For marketers and companies that sell to consumers, there are some takeaways from this weekend to learn from, to genuflect upon or to go into a corner and weep uncontrollably.
Of course, it’s not easy to create a product that will cause people to stand in line for days on end – those do not come along very often but if you can create such a hoopla, then you should see how Apple did it and how Sony & the XBox fell down upon LAUNCH DAY execution.
Make it a Quasi-Exclusive Launch.
By only allowing certain outlets to sell it, they concentrated their distribution logistics, PR and consumer’s interest. Instead of the non-glamour random-just-another-day-feeling of having 5-10 iPhones possibly at every kiosk or cigarette store that sells AT&T cell phone packages, they controlled distribution, PR and ultimately consumer’s by directing attention & focus to specific retail outlets. Clearly, this is not always possible as in the case of Sony or Xbox to choose & pick between the two major discount chains, GameStop, TRU and Best Buy but perhaps they could’ve cherry picked some flagship locations. There is a not so-fine line between creating exclusivity and annoying the customer.
Make Enough to Launch
No marketer is blind to the free PR and marketing hype that goes hand in hand with exclusivity and a perceived shortage (people sleeping on sidewalks) but ultimately, is your goal to sell 10,000 and piss off/annoy 50 million people or is your goal to sell to 50 million people? What exactly was the point of Sony making and selling 200,000 PS3’s last holiday season … in a country with 110 million households? (about 80 million PS 1 or PS2 households – aka – YOUR CUSTOMER BASE) Why bother rushing it out when people are actively looking for the hottest gift but you don’t actually intend to sell them one? You can sell 200,000 systems to gamers anytime of the year – all you’ve really done is waste PR & marketing AND annoy/piss off 80 million customer minus the 200,000 who actually got one … and frankly, really just going to eBay – all you’ve essentially done is to tell your customers is that we rigged a system so only eBay profiteers can get most of them.
Apple, on the other hand is smarter than that. They were able to reasonably gauge demand and have enough ready. Of course, you can never be 100% certain but they created enough doubt to get people to line up but not so dumb as to the video game launches where if you were 50th in line, you weren’t going to get one. You have to reasonably satisfy everyone who was willing to sleep on the streets in order to get one – if you can’t do that – DON’T LAUNCH.
It’s that simple. In this day and age, you have to recognize your audience and your revenue goals. There’s nothing wrong in making and selling limited items like Nike or Adidas with certain sneakers because their goal is not to make that particular shoe a multi-million seller but just to add cachet to their name – just as Coach or Fendi does. Their goal is to sell 5,000 or 10,000 and move on but if your goal is sell a million, ten million or build long term brand value – then annoying 98% of your potential audience by NOT selling them what they want is STUPID.
Of course, there is distribution and manufacturing logistics but doing business without knowing how to open your front doors or to failing stock your shelves is not really our concern. You have few chances to sell something and when we hold cash or credit card in hand, you better get ready because we will move on.
XBox and Sony PS3 people seem gleeful it’s a sellout (the Pres of Sony Jack Tretton actually boosted that he would give people $1,200 if a PS3 sat on the shelf at a store for more than a few minutes) meaning he’s happy that customers CANNOT find one on the shelf – in other words, we’d rather you yearn for it than ACTUALLY be able to BUY ONE!
You need more proof Apple actually wants you to get your hands on what they are trying to sell you? (again, what a radical for a company?)
Only Apple would think far ahead enough to start up a web page that actually lists at the end of each night whether the iPhone is still in stock when they re-open. No mystery. No guess work. You are their customer – why should you work that hard to buy something that they want to sell to you? (covered in earlier posts).
Where is the profit in yearning?
So, while Apple is “accused” of being the master at hype, they are also the master of actually DELIVERING.
An empty shelf is hype and worse, NOT PROFITABLE.
There’s a time of hype and there’s a time to deliver.
(Psst, that time is when the customer lines up with money in hand).
When It’s Time to Change the Rules
What is generally buying a phone like? You spend most of your time giving out personal info and signing a 14-page document that you don’t really get to read.
Apple thought this through. On June 29th, we are going to have 100-1,000 people in line. When we finally open the doors, they are going to gleefully hand over $500-$1,200 dollars – then are we going to deflate them by becoming bureaucrats? No, we are going to send them home so we can sell to another 50, 100 people in 5 minutes – do we want them clotting up the stores after we have done our business with them?
Let’s break the rules and the procedure as they have always done it and send them home to do it – what is the internet for? (and no one say – porn 🙂 )
Of course, it’s nice when you control the pipeline but maybe it’s time you controlled the pipeline in your business also?
Speaking of the Internet, We’re Not Afraid to Take Orders …
Unlike the video games guys the last two holiday season who seems to have burned down the factory to get those few hundred thousand units out the door in November and then barely anything for MONTHS, Apple got everything covered down to the details.
Time shipments to arrive exactly on the 29th to nearly 2,000 stores without an errors? (and to prevent early appearance of iPhone slipping out?) CHECK.
Closed website and re-launch at 6 PM with just a few hiccups (see earlier post) but no crash? Apple planning far ahead to take orders online – while the deliver window is wide (2-4 weeks) (Apple generally ships faster than their window), it satisfies those who were unable or unwilling to brave a line.
Apple did not “punish” CUSTOMERS who were unable or unwilling to get in line. If you want to buy it, they did NOT make you jump through hoops. Sure, in line owant online.
Like a grown up professional company.
One Last Thing …
The selling at 6 PM is really brilliant for three aspects. 1) People can leave work a little early to get in line (much easier than not showing up for work in the morning); 2) It’s easier on your staff, they don’t have to show up at 6 AM, it’s a mostly normal day and by closing for a break, they get a couple hours of peaceful setup and most important; 3) YOU GET A FULL DAY of NEWS COVERAGE!
Apple certainly has advantages that many companies do not – it starts with a CEO/Spokesperson who can walk the walk and talk the talk. Most CEO’s got there because they know how to navigate the corridors of power and could probably barely name all the divisions let alone the difference between the processor in the laptops versus the desktop. Credibility.
And of course, Apple understands the wisdom of keeping quiet. The facts are that this is not possible with most companies. Most corporate decisions are by consensus and with consensus, you have different factions who are always interested in running things up the flagpole either to kill another faction or to see if they are right but the more important thing is to really understand “hype.”
As Dizzy Dean once said, “It ain’t bragging if you can back it up.”
And that’s really the key. Of course, cynical journalists get a lot of sell about new products and they see a lot of demos of products that turn out to be carefully staged … or some product sounds impressive with its lists of features but are so poorly implemented or so hard to use, it’s really pointless. Naturally, they do get cynical … just look at Palm who promised an evolutionary device and it turns out to be a crippled laptop that you can beam your Palm screen towards … is it April’s Fool’s already?
So, of course, people are a little world weary and cynical but it’s worth noting that Apple doesn’t fake stage anything. If they/Steve Jobs demos a product, that’s the way it really works. Just as people were unconvinced the TV ads of the iPhone touchscreen “reactions” were sped up and ‘faked’ but as people have noted, that is not the case and what you see on TV and in the keynote is what you get. Of course, Steve Jobs/Apple will throw in the occasional hyperbole about it being the best or the greatest but that is clearly different than promising ‘if you touch here, it will do this.’
Studying how Apple leverages silence as ‘hype’ is really an entire book because if you look at the iPhone – who is really responsible for the hype?
Steve Jobs announces the iPhone and says it’ll be out in 6 months because the FCC needed to approve it. There was the camp who hyped that it might not get approved. Since Apple was working with AT&T, there was no reason to suspect it wouldn’t get approved, while I’m no expert, I’m imagine the only requirements are that it doesn’t catch fire, it doesn’t interfere with other devices and that it works as a phone on its assigned frequencies – with 20 years of cell phone technology out there, this is not exactly a stretch.
There was also a camp of people who said it was all just marketing build-up hype – I guess they don’t think the FCC is real?
A month later, Apple runs the HELLO ADS.
Then mostly silence on Apple’s part – followed by people who hyped that the iPhone would be forgotten when released in June. Going out on a limb – but I believe they were wrong 🙂
In April & May, there were rumors that were probably floated by Apple & AT&T to ferret out leakers … iPhone with rebate, iPhone plan $150 dollars a month and of course, the battery life is 40 minutes! Everyone panic!
In May, the Digital D conference, a few interviews with AT&T President and then in June, the new iPhone ads and a few more press releases (along with an updated website).
Combined, this is probably less money spent than Pringle’s does in announcing a new Kansas City barbecue flavor … and yet, Apple is accused of running a ‘hype’ machine (of course, many of the accusers are places like ZDNET who managed to run about 60 negative blog posts in a couple weeks).
So, which is it? Is Apple feeding the hype by not saying anything? But if they were to release a lot of details, isn’t that feeding the hype?
Apple isn’t asking anyone to fill in the blanks, of course we’re happy to take up the slack …
And when Apple does release info (like the ads or the tutorial or the battery press release), then people are more than willing to add in their opinion …
What is the takeaway? This is difficult because there aren’t a lot of company’s or products that garner massive debate no matter what and for the most part, Apple seems to ignore it all – good or bad … and other than the battery press release, which seemed to be an actual response … otherwise, whatever rumors, innuendo’s or made up “facts,” are floating out there, Apple seems to prefer not to respond to any of it and will announce info when they are good and ready.
But then it circles back to the fact that there are people willing to fly to Italy to stand in line when a new store opens … so maybe their work is already done?
THE NEAR IMPOSSIBLE THING
Oh yeah, it helps to make products that are tops in class in hardware, software & esthetics. Good luck with this part.