Apple’s iPhone Blunder

Once again, the ‘Net is abuzz with chatter about a hot new mobile phone product from a well-respected industry giant. But this time the product has already been launched and is in use by millions of Apple fans. Trouble is some of those fans are thinking less well of their good old friend Apple these days. You’d think Apple had begun ransacking small, defenseless villages from the uproar. All they did was lower their prices for crying out loud. In fact their price drop was really no more traumatic than you see in the rest of the mobile phone world. So, what’s the big deal? The big deal is, Apple should know better. They should know better because their loyal legions of fan-like customers expect better. Apple is not like most companies. Apple has fans. Apple has friends. Apple has unpaid armies of promoters who love the company. They love the company because of what the company produces and because of how it behaves. Apple is a cool company that is very good to its customers. It’s a shining example of how a very large international company can create and develop personal, almost intimate relationships with millions of people. As a result, Apple’s customers treat the company well. Their loyalty is legendary. It’s envied by organizations small and large on every continent (with the possible exception of Antarctica). So, when Apple does something like this and it rankles enough of their customers, they hear about it. And it hurts their brand. The big question is, how does this affect Apple and what should they do about it? Let’s apply this situation to the Smart Marketing Formula and see what we find. Remember the formula is:

A= (T * E2 * M)

  • A = Awareness (Defined as the likelihood someone will become or remain a customer.)
  • T = Time
  • M = Marketing Activities
  • E = Customer Experience

(All of these must be above zero.) If Apple’s customers felt they were being cheated or slighted by the price drop, their “E” would be very low. Based on the uproar it sounds like this has happened. Because “E” is squared, it drags down “A” much faster than “M” could lift it back up. Even “T” will not be much help in the short term because of the viral effect of “E”. Note: Because of Apple’s long history of delivering a great “E”, this incident shouldn’t drag down their “A” very much. “T” helps stabilize the situation in this case. It will probably dip as the media-induced frenzy peaks and then rise again once people move on to other things. So, Apple could wait it out and let the dust settle. Or they could try to advertise or “PR” their way out of this mess. But, the formula suggests their best move for quickest results would be to try to increase the “E”. In other words, take quick action to “fix” the bad experience these customers have had. Maybe this means apologizing profusely. Maybe it means offering a bigger discount or a full credit to more people. Whatever they do, it needs to be consistent with the expectations their customers have. It needs to show their customers their loyalty is well-placed. If they do that, this will blow over faster than you can say “$200 discount”.

The article was written by Kevin Stirtz