Why Every Company Should “Borg” Apple … If They Can
If you are not a Star Trek fan, the title of this post might perplex you. The Borg were a fictional alien race which “assimilated” other species into their “hive mind” of shared information. Their purpose was to do this in order to achieve perfection.
As someone who has followed Apple for 30 more than years, there are some great marketing lessons that can be learned if you remove your emotions (love ’em or hate ’em) like the Borg and really try to understand what they are doing.
To me, there are five key things to understand:
- Surf the Technology Wave. Don’t Ride the Cost Curve
- Utilize a “Good, Better Best” Product Strategy
- Truly Understand your Product Use Cases
- Simple is Hard … Obsess over the Detail
- Do not Devalue your Brand
Surf the Technology Wave. Don’t Ride the Cost Curve
“A long long time ago in a galaxy far, far away” … Actually, when I was at Gartner, I wrote about this concept, which still applies today.
Some companies choose to ride the technology cost curve while others decide to “surf” it. In some cases there is no choice but to do the former because marketing and product development are not doing their job, but when you have the opportunity, I would strongly recommend the latter. Margins are better and you can enter a “virtuous circle” where you continually insert “things” of value at the top of your product line and “cascade” earlier things of value down into the other layers of your product line price points.
Riding the Cost Curve
Unfortunately, too many companies go down this path in an attempt to keep or gain market share, but it is a race to the bottom. Is there nothing you can do to add some value that your target customers will pay for? In my experience there always is … The hard part is finding it. That’s why you get paid “the big bucks”!
Surfing the Technology Wave
This is the good part. Examples are everywhere, and the latest is what Apple did with their latest iPhone product launches in 2013. At the top of their product lineup they introduced higher performance and new features WITH BENEFITS. Note to all involved … features are meaningless unless you can translate them into benefits that consumers/businesses are WILLING TO PAY FOR. They took their last flagship product and moved it to the middle of their line (but with a colorful twist!) with the last middle product moving to the bottom.
Apple has been a master of this for well over 20 years because they employ a “Good, Better, Best” product strategy in their hardware products
Utilize a Good, Better Best Product Strategy
The problem with a “killer” product is that often there is nothing with which to compare it. Is it too expensive, too cheap or just right? The economic theory of price elasticity would say that, the lower the price the higher the volume. But when you offer buyers three differently price choices with identifiably different features and benefits, most often they gravitate to the middle of the line. This has several benefits if you employ this strategy:
Often the high end product has technology that is either expensive and/or not available in high volume and/or requires significant support in the case of software. You don’t expect this part of your product portfolio to be your highest volume.
Your low end product is for the most value conscious portion of your target market, or for first time buyers who are not sure what the next level offers them of value.
The middle of your product line up is where you hope the high volume sets, it’s the product you developed for the bulk of your target market.
If you set up this strategy, you can surf the technology wave discussed above, cascading the various technologies into the middle and low portions of your products over time. By doing this you can avoid the “price compression” that seems to infect our industry.
Truly Understand your Product Use Cases
“You’ve gotta start with the customer experience and work backwards to the technology. You can’t start with the technology and try to figure out where you’re going to try to sell it. And I’ve made this mistake probably more than anyone else in this room and I’ve got the scar tissue to prove it. And I know that it’s the case”, Steve Jobs, Apple WWDC 1997.
Link to video: http://www.youtube.com/watch?v=FF-tKLISfPE
“If you’re not prepared to be wrong, you will never come up with anything original”, Ken Robinson, TED Talk, How Schools Kill Creativity, 2006 (18 million Views).
Link to video: http://www.ted.com/talks/ken_robinson_says_schools_kill_creativity.html
If you do your marketing job well, you will dig deeply into the user experience needed to provide benefits of value (people will pay for) that enable your products to succeed. We (that includes me) are NOT the market.
Then comes the harder part …. making the complex simple and obsessing over “the details”.
Simple is Hard … Obsess over the Details
Too often during a development process or when products evolve over time, they become difficult for your customers to use, understand, deploy or modify. You have to repeatedly challenge yourself and the development team to make things as “user-intuitive” as possible. Don’t cop out and say, “but we are B2B not B2C”, or “our solution is complex because it solves complex problems”. I would urge you to channel your innermost Steve Jobs and obsess over the details.
I’ll give a specific example of a $25,000 per unit B2B broadcast/cable network infrastructure product that was the first to deliver broadcast-quality video over IP networks. We all know that each element in a network has a specific IP address like 192.256.68.104. Our target market was broadcast engineers, so our technical team felt that having them input the IP address of the destination to which the video feed would be sent on a front-panel keypad was not an issue.
I had the opportunity to visit with a number of broadcasters of the course of several months and my observations led me to believe that this would not be acceptable for several reasons: inputting 15 digits manually is not simple, the video feeds would be changed regularly, there was no “accidental” entry prevention (i.e. bumping up against the panel accidentally) and broadcast engineers are not IP network engineers. They don’t “think IP”, they think “Tampa1 or NYC3” video feed.
It turns out we did have an SNMP input, so I asked, “Can’t we set up a Lookup Table with all the IP addresses to all the video destinations and sources, quickly develop a fast web-based menu way for them to select the destination, or destinations if it was a multicast feed, all by name?”. The answer was a grudging, “Yes”. We implemented the changes and our customer was thrilled that we did so.
The hard parts here were taking the time to understand the use case, getting our technical team to think more like our target customer and then making the solution simple enough in software we could develop and control, until they could then migrate it into their own broadcast NMS (network management system).
Do Not Devalue Your Brand
If you follow steps 1 – 4, you are off to a great start. But then you will most likely still encounter the “we need to be everywhere we can” and some of those places are very value conscious. Unless your positioning is to be a “value-priced” brand, you can make major mistakes here.
Your product family may not be suitable for all possible distribution channels. That is OK. Don’t go there. Do be sure you take a careful look where your target customers might like (or expect) to buy your products and make every reasonable attempt to be there but under your own terms.
Do not develop a “low-price” sub-brand or channel without a lot of thought. The ladies in my house really like Michael Kors products, but they will no longer buy them at places like Nordstroms, and Neiman Marcus when they can get them at Marshall’s for almost half the price.
You could do worse than employing these five principles, becoming part of “The Collective” like the Borg on Star Trek and entering into Apple’s “Hive Mind” … Live long and Prosper!
