In the technology universe, two companies dominated most of 2007′s headlines and lined many pockets. Writes Om Malik, founder of Giga Omni Media, “This has been a good year for Apple believers — the stock is up a whopping 138%. In comparison, Google, the other stock market darling is up a mere 54%.”
And 2008 also looks to be another sweet year for Apple. Stephen Coleman, CIO at Daedalus Capital, which is invested heavily in Apple, told Bloomberg News, “There’s so much growth to look forward to for the iPhone.” Coleman predicts the stock will reach $600 by the summer of 2009.
Simply put, Apple understands people. It knows that people make emotional decisions, then use intellect to justify those decisions. Dancing shadow people with iPods aren’t an intellectual argument for buying an iPod, they’re raw emotional appeal.
At the heart of every successful Apple product, you’ll find a deep understanding of what moves people emotionally at many different levels.
It makes sense. When you want to sell things nobody really needs, you have to know what they want. Apple doesn’t create desire; nobody can do that. What it does better than any modern company is pour fuel on our desire with a frothy mix of surprise and delight to get our attention, then provides a simple, meaty, unique, and consistent experience whenever we engage with it or its products. And, of course, it delivers on its brand promise: “It just works.”
While Apple uses traditional means and media to promote itself, it also markets itself in unexpected places and ways. Steve Chazin, former marketing exec at Apple, reveals that those little white earbuds are not white by accident. In MarketingApple, Chazin writes, “Those white iPod headphones were not designed by engineers — they are a pure Apple marketing trick designed to make the visible part of their product a status symbol. Wear white headphones and you are a member of the club.”
This goes beyond packaging and slapping a good-looking logo all over a product. This is finding an unexpected place or way to set yourself apart without interfering with the customer experience.
People are at the heart of Apple’s marketing, not technology or features. The iPod commercials are a perfect example. The audience is first attracted to the people, not the device.
The iTunes music store is another example. While the iTunes store itself has some conversion and customer focus barriers, it rarely fails to persuade people to click in a little further, to listen to a few more samples. It’s a reason other online music stores still struggle. Here, Apple takes advantage of reviews and other customer-generated content.
In the iTunes music store, you’re bombarded with input from other people, not music or video marketing. The reviews are front and center when you look at an individual artist or album, but you’re also sucked in by “Listeners Also Bought” and the user iMixes and Top Songs. You can view celebrity playlists, even Apple staff picks. In iTunes, you’re simply and easily persuaded by others, not by marketers or flash or some social networking technology.
Everything from Apple is designed with intent. Even the product packaging makes the product feel that much more valuable. From neatly packed cords to velvet lining, each step of the unpack is delightful.
Compare that experience with one from Dell: a plain brown box, typical Styrofoam, plastic bags in all sorts of colors, and so on. The experience feels messy. How does that affect how you feel about the product inside the packaging?
Apple is consistent along every touch point, from a Steve Jobs presentation to the website to the product itself. The brand feels neatly organized and clean. In technology this is a delight. How many of us have wrestled with devices, have read clunky manuals, or are just sick of beige? The recently redesigned Apple site has the look, feel, and elements people will find in the operating system.
For now, Apple’s brand strength is unmatched among its competitors. Because it pays attention to people’s needs, people return that attention with money and emotional (sometimes illogical) devotion. This emotional brand connection helps the company overcome some of its problems. That emotion helps customers forgive Apple when it screws up and buy anyway.
Consider some of Apple’s flubs last year, none of which seemed to hurt sales:
- Only a few months after the iPhone went on sale, the price dropped $200. Early adopters were livid, but the feeling didn’t seem to stick.
- The Leopard operating system went on sale later than promised (almost a year), shipped with several bugs, crashed and killed many Macs. Did you see these stories stick like the initial problems Microsoft had with Vista?
- Apple stirred controversy with its options backdating.
- Universal Music pulled out from iTunes store.
- NBC shows were yanked from iTunes.
In our recent “Retail Customer Experience Study,” Apple’s online store scored a wimpy 39 out of 100. But in the online shopping equation, the tactics we measured only accounted for the objective features online retailers offered. If we were to account for subjective measures like brand strength or loyalty, Apple would have a much higher score.
In other words, people trust Apple, so they buy from the store without questioning its credibility and customer focus when buying online.
Our persuasion analyst Melissa Burdon demonstrates this in recent blog post. She was shopping for an iPod on Apple.com and had a question. Her question wasn’t answered on the site. She was frustrated, but she still bought an iPod. (After her post, though, you could find the answer on the Apple site.)
Apple stock may not grow 600 percent in 2008, but it will continue to climb dramatically. Will the day come when Apple becomes too big and loses its focus on people, rendering it an evil behemoth like Microsoft or Wal-Mart?
It may, but not likely anytime soon.
[Reprinted from my ClickZ column this week.]