Secrets of Apple's customer success- Hardware manufacturers liberally take cues from Apple products, so why not its approach to customers?
Hardware manufacturers liberally take cues from Apple products, so why not its approach to customers?
For the seventh straight year, Apple has topped its competitors in the PC industry in the University of Michigan's American Customer Satisfaction Index (ACSI), achieving a score of 86 out of 100. Its Apple's highest ranking since the annual survey began in 1995.
But the real story is how much further ahead of its peers Apple is in this area: most of the rest of the field (Acer, Dell, HP, and others) is tied with a score of 77, while HP's Compaq brand is ranked 74. All of the PC makers improved their scores this year, but it didn't help them collectively avoid sinking further behind Apple. The Mac maker's nine-point lead is now the largest lead any company has over its competition in any of the 45 categories that the ACSI study surveys--including home appliances, gas stations, autos, e-commerce, airlines, and more.
The Apple Store on Fifth Avenue in New York City is one of the company's flagship stores in terms of both customer traffic and architecture and design.
Apple's lead, while not insurmountable, can be attributed to a few things, including a lineup of products that is broad yet connected, a meticulously controlled retail experience, and a very particular brand of leadership at the top. It's not just notoriously good customer service, said David VanAmburg, managing editor of the ACSI, though that helps.
"I think it's a commitment to innovating and integrating products. Apple is still somewhat uniquely positioned with Macs, the iPad, iPhone, and the iPod," he said. "There's a plethora of IT products that have been integrated together easily, and Apple has been able to capture 'IT' writ large, rather than just personal computers."
That is to say Apple, in comparison to its competitors making PCs, has an ecosystem of hardware connected by its own software, iOS, iTunes, and Mac OS X. Apple has total control over its products and has been able to branch out to other types of devices beyond desktops and laptops. PC makers are somewhat beholden to the product cycles of Microsoft and are seen as just that, PC makers--not consumer device makers.
So why aren't they copying Apple? HP actually is beginning to take steps in this direction. By buying Palm, it's looking to integrate mobile devices like phones and tablets into its larger ecosystem of laptops and printers. But other large PC makers like Dell and Acer are not there yet.
"It's taken a long time for other manufacturers to see the benefits that Apple is getting from this," VanAmburg said. "We may be seeing it a bit with HP going out and grabbing Palm, getting into the handheld business and integrating (WebOS) within its systems."
"There is some movement in the industry now beyond Apple to grow past this thinking of the PC per se, but I think the industry has been slower to do it," he added. "But there's a reluctance to go down that route."
Face time with people and products
Apple Stores are the best example of what makes it different from its peers and are illustrative of the company's approach.
The retail stores are one of the most important ways people interact with Apple. Not just for those who are already customers but potential customers--sometimes more than 50 million customers tromp through Apple's doors every three months, and half of them who make purchases are first-timers, according to Apple.
There are 300 Apple stores worldwide right now, mostly in the U.S., but growing in major world capitals, like London, Paris, and Shanghai. Everything about the store is intended to represent what it is like to own and use an Apple product: Apple controls the whole experience, from the limited range of products on the shelves, to the training of the young, intentionally geeky/hip employees, to the manner in which some stores are designed with architectural flourishes normally reserved for museums, to the tech support received at the Genius Bar, to the educational classes offered in stores for using Apple products.
PC companies have dabbled in retail with varying results. Microsoft's current experiment in retail--which borrows from Apple's retail look and feel--is still small: four stores right now, with a few more planned. Dell's foray was brief, and Gateway did well for a number of years until calling it quits before eventually being sold to Acer.
Retail stores are expensive to maintain, but it can define a company's brand and dictate how customers interact with a company. Apple takes that task on itself, in addition to selling its products online and through some third-party retailers. PC makers either rely on the direct approach on the Web or trust a salesperson to properly present their product at Best Buy, Fry's, MicroCenter and others, or just leave it up to the consumer wandering the aisles at Wal-Mart or Costco.
Putting the customer first
A lot of that "reluctance" to embrace Apple's well-regarded approach to customers that VanAmburg spoke of may come down to the roots of these companies. Some are much more technically oriented than customer oriented, which has a sizable effect on how they prioritize, said Ira Kalb, clinical marketing professor at the USC Marshall School of Business.
Apple was able to save face with customers by giving away free cases to iPhone 4 owners after complaints arose regarding its antenna.
"The reason that a lot of these companies don't copy Apple's customer service is they don't realize how important it is, that's the big one," Kalb said. "They look at it as a cost rather than a return on investment item."
Though it sounds obvious that the customer being taken care of should be a primary concern for any company dealing in consumer goods, it's not always followed, he said. "A lot of these computer companies in particular were started and run by technical people, who are notorious for caring about technology over customers."
Things like customer service, marketing, and making technology easier to understand for nontechnical people can make or break a customer's perception of a company. Apple's customer service, which is perennially ranked highly, is illustrative of the differences.
The other major difference between Apple and the rest of the field is that no other company is as subject to a singular vision. At Apple, the only person whose opinion really matters in the end is Steve Jobs, and that goes for product decisions as well as how the company is run. That doesn't work for everyone. At most large companies, there are competing agendas and fiefdoms that compete for resources and weigh in with differing visions on products. Jobs' leadership style cuts that out.
It's not that Apple does everything right of course. The most recent example is "antennagate," which developed out of customers' distaste for the way Apple handled problems related to the antenna design of the iPhone 4.
Apple's initially condescending response to the issue was eventually addressed by the offer of a free case for iPhone 4 customers, though not without obvious annoyance on Apple's part. Still, the lesson was a useful one for a company that already handles its customer interactions mostly well, said Kalb. And it could be why the company continues to improve in its customer satisfaction index despite such hiccups.
"I think (Jobs) was shocked by the antennagate reaction," he said. "But I think that woke them up further."
Comment Please!!!!!!!!
For the seventh straight year, Apple has topped its competitors in the PC industry in the University of Michigan's American Customer Satisfaction Index (ACSI), achieving a score of 86 out of 100. Its Apple's highest ranking since the annual survey began in 1995.
But the real story is how much further ahead of its peers Apple is in this area: most of the rest of the field (Acer, Dell, HP, and others) is tied with a score of 77, while HP's Compaq brand is ranked 74. All of the PC makers improved their scores this year, but it didn't help them collectively avoid sinking further behind Apple. The Mac maker's nine-point lead is now the largest lead any company has over its competition in any of the 45 categories that the ACSI study surveys--including home appliances, gas stations, autos, e-commerce, airlines, and more.
The Apple Store on Fifth Avenue in New York City is one of the company's flagship stores in terms of both customer traffic and architecture and design.
Apple's lead, while not insurmountable, can be attributed to a few things, including a lineup of products that is broad yet connected, a meticulously controlled retail experience, and a very particular brand of leadership at the top. It's not just notoriously good customer service, said David VanAmburg, managing editor of the ACSI, though that helps.
"I think it's a commitment to innovating and integrating products. Apple is still somewhat uniquely positioned with Macs, the iPad, iPhone, and the iPod," he said. "There's a plethora of IT products that have been integrated together easily, and Apple has been able to capture 'IT' writ large, rather than just personal computers."
That is to say Apple, in comparison to its competitors making PCs, has an ecosystem of hardware connected by its own software, iOS, iTunes, and Mac OS X. Apple has total control over its products and has been able to branch out to other types of devices beyond desktops and laptops. PC makers are somewhat beholden to the product cycles of Microsoft and are seen as just that, PC makers--not consumer device makers.
So why aren't they copying Apple? HP actually is beginning to take steps in this direction. By buying Palm, it's looking to integrate mobile devices like phones and tablets into its larger ecosystem of laptops and printers. But other large PC makers like Dell and Acer are not there yet.
"It's taken a long time for other manufacturers to see the benefits that Apple is getting from this," VanAmburg said. "We may be seeing it a bit with HP going out and grabbing Palm, getting into the handheld business and integrating (WebOS) within its systems."
"There is some movement in the industry now beyond Apple to grow past this thinking of the PC per se, but I think the industry has been slower to do it," he added. "But there's a reluctance to go down that route."
Face time with people and products
Apple Stores are the best example of what makes it different from its peers and are illustrative of the company's approach.
The retail stores are one of the most important ways people interact with Apple. Not just for those who are already customers but potential customers--sometimes more than 50 million customers tromp through Apple's doors every three months, and half of them who make purchases are first-timers, according to Apple.
There are 300 Apple stores worldwide right now, mostly in the U.S., but growing in major world capitals, like London, Paris, and Shanghai. Everything about the store is intended to represent what it is like to own and use an Apple product: Apple controls the whole experience, from the limited range of products on the shelves, to the training of the young, intentionally geeky/hip employees, to the manner in which some stores are designed with architectural flourishes normally reserved for museums, to the tech support received at the Genius Bar, to the educational classes offered in stores for using Apple products.
PC companies have dabbled in retail with varying results. Microsoft's current experiment in retail--which borrows from Apple's retail look and feel--is still small: four stores right now, with a few more planned. Dell's foray was brief, and Gateway did well for a number of years until calling it quits before eventually being sold to Acer.
Retail stores are expensive to maintain, but it can define a company's brand and dictate how customers interact with a company. Apple takes that task on itself, in addition to selling its products online and through some third-party retailers. PC makers either rely on the direct approach on the Web or trust a salesperson to properly present their product at Best Buy, Fry's, MicroCenter and others, or just leave it up to the consumer wandering the aisles at Wal-Mart or Costco.
Putting the customer first
A lot of that "reluctance" to embrace Apple's well-regarded approach to customers that VanAmburg spoke of may come down to the roots of these companies. Some are much more technically oriented than customer oriented, which has a sizable effect on how they prioritize, said Ira Kalb, clinical marketing professor at the USC Marshall School of Business.
Apple was able to save face with customers by giving away free cases to iPhone 4 owners after complaints arose regarding its antenna.
"The reason that a lot of these companies don't copy Apple's customer service is they don't realize how important it is, that's the big one," Kalb said. "They look at it as a cost rather than a return on investment item."
Though it sounds obvious that the customer being taken care of should be a primary concern for any company dealing in consumer goods, it's not always followed, he said. "A lot of these computer companies in particular were started and run by technical people, who are notorious for caring about technology over customers."
Things like customer service, marketing, and making technology easier to understand for nontechnical people can make or break a customer's perception of a company. Apple's customer service, which is perennially ranked highly, is illustrative of the differences.
The other major difference between Apple and the rest of the field is that no other company is as subject to a singular vision. At Apple, the only person whose opinion really matters in the end is Steve Jobs, and that goes for product decisions as well as how the company is run. That doesn't work for everyone. At most large companies, there are competing agendas and fiefdoms that compete for resources and weigh in with differing visions on products. Jobs' leadership style cuts that out.
It's not that Apple does everything right of course. The most recent example is "antennagate," which developed out of customers' distaste for the way Apple handled problems related to the antenna design of the iPhone 4.
Apple's initially condescending response to the issue was eventually addressed by the offer of a free case for iPhone 4 customers, though not without obvious annoyance on Apple's part. Still, the lesson was a useful one for a company that already handles its customer interactions mostly well, said Kalb. And it could be why the company continues to improve in its customer satisfaction index despite such hiccups.
"I think (Jobs) was shocked by the antennagate reaction," he said. "But I think that woke them up further."
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