MARKETING ACTUARY

October 12, 2010

THREE MARKETING LESSONS FROM THE iPAD

On Sunday, I went out of my way to visit an Apple store for the first time. The place was buzzing with activity and energy. I've never bought an Apple product but wanted to see an iPad for myself. That's the power of marketing — attracting a disinterested client.

The iPad teaches three valuable marketing lessons

Show, don't tell
Lock the price
Sell the old model

Show, Don't Tell

People can't easily tell what they want before they see it. Can you? That's why focus groups and market research have limited value for new inventions like overnight delivery, bank machines and smartphones. Watching is a much better measure of intent than listening.

The Original Tablet

Tablet computers have been around since 1992 when IBM launched the ThinkPad 700T. There have been many models from various companies ever since. Microsoft Windows has supported tablet PCs since 2002. Yet sales were limited.

Enter Apple

Within 80 days, Apple sold three million tablets — more than all models from all other companies combined. There was a market after all.

What happened? Apple showed people what the iPad can do. Through their stores, their own experts answer questions and let visitors try for themselves.

Within a few minutes, an Apple rep showed me the capabilities and had me sold. The only question was which model. And you thought actuaries couldn't be impulsive. My family was with me and discouraged the purchase. So I walked out empty-handed.

What do you show and let potential clients touch? This is tougher if you sell a service, which means that what clients touch has even greater impact.

Lock The Price

Prior to launch, there were questions whether Apple would manage to get the price of the iPad below $1,000 US. They managed to charge $499 for the base model with prices ranging to $829.

Model	16 GB	32 GB	64 GB
WiFi	$499	$599	$699
WiFi + 3G	$629	$729	$829

With that much choice, price isn't much of an issue. Also, prices seem to be the same at the few places like Best Buy that are authorized to sell the iPad.

To some buyers, price is probably incidental. They have to have it. There's similar fervour when a new Blackberry or iPhone gets launched.

Are you selling on price or do you offer a range? The range may consist of offerings from different companies (e.g., at Best Buy) or a range with offerings from one company (e.g., at Apple stores).

Sell The Old Model

You don't need to sell the best … if you're perceived as first to market and have a reasonable price. Perfection can come later.

These deficiencies haven't deterred early adopters

no multitasking (coming with iOS 4.2 in November)
no USB connection
no HDMI output (but a VGA connector is available)
no 4G option
no widescreen (4:3 ratio 1024x768 resolution)
no camera

Despite the shortcomings and ridiculed name, Apple sold three million iPads in 80 days. At the $499 entry price, that's $1.5 billion in revenue. First year sales are higher than for the original iPhone or DVD players.

If you won't buy until minimum standards have been met, Apple has given you reasons to wait for the iPad 2 (and perhaps to keep you away from competitors). For current buyers, Apple is creating anticipation to encourage upgrades to the iPad 2 and additional purchases for other family members.

Are you creating anticipation for future sales? Are you selling what you have now or pausing until the new models come out?

What's Next?

Competitors are on the way. Apple can probably maintain momentum and market share by reducing prices prior to introducing the iPad 2.

Links

PS I may be back in an Apple store before long … without my family

PPS You can now rate posts. Please do.

October 5, 2010

THE EASIEST WAY TO CATCH UP WITH SOCIAL MEDIA AS THE WEB FADES IN IMPORTANCE

Even if you're not using social media like Twitter, LinkedIn, blogs and Facebook you're still affected. That's because your current and potential clients are engaging in public conversations.

Are you listening? Are you participating? If not, you're putting yourself at a competitive disadvantage because social media helps with all six elements of credibility.

Business people who resisted computers fell behind. Those who resisted the Internet fell behind. Those who resisted smartphones fell behind. Those who are still resisting social media are falling behind today. It's not going away. As the graphic at the top shows, there are numerous forms already.

When you fall behind, the barriers to entry rise and catching up becomes very difficult. It's much easier to change lanes than to join traffic from a standstill.

Web In Decline

Sources: Cisco estimates based on CAIDA publications, Andrew Odlyzko (read the full fascinating article in Wired 18.09. There's a link at the bottom of this post.)

Websites are so 1990s in terms of Internet traffic. Their importance has been dropping steadily since about 2000. If you don't have a website, don't rejoice. You still need one but that's not enough anymore.

These days, much activity occurs in the members-only enclaves of social media. Anyone can join but newcomers must prove themselves to get treated like an insider.

Like Losing Weight

If you agree that social media is now essential for building your business, how do you catch up? You'll find many basics online and in seminars. If you're a self-starter and like tinkering, you can experiment. That's what I did. However, this takes longer. You're bound to make mistakes that could stay online forever. That's risky.

Have you ever wanted to become healthier through exercise and diet? How do you get started? What's a realistic goal? How do you stick to your plan?

With a personal social media coach.

Disclaimer: I don't sell any marketing services or take referral fees from anyone who does. My tips are 100% free. Fair?

Yes a coach costs money but so does inertia. The right coach tailors a strategy and guides you along the path, month after month. Which media are best for you and your clients? What's the right content? What's the right frequency? How do you develop the content? Are you on schedule? How do you make time?

No one else can lose weight for you. No one else can do social media for you either. You must be involved. Yes, you can get help and there are ways to delegate to outsiders. You can't quit enroute or even after you reach your goal.

The Right Coach

Average people are in the majority but they're not in demand.
— Seth Godin

You'll find many "experts" in social media. How do you tell who can help you? Look for

chemistry: you like them (easy to find)
credentials: they have proven experience and satisfied clients (fairly easy to find)
generosity: they follow their own advice (rare)

Generosity is the biggest challenge. You'll find many inconsistencies. Here are simple warning signs.

Is their LinkedIn profile complete, including meaningful testimonials and a photo? Are they sloppy? Do they participate in groups? Do they post ongoing status updates which help their network? Do they send you self-promotional emails? When did they become social media gurus? What were they doing before?

Twitter

Do their tweets help followers or are they self promotional? Are they reasonably consistent in tweeting? Did they join Twitter only recently? Do they have more followers than people they follow (look for the ratio)?

Blog

Do they have one? Are they articulate? Are they consistent in posting? Is the content truly helpful or constructed to sell you something?

Web Search

What happens when you type their name into your preferred search engine? Do they show up on page one and create a positive impression? Does their website look modern or dated?

Results

Using social media is much like networking in person. You can't easily quantify the benefits. So if you want solid proof of success, you'll be disappointed. How do you quantify the ROI on your mobile phone?