The day Apple’s Arrogance cost themselves a very loyal customer

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applelogoI love Apple. I own a MacBook Air, an iMac, iPad mini and an iPhone 4S. My kids both have iPhones and MacBook Pros. But yesterday, I bought a Samsung Galaxy Note 3. Whaaaat?   Yes, that’s right. A Samsung.  

I still feel weird about it.  But I’ll recover. I know this article will bring out the Apple lovers.  Don’t worry, I’m one of you.  But with my new phone, I feel like a cult member who snuck out of the compound one night and drooled when I saw the Samsung phone.  I could see it was light years ahead of my phone. I feel the same way I felt back in 2010 when I escaped my Blackberry cult and bought my iPhone.  

Two hard realities for most people in the Apple army to realize.

  1. Apple is a big mass corporate brand. It’s no longer an artistic challenger brand. That will be some tough medicine for the most loyal of Apple users who first bought into the brand in the 1980s.  
  2. Apple’s post Steve Jobs innovation has been incremental and not leap frog.The reality is that R&D pipelines are long lead cycle times, so this is really still Jobs’ pipeline. But it’s relatively dry compared to the previous decade of riches.  

Apple has changed:  They’ve moved from the challenger brand to the “king of the castle” brand. Apple used to be the alternative, anti-corporate, artistic, “we try harder” type brand. IBM was the BMW, blue suit and polished shoes brand, while Apple was VW Bug, tee shirt and sandals brand. But as much as Apple fought off the arrogant brands like IBM, Microsoft and Sony, they’ve now become that brand.And with that shift, we now see an attitude change–we are seeing a certain Apple arrogance that almost says “come on, where else are you going to go?” That’s human nature to feel that way as most who now work at Apple are now cult members who joined Apple because they loved the brand. But that arrogance has a danger to it of thinking you can do no wrong and feel no real competition. Confidence is healthy, arrogance is not. 

Apple has slowed down:  Sales are still strong but thats as the laggard type mass market now enjoys the lead generation products of a few years ago. Next time you’re in an Apple store, look at the table where they are teaching classes and you’ll see a few Senior Citizens. Sales and margins are seeing record highs the past year, but since the middle of 2012, the stock price has floated up and down around $600. If you held stock for the past 24 months, you’re at a break even position. The high sales are how of how Apple is doing now, but the stock price is an indication the market is still confused by Apple’s future. If the big play for Apple is China, there’s a good likelihood North America won’t see any leap frog advances for a few years.

I write about Brands all the time.  Samsung has a better product than they do a brand. The reality is the Samsung phone is a better product. It is faster, bigger, and has so many more features than the iPhone. 

Yesterday, I went into my Apple store to upgrade my Iphone 4S to a 5S. And I asked the strange question:  “so, I’m a current iPhone user and Apple lover, and wondering what price discount that gets me”. I guess I was using my opening line from when I last bought a car. It seems like buying a car, so why not. Plus my Scottish blood makes me always eager to save a few bucks. The guy in the blue shirt looked at me strangely and said “the price of the new iPhone 5S would be $299 with a two year plan.” So I said, “so there’s no real benefit for me, being an owner of so many Apple products to staying with the Apple brand?” And he got a bit huffy and said “other than owning a beautiful phone…no”. The guy got up and walked away on me, almost mad that I would even ask.  I felt snubbed.  I wasn’t really expecting a big discount or anything. But nothing. Here I am in club. And I would get the same deal as a customer walking in off the street. I’m loyal to Apple, but is Apple loyal back to me?  Nope. 

And I smiled like that cult member who could now see a bit of freedom.

So, I went and bought a Samsung Galaxy Note 3.

The most Beloved Brands have to attack themselves before being attacked by competitors. There’s a reason why Starbucks closed every store for one day to retrain their baristas. They attacked themselves before competitors could.  And there’s a reason why Sony has lost market leadership in every category they play in. Arrogance. I’m afraid Apple’s arrogance has them blindly marching forward, feeling invincible knowing the passion of their cult will follow.  I’m only one customer. No big deal. But once you’re done fulfilling all the orders of the laggards, then what?  The biggest point of being a beloved brand is to love the consumer.  

I guess like many relationships, I hit my breaking point. And the guy in the blue shirt basically said “it’s not you, it’s me”. Now, let me figure out how to send an email on my new phone.  

 

As Oscar Wilde said: “Never love anyone who treats you like you are ordinary”

To go deeper on the Apple, here’s an article  I wrote 18 months ago, outlining how Apple is not delivering on their brand promise:   Apple: What Goes Up, Might Come Down  Not much has changed since.  

 

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In the consumer’s mind, brands sit on a Brand Love Curve, with brands going from Indifferent to Like It to Love It and finally becoming a Beloved Brand for Life. At the Beloved stage, demand becomes desire, needs become cravings, thinking is replaced with feelings. Consumers become outspoken fans. It’s this connection that helps drive power for your brand: power versus competitors, versus customers, versus suppliers and even versus the same consumers you’re connected with. The farther along the curve, the more power for the brand. It’s important that you understand where your brand sits on the Love Curve and begin figuring out how to move it along towards becoming a Beloved Brand. With the power of connection, the brand can leverage that power into increased growth and profits. To read more, follow this presentation.

 

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Graham Robertson

Graham Robertson is one of the voices of today's brand leaders. As the founder of Beloved Brands, he has been a brand advisor to the NFL Players Association, Shell, Reebok, Acura, Jack Links and Pfizer. He's helped train some of the best marketing teams on strategy, brand positioning, brand plans and advertising. Graham's purpose is to use is marketing experience and provocative style to get marketers to think differently about their brands, and to explore new ways to grow. Graham spent 20 years leading some of the world's most beloved brands at Johnson and Johnson, Coke, General Mills and Pfizer, rising up to VP Marketing. Graham played a significant role in helping win Marketing Magazine's "Marketer of the Year" award. He has won numerous advertising and innovation awards including Businessweek’s best new product award. As a keynote speaker, Graham shares his passion for brands to challenge and inspire marketing minds around the world, whether speaking at Advertising Week, or at the NBA Summer League, or to a room full of marketers in Bangkok Thailand or an agency in New York. He's been a guest writer for Ad Age, and his weekly blog stories have reached millions of marketers, who are trying to improve their skills. His new book, Beloved Brands, has launched with rave reviews. Many brand leaders are using this book as a playbook to help build the brand they work on. And, it serves as a brand management textbook for business schools in the US, Canada and the UK. Graham’s personal promise is to help you solve your brand building challenges, to give you new thinking, so you can unlock future growth for your brand.

13 thoughts on “The day Apple’s Arrogance cost themselves a very loyal customer”

  1. Graham your commentary reminds me of research I saw a number of years ago on the Scotch market when I worked for what is now Diageo. J&B was a huge brand in Spain where it was viewed as a stylish, cult brand of scotch drunk by all the right people. It had a huge share of market approaching 50% but there were all sorts of red flags being raised because it had reached a fashion tipping point, just as I think Apple has. All sorts of non leading edge people were now drinking J&B and the concern was that the opinion leaders would move onto something new and the question was what to do about it. Did they launch a “new” fashion leader or try to reinforce the stylishness of J&B.

    Eventually they decided to double down on the leading edge nature of the brand and launch a series of very avante garde ads reasoning that if they could stay fashionable and leading edge they would retain their current users and the rest would come along for the ride so to speak. It worked up to a point but over time they lost share to competitors that were able to position themselves as more leading edge which was then compounded by a cutback in spending in the market because the new owners, Diageo, didn’t understand the situation. Too many what we called “old whisky farts” who thought you simply showed a bottle and a glass to get people to drink your brand.

    The problem Apple has is that it is both technology and fashion driven and if a competitor leapfrogs them in terms of technology and is seen as being at least equal in terms of edginess then the competitor wins, particularly if they continue to be arrogant. After all wasn’t that the problem with Blackberry?

  2. I tend to agree. Working in the creative arena, Apple products were a natural for me. But, recently they downgraded their iWorks suite—yes, not upgraded, downgraded—and dumbed it down for the common man (whoever that is.) They removed tons of features and made it a product that no longer fits my needs. If forum comments are to be believed, most professional users railed at the downgrade. Apple has forsaken the very people who made them who they are to appeal to the masses. If they are just another mass brand, then why wouldn’t I check out all of the superior mass brands before I make my next buying decision? I’m no longer part of the Apple-buying clique—since that is everybody now—I’m just part of the everybody. I’m not sure what my next phone will be, but I will definitely look at Samsung before I make a decision.

  3. I’m also an Apple’s fan but I have to agree with you. They start to take customers for granted and when a company doesn’t bother anymore about “sustaining” customer’s loyalty, this is not a good sign… As a matter of fact I have started to spend my money on other brands for tablets, smartphones, etc.

  4. Completely agree with this article.
    I’m not sure what’s more arrogant. The need to have an appointment before going to an Apple store or that they refer to themselves as “Geniuses.”

  5. I have also fallen out of love with Apple after many years of being firmly in their corner. For me the reasons are slightly different.

    I bought into Apple primarily because it was a remarkably stable platform that was devoid of the typical nonsense and hassles associated with an IBM/Microsoft platform.

    Now however they seem to prioritize industrial design over platform stability. I’ve mostly switched now to Windows 8.1 which honestly is much more stable, hassle free and (after a brief adjustment period) more intuitive. Ironic isn’t it? Microsoft has claimed the functional space previously occupied by Apple.

    Regarding the mobile devices – you better bring your A game if you’re going up against Samsung. Their product design and execution is simply second to none. Period. Having competed against them in the past, I have to give them credit for how stunningly capable they are in terms of product execution.

    Apple once was this. But Steve is gone. I do believe that he was in fact the mastermind who (sadly) did not leave behind a true “no compromise” legacy.

  6. I was doing a session at Microsoft a few weeks ago and they asked what I thought of other companies in the space. I told them what you have outlined here. In the late 90’s, Microsoft had that arrogance. They don’t now. While Microsoft might not be seen as a challenger brand, they certainly are a more humble one. Apple can learn a thing or two from them. Being on top and staying on top are two very different things.

  7. I agree with eveything Graham writes only I have a very opposite experience. As a professional graphic artist, you would think I am firmly an Apple guy. I guess I just didn’t know any better so for 20 years I’ve been running on a PC. My company won’t allow Macs since we are firmly entrenched with the PC platforms. The only Apple products I have ever owned were iPods which I absolutely loved. My first three smart phones were all Android models and recently I switched to an iPhone 5s. I can’t believe the difference. The interface is so intuitive that I have been able to make the transition without a hickup. It runs much better than my Droids did and I have yet to have any issues in about 6 months. I love the camera on it and as a professional photographer I find myself using the phone more than my stable of DSRs and video cameras. That being said, I now am comptemplating my first iMac. I have had my fill of viral attacks, malware and system crashes as well as countless blue screens.

    But my experience with PC manufacturers and Microsoft has been a nightmare. I have had Dell computers for the past 12 years and I would rather stab myself than call their tech support. I have been constantly switched from India to the Philipines and only an official filing with the state consumer fraud department got me through to a tech support person in Texas. I guess my point is that as soon as any of these tech companies gets a large market share, their arrogance and lack of customer loyality goes off the scale. Apple has had this attitude for years and I really don’t think they’ve gotten any worse. But they still make great products and their industrial design would make Raymond Lowey jealous. True, Samsung build wonderful devices and appliances, I have a house full of them. But I found the interface, form factor and reliability of the iPhone met my needs perfectly.
    I suppose that many large companies should probably take a look in the mirror and reasess their customer service. But please let me know if Dell, HP, Samsung or Epson give the consumer a loyalty discount. To me, I have to view these on a device level since I feel that all of these companies pretty much leave customer service/loyalty as a second thought.

  8. Hi Graham,

    totally agreed with you. apple has lagged behind if you were to ask me. they ran out of ideas and if they are not careful, they will end up like Nokia, Ericsson during their heydays, or even Microsoft MSN.
    a few scenarios to share; why is Apple as a brand leader in the mobile phones now “copied” Samsung with the launch of iPhone 6 in a big screen? why didn’t they think about it? they did not foresee the usage of big screen phone? or they did not understand different countries usage of mobile phones? or were they too complacent?
    another scenario which pissed me off big time was my iPhone 4S. my phone was hung and i went to the apple store to have it fixed. everything went well and good, until i realised i can’t log in because i haven’t forgotten my password. i called the hotline no 400xxxxxx for the english speaking as i am based in Shanghai. explained to the first technical staff and he told me he will call me back in a minute as i explained to him that the Apple store i am in is too noisy and reception was bad. i waited for more than an afternoon but nope, he did not call. then i called again, this time round the guy was good. i was speaking to a guy in Australia. he was helpful and get the local staff in China to call me. Thats where the stupidity of policy comes in.
    they asked me 3 questions which i can’t answered. not my fault but for whatever reason. when i keyed in my birth date which can’t be wrong, they told me its to right.
    i explained to them and said i am willing to go to the local police station to prove that the phone is mine and whatever documents etc… they need i am more than happy to provide. i told them i just want my reactivated because if not, this phone is going to the waste paper basket.
    they simply refused by saying company policy. i told them heck the policy, we are living beings and not robots, can’t you measure all this by circumstances and stop being so rigid. NO, they can’t.
    with that, i promised myself not to buy another Apple phone.
    i am like you, a staunch fan of Apple. When they first launched the iPhone 3, i asked my friend from the States to buy for me. the day Apple launched a Mac, i was using it till now. I owned Powerbook G4, MacAir, Macbook, iPad 2, 2 iPhones 4S.
    What do i get? taken for granted!
    in time to come, i believe they will lose more fans/customers if they don’t take a sit back and re-look, re-analyse, re- understand the consumer needs….

  9. I totally agree with Grahm. I think that Steve Jobs idolized Disney and took on the Corporate mentality of Disney after selling Pixar. To this day, Disney does not have an 800 number to make a reservation. They do not discount tickets to anyone, no matter how many times you’ve been there. Only since Universal came around has Disney had to try to out market someone. Quite frankly, The Universal Studios experience is better than Disney’s, just like Samsung is better than Apple.

  10. While I agree with what seems to be your article’s intent, opening up your discussion with a price discount at the Apple store confuses the main issue which is the importance to stay in touch with consumer needs. While arrogance could be dangerous, if you are in touch with the consumer’s true needs, then arrogance is forgiven – as Steve Jobs was.

    As a brand champion that is challenged often on price in my discussions with Sales teams every day, I need to clarify that price is one indication of your brand’s worth and a premium is needed to continue investment in it. Discounts, while important, are sales and marketing tactics to reach more short term goals. In addition, Samsung is not immune to arrogance either – check out 4/22 Wall Street Journal article “Samsung’s Apps Are Ubiquitous but Unloved” about some of their non-consumer centric bloat ware.

  11. I am always surprised by how little “faithful customers” are rewarded. Companies offer massive incentives to gain new customers, but then seem to annoy the ones they have. Examples: magazine subscriptions and many online stores (surely Amazon knows how much money I’ve given them). As for me, I started with Apple in 1986 (Mac Plus) and I think I’ll stay for a while.

  12. I don’t disagree with many of your points. However, I do take issue with one, which serves as one of your jumping-off points:

    “Apple’s post Steve Jobs innovation has been incremental and not leap frog.”

    As it happens in politics, one side hammers its position long enough that people start to believe it. There are passionate pro- and anti-Apple fans. But the death of Steve Jobs provided some good ammunition for the “Apple is doomed” crowd. I’m the first to admit that Apple can’t be the same without Steve — but I do try to separate opinion and fact. So many people have written about Apple’s slowing pace of innovation now that otherwise intelligent people start playing it back as fact.

    But it isn’t. In truth, Apple continues to innovate exactly as it did when Steve was running the show. There is no “three year cycle” of revolutions at Apple, as many suggest. The iPad came three years after iPhone — but the iPhone came SIX years after iPod.

    Between revolutions, Steve Jobs’ Apple updated its products incrementally, just as Tim Cook’s Apple has been doing. With Retina displays, Siri, smaller iPads, thinner iPhones, 64-bit processors, TouchID and such things things, the improvements are not insignificant.

    Those who really know Apple understand that it has only one policy when it comes to introducing new devices: they ship when they’re ready. For Apple, being “ready” means having a product that people can truly love. If it does anything less, it destroys the brand that Steve built.

    I don’t doubt Apple could have released an iWatch by now. But until they solve the battery and screen issues, and have the right system software and apps, it would land with as big a thud as the Galaxy Gear. Then you’d really hear about about Apple’s inability to innovate.

    I am an Apple fan, but I also try to be objective. For example, I don’t get why it’s taken Apple so long to come out with a bigger phone. Clearly there is a big chunk of customers who want one. However, this can’t be blamed on the post-Steve Apple either, as Steve was famous for making some rather large mistakes. PCs had CD drives literally three years before he put one in the Mac.

    The bottom line is that Apple has no timetable for innovation. This makes it easier for critics to argue that Apple is failing. But it also ensures that future Apple products are worthy of the logo.

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