Apple’s current ad campaign

For those of you who know me best, you’re already familiar with my incessant evangelism regarding Apple’s Macintosh. For those of you who don’t know me that well, just keep reading this blog. But for all my biased chest-beating, even the most anti-Apple critic has to acknowledge the recent strides the Mac has made in the marketplace. First off, Apple increased its earnings 88% last quarter, the company’s stock/equity portfolio is higher than it’s ever been, and well known icons within the PC industry are in the process of making “the switch.”

So how does Apple leverage their success? Simply buy understanding the consumer and building stylistic products suited to their needs. Steve Jobs and his engineers and marketers strive toward building and communicating value to those who believe there has to be more to computing than blue screens, random shut-downs, and indistinguishable error messages. Not to mention, Apple has developed a reputation for taking care of its customers, providing the industry’s highest standard in design, all the while building quality products that put the competition to shame.

The point I’m trying to make here is that Apple is successfully de-commoditizing itself within the computing market by establishing itself as a leader in consumer satisfaction. It’s one thing for a company to claim it’s good at pleasing customers, it’s another thing when the customers are saying it themselves. While Dell is struggling to right itself by opening low-price channels through Wal-Mart, Apple is creating the undercurrent for a consumer revolution that will only help to break the Microsoft hegemony within the market.

In conclusion, Apple has proven that organizations are able to operate with substantial margins within a commoditized industry. If your business is struggling to find it self within a competitive, dog-eat-dog market, remember to follow Apple’s example in focusing on your customer’s needs. After all, customers are the most selfish people on the planet; they only care about what your product, service, or brand means to them. Apple understands this principal, as do most profitable businesses.

Earlier this week, I was engaged in a discussion with a colleague on the way corporations tend to invest their capital. The amount of wasted dollars thrown toward executive pet projects, productivity initiatives, cubical redeployments, senseless non-strategic advertising, and other non-sales generating expenditures is simply mind-boggling. It truly makes me wonder how many companies have ever taken the time to consider what the results would be if they were to redirect a portion of their SG&A expenditure to improving customer relations.

Okay, you’re probably asking “what the heck does Erik mean by customer relations?” To be honest, I’ve never worked with or for a company that has ever concentrated their resources at the customer-level of the organization; every company I know concentrates most of their salaries, bonuses, amenities, perks, and other resources at the corporate executive level. Think about it, how many large organizations pay their frontline employees, namely those who interact and serve the customer, more than keyboard jockey managers back at the office?

I remember the first time I was introduced to this concept during my undergraduate studies over in Finland. My marketing professor asked us to read a phenomenal book by Jan Carlzon titled Moments of Truth. Through the book, Carlzon focuses on his stint as CEO of Scandinavian Airlines (SAS), where he is widely renowned for resurrecting what should have been a dead dog company. The SAS Carlzon took over was destined for insolvency, yet his progressive approach to turning the organization upside down literally saved the company and made it a world force in airline transportation. His strategy was simple: slash resources and expenses at the top and invest heavily in the bottom. Within a matter of months, SAS drastically reduced corporate headcount, frivolous spending (such as corporate-level perks), and useless overhead all the while investing in customer service training, customer-focused sales strategies (in regards to ticketing, seating arrangements, and travel packages), employee bonuses based on customer satisfaction, and salary increases for frontline personnel.

Along with the reallocation of resources, SAS initiated a policy wherein all corporate-level employees were required to work at the frontline level for a designated period of time so as to gain an intimate appreciation for the ticket counter representatives and stewards/stewardesses and the customers they served. Furthermore, SAS adapted a progressive policy of promoting high-performing frontline personnel to strategic positions within the organization so as to help consult other service-oriented personnel with customer-relations. Despite the temporary moral downswing at the corporate level, the frontline employee moral shot through the roof as opportunities opened up for incentive pay and promotions. Guess who reaped the benefits of motivated frontline personnel … yep, the customer.

So as to not give too much away, I do encourage you to read Carlzon’s book and contemplate his advice on marketing to your customers through your frontline employees. In addition to the frontline, bottom-up approach, Carlzon provides great strategic insight to managing a successful firm. Here’s a link to purchase Moments of Truth through Amazon:
Moments of Truth

To conclude, it would be well worth your time to consider how your organization could reallocate its resources to building a stronger relationship with your customers. It might be time to consider how to incentivize those who deal with your customers the most.

I’m in the process of designing a PowerPoint presentation for a major technology firm, it’s entertaining to discover how the company’s engineers are fixated on describing every little detail about a product. To begin my design process, I researched some internally developed presentations built by the engineers so as to gain an understanding of the product virtues … let me just say the slides had more flying bullets than a war zone. These presentations were product-orientated smorgasbord of technical diarrhea.

Although I like to rag on engineers and their linear approach to life, companies often fall into the same mistake of focusing on product rather than market value, on top of over-messaging attributes rather than building a brand by emotionally captivating the customer by relating a solution to their need.

As Doug and I continue to learn and grow with our business, we’re finding out that the customer doesn’t care about how big, fancy, and powerful our product is, they only want to hear what we can do for them in terms of making their life better. Unfortunately, I’ve learned the hard way that my audience doesn’t have the time or interest in learning why I’m so great. And who could blame them? Their lives are complicated and busy, they want to cut to the chase so I better be ready with a strong, precise message that is emotionally appealing, easy to understand, and beneficial in terms of solving a problem or issue.

Going back to the technical engineers, I’ll be ingrained in a lengthy battle to shape these presentations into concise messages that actually mean something to the customer. My job is simply to communicate the three pillars customers look for in why they should consider a product; namely that it is available, easy, and affordable.

P.S. One last tip … avoid talking above your customers’ heads and boring them by using vague and uncommon terminology, your attempt to look smart will probably lose you the deal. Trust me, I’ve learned this the hard way.