not a subset of your top talent sequestered in a room for a couple of days a week to come up with the next big idea. It’s just part of their chemistry. It’s ingrained in their culture.
This past June, The Economist ran a story on innovation at Apple and highlighted four lessons that other companies can learn from the “master of innovation”.
- Innovation can come from without as well as within: Not all innovation has to be manufactured from scratch. Apple didn’t invent the MP3 player or the mobile phone, they just redesigned them. Oftentimes it is stitching ideas together to make a more seamless experience that is more important.
- Designing new products around the needs of the user: The Swiss Arm Knife may have been a great innovation, but don’t believe that a product will sell itself if you can force enough features into it. Focus instead on fewer features that are developed around the needs of the users and executed in an intuitive way. In other words, make you product more “experiential”.
- Sometimes ignore what the market says it wants today: While it’s important to listen to your customers, don’t limit yourself to what they are asking for. Nintendo proved this to be true last year with the introduction of the Wii with its motion-sensitive controller. The market had been saying more realistic graphics, HD output, etc. Nintendo went for a better experience through the human interface and disrupted the competition in the process. Consumers did not ask for the MP3 player, the microwave oven or any number of other innovative products that we can’t live without today but, relating back to lesson #2, we did have needs and companies that had a keen understanding of those needs and the ability to leverage new, disrupting technologies, were able to translate those needs into innovative products.NextUp › Edit — WordPress
- Fail wisely: Don’t stigmatize failure. Failure leads to learning and should be tolerated, even encouraged where risks can be minimized. The article points out that before the Macintosh, Apple had the Lisa failure and that the iPhone was born out of the music phone that Apple produced in conjunction with Motorola. While my former employer’s innovation program had it’s flaws, this was one component that was understood and embraced. “Fail Early and Fail Often” was the mantra. The idea was to be constantly looking for and testing many innovative ideas, knowing that most of them will not make it past the first business acumen checkpoint. That’s ok. It’s better to kill of the ideas that are not going to fly and learn from that failure as you move on to the next idea.
Will these basic concepts make you a successful innovator? Not necessarily, but I think they are foundational. What other innovation lessons do you believe are foundational?
(image courtesy of Getty Images)
Its been a while since I wrote critically of Sony, but a piece by Randall Stross in this weekend’s NY Times reminded me of a similar exercise that I did a few months back with Samsung and Nokia. In his article, Stross compares experiences at both Apple and Sony’s Style stores and points out some of the reasons why Apple is so wildly successful and Sony is not. Here are Stross’s key points with my commentary:
People vs Product: Everyone knows the Apple story. Over half of the store’s staff is dedicated to post-sale service; Free, one-on-one consultation, with “Geniuses”. This recognizes that your engagement with a brand is only starting at point of sale. The real engagement is made or lost as you use the product. Apple makes sure that you are going to get the most out of it. As a side note, they also get the concept of Marketing as Storytelling as demonstrated by “The Geniuses”. Sony, on the other hand, is all about the thing itself. They have a much broader product line of electronics, which could give them an advantage over Apple if they focused on the value those things can bring to your life, but instead, the engagement exercise is all focused on the pre-sale marketing of the stuff.
Function vs Fashion: According to Dennis Syracuse, senior vice president for Sony Retail, the Sony Style stores are intended to be a “fashion boutique for women and children” that incidentally happens to carry electronics instead of clothing. Wow, that seems a bit shallow. How successful are you going to be targeting women who only want that red notebook because it coordinates so well with their outfit?
Engaged vs Disengaged: Stross describes the experience of walking past a number of Sony employees who were “so engaged in a private, and apparently amusing, discussion that <his> imploring presence failed to draw anyone’s attention.” He speculates that they have become so used to inactivity in the store that had “become accustomed to busying themselves with their own entertainments.” At a nearby Apple store, the employees were always alert and attentive, despite being very busy. I’ve been in a lot of Apple stores and this just seems to be part of the culture. For Apple, some of this has to be due to the enthusiasm of the owners to the products themselves. Engagement can be a circular thing. Engaged customers tend to make employees more engaged and visa-versa. Regardless of the source, the engagement is real and is a huge differentiator.
Stross closes the article suggesting that perhaps a key differentiator IS having some amazing piece of hardware (running Windows) which will bring in the people. Once they are in the store, they might see the other products in a different light. This is where I think Stross misses the point. Sure Apple has great products that people are passionate about, but it’s not because of their technical specifications, its the experience delivered by the product, the store and the employee.
What do you think? If you are a retailer, do you get it?
Steve Ballmer says, “There’s no chance that the iPhone is going to get any significant market share. No chance.” Predicting the future of the iPhone is perfect bait for marketing pundits everywhere. How about a pool and we’ll see who’s as smart as they pretend to be? So, I invite you to make a prediction, trackback it here and a year from now, we’ll take a look.
I agree with Seth; the iPhone will be big this year and even bigger next year. Here’s why:
- People, especially young teens, are totally engaged with the Apple brand.
- The cell phone and the iPod are probably the most important possessions a young teenager has.
- It will be the ultimate aspirational gadget for young teens. Having the coolest iPod and phone are status symbols for them; they get you attention. If someone else has a RAZR, you will drive your parents crazy begging for one, even if you have a perfectly good phone (voice of experience talking)
What do you think?
Olga Kharif at Business Week believes the Apple iPhone will disrupt the cellphone upgrade model. That model says that users generally replace their phones every 18 months. They do this for a number of reasons: Phone is broken or has battle scars, new features, new styling. The biggest reason, of course, is that the industry enables it by giving free or cheap phones when you agree to a new contract.
In a recent article, Olga’s makes this argument:
“The new iPhone from Apple….brag[s] touch screens instead of buttons. That means that if cell phone makers or carriers decide to add new functionalities to these phone when they are already in use, they could, potentially, do that over the air. Want to enable consumers to shoot, edit and post videos to a mobile site in a new way? Just send them an application with virtual buttons that will appear on their touch screens and allow for this application’s use.
If consumers are able to get new applications this way, I think some of them will stick with their phones longer. After all, today’s phones all feature cameras and Web access. Unless handset makers come out with additional hardware making replacing handsets every 18 months a must, I don’t see why consumers will keep on changing their phones as often, especially since the phones’ prices seem to be on the rise. After all, with a simple software upgrade, users will be able to drastically change their phones’ looks and functionalities anyway. So, why splurge on a new phone?”
She goes on to ask her readers if they agree. The article is short, but the list of comments is long and each side makes good points.
Here’s my take. The upgrade cycle today is controlled by the carriers. Apple wants to change that. The iPhone may be the hottest CE product of 2007 and millions of people will pay the premium to get it. Once that happens, and assuming that the experience lives up to the Apple brand (and the hype), people will not be so eager to upgrade just because their contract is up. Assuming that the 5 year exclusive deal with Cingular doesn’t change, they won’t really be able to switch anyway. Being touchscreen based does not make the iPhone an infinitely extendable platform (sorry Olga). There will be ongoing evolution of the technology, just as there has been a steady stream of product improvements to the iPod. This is what will drive the upgrade cycle for iPhone users. The cycle may remain at around 18 months, but it will be the product itself that shifts the control of the cycle to Apple.
What do you think????
Pulling off quite a coup, Wal-Mart has entered the movie download business with a bang. In the announcement today, the company announced agreements with all six major movie studios — Walt Disney, Warner Brothers, Paramount, Sony, 20th Century Fox and Universal — to sell digital movies and television shows on its Web site (www.walmart.com/videodownloads), becoming the first traditional retailer to do so. Wal-Mart, who lost the battle against Netflix on DVD rentals two years ago, sees that the bigger opportunity is in downloads.
The move plunges Wal-Mart into direct competition with established players like Amazon.com, CinemaNow and the 800-pound gorilla, Apple’s iTunes. Wal-Mart will face a number of challenges. Apple dominates the digital download space, leaving only a very small share of the market for others to scrap over. And where Wal-Mart is the king of retailers, they have no real competence in digital distribution.
What they do have is clout and they have leveraged that clout to do what Apple has been unable (or unwilling) to do: to pull together all the right Hollywood players. Wal-Mart has also partnered with Hewlett-Packard to create an easy-to-use Web site and develop a broad library of videos.
Movies will run from $12.88 to $19.88 on the day the DVD drops, while older flicks start at $7.50. All movies will have roughly the same price as the actual DVD at Wal-Mart stores, though. Not sure why download customers would want to fork over almost what you’d pay for the actual DVD, but then again, I’ll do just about anything to avoid going to a Wal-Mart. The pricing is designed to protect the DVD business which will keep the studios (who have considerable clout themselves) happy.
The service will have TV shows from Comedy Central, CW, FX, Logo, MTV and Nickelodeon. Major networks are not in the mix as of now. TV shows run a bit cheaper than iTunes, at $1.96 a pop. Altogether, it will offer “access to 3,000 productions,” with the mix split roughly 50/50 between movies and TV shows.
Just as MP3 downloads have disrupted the CD business (just ask Tower records), digital movie downloads will be disruptive to the DVD business and possibly other CE products such as DVRs. You can already watch recent episodes of ABC shows for free. If, in the near future, I can get high-def downloads of shows that I missed, why pay for a hi-def Tivo and the monthly subscription that goes with it? This disruption could also impact CE retailers who do not move into the digital distribution space. The war is just starting, but it will be interesting to see how it develops.
<via NY Times>
It was bad enough that ,when given the first opportunity to be the exclusive carrier for Apple’s new iPhone, Verizon turned it down. Now, Verizon’s President and COO Denny Strigl has gone on record as saying,
“The iPhone product is something we are happy we aren’t the first to market with.”
Yeah, that makes a lot of sense. Wouldn’t want to be first to market with what will be the hottest product of 2007, now would we? The back story, according to The Register, is as follows:
The problem seems to have been Apple’s insistence in sharing the call revenue as well as controlling distribution channels and customer service.
Verizon vice president Jim Gerace (one of many veeps at the company) said: “We said no. We have nothing bad to say about the Apple iPhone. We just couldn’t reach a deal that was mutually beneficial.”
We can only assume that Cingular did agree to such a deal, and guess to what heights that will drive the cost of the two year contract it is demanding from iPhone purchasers.
Cingular said it inked the deal with Apple more than two years ago, when the iPhone was no more than a couple of sketches and concepts; such was its belief in the Apple brand and abilities.
It never ceases to amaze me how shortsighted companies can be and Verizon appears to be shining example. They are a victim of their Orthodoxies. Cingular, on the other hand apparently saw opportunities in doing business Apple’s way. Apple has mastered the art of delivering a great Customer Experience; from the user interface on the device, to the human interaction in their stores. Cingular knows that customers are going to want this thing and sees opportunity in increasing their subscriber base even if Apple gets most of the ROI on the phone. Cingular has been good at Sensing what the next hot device will be and Responding by getting exclusive access to it early in the product cycle when the highest margins can be demanded. They did it with the Motorola RAZR (Verizon was the last major US carrier to get it) and the iPhone looks to be an encore performance.
If you’re thinking about getting the AppleTV next month then you should checkout this walk through of the interface. It looks very slick. Again, Apple has scored in making a piece of hardware (AppleTV) and software (iTunes) that integrates seamlessly and makes it quite easy to use. Beyond being seamless and easy, there is something else about the interface design that really clicks with me. Perhaps it’s just the “cool factor” that seems to come naturally to Apple engineers or the fact that the interface itself is both beautiful and entertaining. Whatever the reason, the design is totally engaging and very well may be disruptive to the CE industry which has been unable to find a way to make products that are easy to integrate & use, and also exciting for the consumer.
When I heard a while back that Cisco owned the trademark for the name “iPhone”, I figured Apple would either negotiate a price for it, or go with a different name. When they announced the”iPhone” yesterday, I assumed that the price had been paid. Guess I was wrong as Cisco has filed suit over the trademark infringement. Read the complaint here.
Shaun Smith over at The Perfect Customer Experience has a great post today in which he discusses Apple and Harley-Davidson as being Brands that have reached the Customer Advocate stage.
Advocacy at this level is rare and beyond the reach of most consumer companies let alone professional services firms. Yet, the principles hold true whatever the nature of your industry and customer base. The fact is that delighted customers have an affiliation for the brand that translates into bottom line growth.
So how do you create a level of customer satisfaction that is so strong that customers become your best sales people? The answer lies in creating a customer experience that is so distinctive and valuable that it goes beyond satisfaction. Jerry Gregoire CIO for Dell computers says “The customer experience is the next competitive battleground” Michael Bray Chief Executive Officer for Clifford Chance said this about customer experience “… equally relevant for the leaders of professional services firms looking to build ‘trusted advisor’ relationships with their key clients.” Jill Griffin, in her book ‘Customer Loyalty: How To Earn It, How To Keep It’ suggests a useful ladder of customer relationships which brings clarity to this issue.
Stage 1: Suspect. Suspects include everyone who might possibly buy your product or service. We “suspect” they might buy; we do not know enough yet to be sure.
Stage 2: Prospect. A prospect is someone who has a need for your product or service and has the ability to buy. Although a prospect has not yet purchased from you, he or she may have heard about you, read about you, or had someone recommend you to him or her.
Stage 3: Disqualified Prospect. These are prospects about whom you have learned enough to know that they are not the best fit for your products and services and so you may choose not to target them.
Stage 4: First-Time Customer. First-time customers are those who have purchased from you one time. They are customers of yours but are almost certainly still customers of your competitor as well.
Stage 5: Repeat Customer. They have purchased from you two or more times. They may have bought the same product twice or bought two different products or services on two or more occasions. They will buy from you but will also continue to give their business to competitors. In professional services you may be one of a number of firms on their panel.
Stage 6: Loyal Customer or Client. A loyal customer or client buys from you rather than anyone else. You have a strong, ongoing relationship that makes him or her resistant to the pull of the competition. For professional services firms this is where you begin to make the transition from being a supplier to trusted advisor. You are ‘top of mind’ and the first firm that a client calls when they need help.
Stage 7: Advocate. Like a client, an advocate buys everything you have to sell and purchases regularly. In addition, an advocate encourages others to buy from you. An advocate talks about you, does your marketing for you and brings customers to you. >p>Brands like Virgin, Apple and McKinsey all have advocates who are happy to be unpaid sales people for these companies. For professional services firms this is when you create a relationship for ‘life’. You are likely be the preferred supplier for this customer whichever company they happen to work for. You may have a seat at the planning table when they think about their longer term strategy but will certainly get advance notice when the client is thinking about a deal.
While Apple gets that whole Customer Experience thing, Best Buy apparently does not. Engadget reported yesterday that Best Buy customers who signed up for a PS3 pre-order from Best Buy’s online store are getting the cold shoulder from the mega retailer. Best Buy sent out a curt email to customers the other day saying,
“Your preorder for the PlayStation 3 gaming system will be canceled.”
Best Buy says that its online store system was not “intended to take preorders,” despite the fact that Best Buy availed its online store system to just such an purpose. As a consolation, pre-order customers are getting a $10 Digital Coupon towards a future http://www.bestbuy.com purchase, but we’re not sure that’s going to do much to cheer up little Jimmy on Chrismahanukwanzakah morning.
“I looked at the long lines at the registers and thought twice about buying one. Just as I was about to bail out, a sales associate asked if he could help me. I asked to see a Shuffle. He took one from a passing colleague, showed it to me and said if you want to buy it, I can check you out here. I said, “great!” He then pulled out a small credit card authorization device, swiped my credit card and offered to email me the receipt. A moment later, he pulled a bag out of the bag he had slung over his shoulder, put the Shuffle in and I was on my way. All in less than 5 minutes. Now, that is an exceptional retail experience.”
“Line Busting” with wireless technology is not new, but most retailers don’t use it. When the store is busy, like during the most critical time for retailers (November/December), most retailers the make the customer stand in line for the register. People are busy and having to wait to pay is a big source of dissatisfaction. Apple is once again showing others how to put the customer first by enabling everyone on the floor to be “the register”.