Apple’s Customer Relationships

17 12 2013

On October 5, 2013, we saw hundreds of publications praising Steve Jobs. It was the 2nd anniversary of his death. Why did so many people and publishing media pay deference to this man? Well, he was a visionary, a philosopher, and a great entertainer and the company still is based on his principles.

What are the secrets of building strong customer relationships?

Basics …

Apple has long been recognized as a leader and innovator in customer service. They have created a system, beyond a customer support call and help center, with their Genius Bars, where customers can bring in their products and have Apple’s experts work on their computers, iPhones, etc. How easy is that! Some might even say its genius!

More than leading an organization that delivers great customer service, Jobs was an innovator. He recognized not only what customers want, but also what customers need before they even know they needed it. He literally created industries with this forward thinking kind of innovation. He was first to market with products that were unproven, but quickly turned into staples in the form of needs, not just wants.

Apple is one of the strongest brands in the world, which is due in large part to their army of evangelists. Proof is in the way Mac customers will evangelize their computer and other Apple products.

Most likely you’ll witness an amazing level of brand loyalty.

How did Apple do that?

While entire books written about Apple have answered this question, one of the simple answers is that they understand the customer. They know what customers want, and need. In some cases (iPhone and iPad) Apple already knew what customers want before customers even know they want it.

Apple created industries with this forward thinking type of innovation. Apple was first to market with products that were unproven, but quickly turned into staples in the form of needs, not just wants.

What can you provide your customers that they don’t yet know they want, or more important, need?

If there are products of high quality following the simple principle what customers need you’ll have more than a loyal customer. You’ll have a partner, an evangelist who will give you repeat business and sing your praises to their friends and associates.

See what Tim Cook said in an interview with Bloomberg Busineeweek in Sep 2013:

1 “I think it’s important that we grow, but I don’t measure our success in unit market share. So if there are a lot of $69 tablets sold that you’re just pounding on to get something to work and get some responsiveness, and it’s thick and fat and just a terrible experience.”

2 “We’re not in the JUNK BUSINESS …
What we want to do is make a really great product and provide a great experience. And I’m sure we’ll get enough customers that want to buy that. We want to please them.”

3 “To make the very best products in the world that really deeply enrich people’s lives. That’s what we’re about. And now it’s not to make the most. It’s not to have the highest market cap, but that’s the result of doing the first one well.”

4 “I think that Android is more fragmented than ever and, as a result, when you look at things like customer satisfaction and usage, you see the gap between Android and iOS being huge.
There is a huge difference between market share of units and usage share.
And that’s really important to us because we have never been about selling the most. We’re about selling the best and having the best experience and having the happiest customers.
Happy generally means using more.”

5 “Well, some people define or have sort of redefined innovation. And to them innovation only equals a new category. And I don’t view it that way. I don’t view it that way at all. I mean, if you look at these products, there are many innovative things in these products, from the fingerprint sensor to the flash to the processing power. IOS is filled with innovation. Seven’s innovation overflows the cup.”

… and these principles of Steve Jobs:

1 “Sometimes when you innovate, you make mistakes. It is best to admit them quickly, and get on with improving your other innovations.”

2 “Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle.”

3 “We’re gambling on our vision, and we would rather do that than make ‘me too’ products. Let some other companies do that. For us, it’s always the next dream.”

4 “But then I thought about it and realized that everybody helped me when I was young, from Bill Hewlett to the guy down the block who worked for HP. So I called him back and said sure.”

5 “The Valley has been very supportive of me. I should do my best to repay.”

Engagement …

Steve Jobs was in direct contact with customers to build up customer relationships and stepped into a role model for his employees. This built up part of Apple’s DNA regarding customer relations and today is continued with the Genius Bar (hands-on technical support from experts for Apple products, using your own device) within Apple Stores.

Among CEOs, Steve Jobs was an outlier. CEOs of public companies are generally hands-on, but Jobs was involved in nearly every detail, from determining which industries Apple should invade to the material used for the iPhone’s screen.

Jobs even got directly involved in customer service, which was a part of Apple’s business for which he exercised a great deal of attention and patience. He fielded e-mails about broken laptops and intervened on support calls.

Unlike other leaders, Jobs was handling an unusual number of his company’s own basic customer service inquiries.

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Long before that, however, Jobs was extraordinarily embedded in handling customer complaints. On October 11, 1999, not long after Jobs returned to a dying company and took on the title of interim CEO (or iCEO), he fielded an inquiry from a customer named David about iBook laptop shortages.
“We are doing the best we can with a limited supply (which is finally now increasing). Please remember that some of the first pre-orders came from CompUSA,” Jobs wrote.

For example, a customer complaining about Apple not honoring its warranty for his computer received the following response from Jobs in 2008:

“This is what happens when your MacBook Pro sustains water damage. They are pro machines and they don’t like water. It sounds like you’re just looking for someone to get mad at other than yourself.”

Jobs didn’t often pick up the phone to go back and forth with customers, but at least one Apple customer, Scott Steckley, recalls a time when an e-mail to Jobs, explaining how there seemed to be no end in sight to his wait for a computer repair, was met with a phone call.
“Hi Scott, this is Steve,” Steckley recalled hearing from the other end of the phone.
“Steve Jobs?” he asked.
“Yeah,” Jobs said. “I just wanted to apologize for your incredibly long wait. It’s really nobody’s fault. It’s just one of those things.”
“Yeah, I understand.”
Then Jobs explained that he expedited the repair. “I also wanted to thank you for your support of Apple,” Jobs said. “I see how much equipment you own. It really makes my day to see someone who enjoys our products so much and who supports us in the good times and bad.”
CNN about Jobs customer service

NPS …

Economists always try to measure business related facts.

Net Promoter Score
is a customer loyalty metric developed by (and a registered trademark of) Fred Reichheld, Bain Company, and Satmetrix. NPS can be as low as −100 (everybody is a detractor) or as high as +100 (everybody is a promoter). An NPS that is positive (i.e., higher than zero) is felt to be good, and an NPS of +50 is excellent.
Net Promoter Score (NPS) measures the loyalty that exists between a Provider and a consumer. The provider is the entity that is asking the questions on the NPS survey. The Consumer is the customer, employee, or respondent to an NPS survey.
Wikipedia

Alan Deutschman said in the New York Times about Steve Jobs:

“He doesn’t market-test anything. It’s all his own judgment and perfectionism and gut…. Again and again, Mr. Jobs has gambled that he knew what the customer would want, and again and again he has been right.”

Gambling? Instinct? Gut? Not really.

The reality is that Apple listens very closely and systematically to its customers. Apple is one of the premier exponents of the Net Promoter Score for systematically listening to customers and managing its business in response to what they hear.

Apple has been a pioneer in adapting the NPS framework to employees. Apple realized that only employees who were promoters themselves of Apple were likely to be able to turn customers into promoters. So they began surveying their own employees every four months to determine how likely the employees would be to recommend the store as a place to work.

When Apple began measuring NPS in 2007, its 163 stores already had an excellent NPS of 58%. In 2011, its 320 stores worldwide have an outstanding NPS of 72%. The best stores achieve a remarkable 90% NPS.

Is the primary source of customer enthusiasm Apple’s amazing products or cool design?
No. The most common reason for becoming promoters is the way store employees treat them.

It helps everyone to do the right thing, enrich the lives of the customers they touch. Making money is the result, not the goal. The result is of course that Apple makes an awful lot of money. Where a typical electronics store averages $1,200 per square foot in sales, mature Apple stores exceed $6,000 per square foot, the highest productivity in retailing of any kind.
What sometimes confuses people in thinking about Apple is that they see Apple making a lot of money, and they begin to imagine that making money must be Apple’s goal. On the contrary. If making money were ever to become Apple’s goal, the whole approach would collapse back into the failing practices of traditional management. Thus Apple practices radical management, where making money is the result, not the goal of the organization.

The bottom line of Apple’s business is to delight the customer.

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Feel free to download this map from my Box account.

The alternative file formats have been created with iThoughts HD for iPad (.ITMZ file format). Compatibility to other tools is limited.

Application File format
Adobe Reader PDF
iThoughts ITMZ
MindManager MMAP
XMind XMIND

Influence …

Appreciation of a whole company goes along with the grade of innovative power and the intensity of customer relationships.

The impact has been not only economic but also cultural. Apple’s innovations have set off an entire rethinking of how humans interact with machines. It’s not simply that we use our fingers now instead of a mouse. Smartphones, in particular, have become extensions of our brains. They have fundamentally changed the way people receive and process information. Ponder the individual impacts of the book, the newspaper, the telephone, the radio, the tape recorder, the camera, the video camera, the compass, the television, the VCR and the DVD, the personal computer, the cellphone, the video game and the iPod. The smartphone is all those things, and it fits in your pocket. Its technology is changing the way we learn in school, the way doctors treat patients, the way we travel and explore. Entertainment and media are accessed and experienced in entirely new ways.
The New York Times, Oct 4, 2013
And Then Steve Said, ‘Let There Be an iPhone’

Participation …

When navigating Apple’s homepage you will find a link at the bottom on the right side which is named ‘Contact us’. On the site ‘Contacting Apple’ you will find a submenu ‘Feedback’.

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It’s not likely that anybody will get an answer when participating in Apple’s feedback offer. It’s more likely that Apple will react if the collected serious suggestions are likely the public opinion.

Related links …

Apple Feedback

Tim Cook interview, Sep 2013

Lessons learned from 4 Steve Jobs quotes

Summary …

Building up customer relations over years are one of the cornerstones of successful business and forces customers to recommend products. Companies that continually create customer relationships over the long term learn how to ingrain the ability into their corporate makeup; it becomes part of their culture and DNA. Along with all the other strategic considerations the result today is:

Apple is the most valuable brand in the world (Forbes 2012)
Apple is the Best Brand of the world (BCG 2013)
Apple leads all stats regarding customer satisfaction

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