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Apple

Stop Trying to Put the Square Peg into the Round Hole: What It Means To Understand Your Customers

psychological and social forces are at play every single moment of every single day of our lives. These forces shape our customers' worldviews.

In our book Customers First, we looked at some of the world’s biggest brands—companies like Apple and Nike—to discover how they connect so effectively with their customers. To build powerful, profitable connections, it helps to understand that customer behavior is driven largely by a combination of psychological and social forces that are at play every single moment of every single day of our lives. These forces shape our customers’ worldviews. 

Once you understand what those forces are, it becomes much, much easier to craft messaging that resonates effectively with the customer.

That sounds easy enough, right? There’s only one little problem: these forces that are so pivotal and compelling are also largely unconscious. The customer is often wholly unaware of them.

Customers don’t understand the real reason they started shopping at Nordstrom’s more and Bloomingdales less. They don’t know why a burger and fries at Wendy’s seems more appealing than a burger and fries at Burger King.

If you ask customers directly about their purchasing decisions, they’ll likely have an explanation to share with you.  Maybe they’ll show you a 20% off coupon or cite a location’s convenient, pleasant atmosphere as the reason they opted for one business over another.

Listening to those explanations and hearing the reasons consumers give about their shopping preferences is important.  It’s a practice that every good business should engage in. Companies that are interested in transitioning from good to great need to take the process one step further. They need to dig a little deeper and understand why those reasons matter to the customer.

Let’s look at that coupon for a moment: On the surface, the appeal of a coupon is easy to understand. The customer enjoys getting a discount. They like the fact that they save money when they make a purchase.  It’s kind of a no-brainer. Everyone likes to save money.

Yet, not all discounts have universal appeal.

What It Means To Listen To Your Customers

In 2012, JCPenney made headlines with a new marketing strategy that included eliminating both coupons and sales events while slashing merchandise prices significantly—in some cases, up to 40%. Forbes called the Fair and Square approach refreshing and daring. They said that J.C. Penney would be “the most interesting retailer of 2012.”1

If by interesting, you mean a 20% sales drop in the first quarter (and a 19% drop in same-store sales—ouch!) then Forbes was right on the money.

If those aren’t the types of results you’re interested in for your brand, it might be worth considering why the Fair and Square approach wasn’t a good fit with Penney’s customers.  That involves examining discounting, and especially coupons, with an understanding of how these retail tools are perceived by the customer’s unconscious.

One type of unconscious psychological force is known as a biological driver. Biological drivers have played a critical role in humanity’s survival as a species. When we think about early humans, it’s easy to imagine them working hard, scouring their environment for nourishing food and natural resources they could capitalize on to make their lives easier. 

The person who did the best job at identifying and acquiring resources generally turned out to be the healthiest, wealthiest, and strongest in their society. That means those people were more likely to wind up in a position where they could safely and effectively raise families.  When this cycle plays out over hundreds of thousands of generations, we wind up with a competitive drive hard-wired into our collective psyche.

Today, not many of our customers are worried about where they’ll find their next meal or some shelter from the elements. Ye,t the compelling drive to seek out needed resources—more efficiently and effectively than anyone else—remains.

When a customer uses a coupon, they’re doing more than saving money: they’re using their skills and savvy to fulfill a deep abiding need to search, gather, and acquire in the most effective and efficient way possible. They gain social capital from this process as well. 

The woman who brags about getting a great outfit for $89 because she has shopping smarts (and a great coupon!) is the sister of the woman who countless generations ago knew that if she stood in stream-side shadows she could spear more fish than anybody else.

Just saving money isn’t enough.

When JCPenney focused on the Fair and Square approach, they ignored the why behind their customers’ decisions and failed to support their psychological needs to feel like they’ve made the effort to provide and to feel like they’re gaining social capital by being savvy.

Good companies succeed because they give their customers ways to fill deep, compelling, unconscious needs. Great companies take market leadership positions because they understand why it works.

Great companies don’t waste any time, money, or resources trying to pound square pegs into round holes. They just get a round peg—the combination of messaging and operations that customers find both relevant and compelling—and then they win.

Watch out tomorrow morning for a special announcement from The Cult Branding Company.

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August 10, 2021 by

Watching the Winds of Change: Hurricane Sandy & Apple

Hurricane Sandy has secured its place in the  history books. The mammoth hurricane came late in the season, taking an unusual track through New Jersey toward the center of the country, lasted for days, and created billions of dollars worth of damages. Much of lower New York, including Wall Street, shut down for Sandy’s arrival.

Against that backdrop, a business news story has to be a pretty big deal indeed to capture any attention. Apple delivered, choosing Monday to announce major changes to their leadership team. Long-time Jobs protege Scott Forestall, head of the iOS division, is on his way out the door, as is retail store head John Browett.

Deriving Actionable Information From An Uncertain Environment

Hurricane Sandy and the Apple management shake up have one trait in common. Both events introduce a huge amount of uncertainty into the lives of many.

For people living along the East Coast, knowing where the storm would hit, how intense it would be, and what type of winds and precipitation it would deliver, dictated their decision making.  Should they evacuate? Should they stay put? These are life and death decisions that have to be made in the absence of perfect information.

Apple’s investors and brand loyalists are watching Tim Cook and the remaining leadership with the same intensity those in Sandy’s path watched the Weather Channel.  The company’s been through a lot, and it doesn’t look like its been weathering the storms with grace. After losing Steve Jobs, Apple finds itself in an increasingly crowded and competitive gadget marketplace. Apple Maps floundered badly out of the gate, very visibly. Are the winds of change lining up to blow Apple out of its long-held dominant position?

In many ways, Hurricane Sandy was very different from the typical hurricane. It brought together combinations of meteorological factors that many weather forecasters had never seen before. Despite this, the track, intensity, and duration of the storm was predicted with a fairly high level of accuracy. This is due to the robustness of the models used in weather forecasting, where historical data is combined with scientific insight about the behavior of storms. The information generated is reliable enough to guide life-or-death decision making.

A similarly robust model can be built for any brand. Bringing together historical data, focused on identifying those factors most responsible for brand success, coupled with psychological insight about the behavior of customers, results in a Brand Model organizations can use to identify the direction most likely to result in profitable growth.  This type of information is critical to have when guiding a company through a difficult period.

Will Tim Cook’s move toward a more collaborative, unified leadership structure result in an increase in the innovative, empowering devices that allowed Apple’s most loyal customers to express themselves so well? Or is he removing a vital element to the creative process, gutting the company’s vision at exactly the time it is needed the most? Close observation of consumer response going forward will provide the answers to these inquiries, and if he’s smart, Tim Cook will be listening.  That’s the only way to steer your company through the winds of change.

 

November 6, 2012 by

Being the Apple of Their Eye

PhotobucketBy now you’ve heard the news that Apple has been recognized as the world’s largest company. We can’t say we’re surprised. We’ve been fans of Apple for years. Our enthusiasm isn’t tech-based (although we love our iGadgetry as much as anyone), but is instead borne out of the intensely intimate focus Apple has on understanding and serving their best customers.

The Power of a Cult Brand

Ask any analyst or industry insider what Apple sells, and they’ll rattle off a list of items: the iPhone, the iPad, the Mac. They’re all right, and they’re all wrong. What Apple really sells, and the reason why Steve Jobs was able to steer the organization to such a dominant position, is creative empowerment.

Human beings are complex creatures. We like to think we’re logical, and that all of our decision making comes from a rational, objective place. What Apple, and other dominant organizations like Harley Davidson, Ikea, and Nike—companies we call Cult Brands—realize is that while logical considerations certainly have some weight, they’re hardly the most pressing factors guiding consumer decisions. The feelings and emotional associations consumers have with your brand is the ultimate driver of purchasing behavior and enduring customer loyalty.

In many ways, the consumer views brands the same way they consider their own personal wardrobe. They choose outfits for many reasons: to project a particular image, to attract others, to express their personality—clothing is, ultimately, an expression of identity. They form brand relationships the same way, choosing the organizations they view as the best extension of their selves.

No one stands in line for three days to buy a cell phone because it offers better coverage or has a longer battery life. People stand in line for three days to buy a cell phone because they love the way it makes them feel.

Apple commands fanatical loyalty because they’ve identified and found a way to represent what many, many people consider an integral part of their very best self. This best self is creative, focused on appreciating beauty in many forms. This best self is social, centered on connecting with friends. This best self is generous, sharing everything from personally penned profound thoughts to funny pictures snapped on vacation. Unconsciously or consciously, most of Apple’s customers believe that they are already creative, social, and generous. Unconsciously, they believe that owning an Apple product makes them more so.

If you’re going to be a dominant organization, you need to know, intimately and in great detail, who your customer’s best self is. Delving into and defining the qualities they see as most important in themselves (a process we call Brand Modeling) will help you understand the qualities and type of experience they want from you. Apple does this at every touch point, on and off line. That’s not saying they do everything perfectly; there are always bugs to be discovered. But they address the imperfections in a way that their best customer’s best selves recognize and appreciate.

One is left to wonder what’s left for Apple. After you become the biggest brand in the world, what’s left?

August 28, 2012 by

Rotten at the Core? Apple’s Alignment Problem

Work hard on the job today or work hard to find a job tomorrow.

That isn’t the message most of Apple’s Brand Lovers would expect to find hanging on the wall of their favorite tech company’s manufacturing facility. It seems a little too Dickensian in sentiment, a world removed from the sleek gadgets tailor made to empower and encourage the creative spirit.

But there it is, right in the middle of a NY Times investigative report: In China, Human Costs are Built into an iPad.  Reading this, we learn how Apple’s supply chain is fraught with difficulties. Safety and environmental concerns top the list. People have died. There have been multiple explosions at manufacturing facilities—blasts, experts say, that were completely avoidable. Toxic materials were used in the production of iPhones, driven by what Supply Chain Digest calls “aggressive procurement practices.” Allegations of child labor, punitive practices in the workplace, and high rates of suicide round out the list.

There is a culture of secrecy and silence around Apple’s manufacturing practices; vendors sign confidentially agreements so sweeping that they’re barred from disclosing they’re working for Apple at all.

Customers First: Understanding the Pillars of Belief

Of all of the challenges that Apple has faced over the years, this situation holds the most potential to break the brand.  There is an obvious and fundamental disconnect between the way Apple is conducting business and the way that Apple’s Brand Lovers would expect Apple to do business.

Now, until this point, it’s probably fair to say that the vast majority of people who use and enjoy Apple products never once thought about how all of that iTech was actually made.  But if those same people were asked asked about how they thought their iPhone or iPad was made, we’d hear a range of responses based on the beliefs and assumptions that those customers have about Apple as an organization.

The Pillars of Belief articulate the beliefs that our best customers have about our company. This can be a simple but all important question, such as “Are they honest and fair? Are they the type of company I want to do business with?” Questions like these can help uncover the beliefs customers hold about your company that influences their buying decisions.

Brand Lovers strongly prefer to do business with companies whom they believe reflect their own personal belief system. They’re seeking those points of familiarity, of personal resonance, where their perception of your brand meshes closely with the cultural stories they hold most dear.

Problems arise when an organization’s performance, in any sphere of operations, gets out of alignment with the Pillars of Belief.  The Apple Brand Lover has expectations based upon their belief that Apple is a company that empowers and elevates people’s existence. The discovery that this product is made in a nightmarish sweatshop environment is out of alignment with that belief.  This disconnect introduces a tension into the customer-brand relationship; a tension that customers may resolve by abandoning their once-beloved iGear.

Apple has been making moves to remedy the supply chain issue, but as both the NY Times and Supply Chain Journal have noted, those efforts have been perceived as lacking and entirely secondary to the need to produce the new iGear as quickly and profitably as possible. Bringing Apple back into alignment with their Brand Lover’s expectations will require greater efforts to remedy existing problems, as well as increased visibility and transparency.  Only then will Apple be acting in a fashion that their Brand Lovers expect. That’s what it means to put Customers First.

February 15, 2012 by

Saying Goodbye: Steve Jobs

PhotobucketBy now, you’ve heard the same news that has saddened us.  Apple founder and visionary Steve Jobs has passed away.

We’ve made no secret of our admiration of Apple. There’s  just so much that Apple does right. That’s why they’re one of the few, elite organizations called Cult Brands. The responsibility for Apple’s success is due to the leadership of Steve Jobs.  It is with sincere and lasting admiration and respect that we offer our condolences and best wishes to Steve’s family, friends, and the extended Apple community.

It’s impossible to think about Steve Jobs without marveling at the impact this man, this one single man, has had upon the world.  His influence shows not only in the technology we use, but in the way we do business, communicate with each other, and view the role of individuality and creativity in our individual and collective lives.

Steve Jobs didn’t do this by selling MacBooks and iPhones to the masses.  He did it by selling his customers what they wanted the most: personal empowerment and self-fulfillment.  Steve Jobs’ genius, if we must pick a single one to name, was to thoroughly understand his customers.  He was tapped so deeply and completely into his loyal customer bases’ psyche that he understood what they wanted and why they wanted it. Using this knowledge is what propelled Apple into a dominant organization in the marketplace.

When customers buy Apple, they’re buying into the belief system that they can be amazing.  That’s Steve Jobs’ gift to the world. There are no limits anymore.  There are no barriers of entry to a life filled with creativity, connectivity, music, video, games, and play. You just need the right technology, and you can transcend class, background, or a serious lack of talent. It’s a message strong enough to build a community around  and a community people couldn’t wait to join.

For Steve, bringing people to the Apple community looked effortless.  Some said he had an intuitive marketing sense; others that he was a born salesman. We think it comes down to Steve’s (and by extension, Apple’s) practice of putting the customer first.  His ability to focus on what his customers wanted, in every aspect of their engagement with his company, and deliver that consistently in ways that surpassed their expectations serves as an example that we can all aspire to.

October 6, 2011 by

Apple After Jobs: Will The Brand Be As Successful?

To the Apple Board of Directors and the Apple Community:

I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come.

So began Steve Jobs’ resignation letter. It is a short, simple document that has made headlines around the world. Will Apple be as successful, countless pundits have wondered, without Jobs at the helm?

There’s precedent to consider, none of it good.  During the ’80s, a Jobs-less Apple floundered.  It was only after Jobs returned to the company that the iEmpire began to grow in earnest. Today, Apple is the most valuable brand in the world. Has the infrastructure been put in place to allow Apple to maintain market dominance without Jobs’ day to day involvement?

It’s a question that will take time to answer.  While Jobs is stepping down as CEO, he has hand picked his successor, Tim Cook. He will remain as Chairman of the Board. One gets the sense that while Jobs is going, he’s not going any further than he absolutely has to.

At the same time, there have already been Apple fans declaring that the brand has already suffered.

It just feels more empty now; a little bit colder, a little bit less awesome. One blog commenter said, while another is already mourning the loss of Jobs’ genius. I’m concerned that a great man may no longer be around. It’s like losing a Newton or an Edison.

Many people view Jobs as the heart of the brand. He is the personification of “cool” for some and it is precisely because Apple knows who finds Jobs cool, inspiring, and right up there with Newton and Edison that we think the Apple brand is well positioned to remain as profitable as ever.

Customers First: Know Your Customers To Build Your Brand

Apple has done an extraordinary—perhaps even the world’s best—job of understanding who their customers are. This understanding goes into the conscious and unconscious motivators that influence purchasing behavior.  Apple’s stock in trade may be computers and entertainment devices, but as we discuss here, what they’re really selling is empowerment and self-fulfillment.

The most important thing that Apple needs to do during this transition period is maintain their commitment and focus on high-level customer understanding.  Brand Modeling tells us that it is essential for a company to remain constantly in touch with and aware of their very best customers.  This connectivity will allow Apple to stay in the empowerment and self-fulfillment business—where they have no viable competition and amazing profitability.

Steve Jobs’ role has been to consistently bring Apple back to that core, central value. The company has shown a tendency to wander away from this mission over the years, but Apple also excels at learning from its mistakes.  They’ve found their way to the best spot in the market. If they can remain focused on serving their best customers better than anyone else in the market does, Apple will stay there. It’s as simple as that.

September 7, 2011 by