Articles
The iPod as business model
What does the iPod have to do with business?
Just about everything.
by John Graham“The Internet changes everything it touches. It touches almost everything,”
stated writer John Ellis several years ago. Such an audacious statement
is an even more accurate description of the Apple iPod. Within the blink
of an eye, it has become the most successful new product in history.
Touching almost everything, it has literally taken the world by storm.
In a split second, it went from zero to 100 mph, so to speak. Even those who
don’t own an iPod brand MP3 player make sure they have white earpieces,
the pervasive iPod trademark. A recent poll of college campuses benchmarked the
iPod’s success when students ranked it number one in popularity, beating
out beer drinking for the first time.
But what does the iPod have to do with business? The answer is simple: just about
everything.
A good place to begin is by acknowledging that what makes an iPod unique are
not its component parts, many of which are reportedly off-the-shelf. What has
made the iPod successful is a series of incredibly brilliant insights:
• It’s the iPod’s design that sets it apart.
The design is a combination of an irresistible sleek look, a compelling
size and, most importantly, how it works.
At the very moment the world of gadgets has become incredibly complicated, the
iPod offers the serenity of simplicity. TV “clickers” are incomprehensible.
Who can program a microwave oven, let alone a DVR? Most of us use perhaps 5%
of our cell phones’ capabilities and even more of haven’t figured
out how to change the ring tone.
Not the iPod. It’s brilliance rests in its intuitive simplicity. Product
designer Bruce Claxton says, “People are seeking products that are not
just simple to use, but also a joy to use.” That’s the iPod.
The iPod is the anti-gadget. Gadgets have buttons and switches that only serve
to frustrate users, while the iPod’s total simplicity allows it to become
an extension of the self. This is what makes it so compelling and essential.
As Apple says, “You can do it all without looking.”
• The iPod puts users in control of their worlds. The
revolt against the gnawing feeling of being controlled by economic and
social forces came with the onset of free agency in professional sports
in the mid-1990s. Today, most Americans like to think of themselves as
free agents––as those who are in control of their own destinies.
There’s a well-known photo of a college co-ed holding her iPod. The look
on her face suggests she has found nirvana. This is what the iPod is all about:
freedom. While the automobile gave young Americans mobility, the iPod gives them
control of their worlds. And what the young have discovered is spreading fast.
As we all know, it started with music. Every youth has his or her particular
tastes in music. While tapes and then CDs were a precursor, it wasn’t until
the iPod that we were given the power of total choice. We can listen to our music, when and where we
choose. “You’re free” is the message of the iPod. We can be
in our own private world wherever we happen to be at the moment.
There’s an interesting sidebar to all this. We are willing to pay for music
and programming if it enhances our sense of freedom.
To understand the attraction of the iPod, it helps to know why it is an unmitigated
marketing success.
1. A total customer focus. While every business
talks about meeting customer needs and expectations, most of it is hype.
Can anyone be serious whose voicemail message says, “Your call is
very important to me….” If they really believed the call was
important, they might consider taking the call. Or what about all the blabber
about “customer care”
when the so-called helpers at the “help desk” merely read from
a computer screen?
Unlike Microsoft and other technology companies, Apple is pure-and-simple a marketing
organization. HP sells very good printers. Dell sells computers made to order.
Yet, as someone pointed out, there is no “Cult of Dell”; there are,
however, the numerous “Dell Hell” blogs cataloging thousands of customer
service complaints.
Here’s the point: HP thinks about printers; Microsoft thinks about software;
and Dell thinks about building computers. Apple thinks about customers; that’s
the message behind the company’s “Think Different”
campaign.
According to reports, Apple co-founder and CEO Steve Jobs is totally focused
on the customers’ experience with Apple’s products. As one of the
company’s early employees pointed out, “Steve’s strength was
that he was always concerned with the end-user––how things look onscreen,
what the case was like….” (iCon by J. Young and W. Simon, p. 47).
It was this obsession that produced the Mac … and the iPod.
2. An “I can’t live without it”
approach. Try to take an iPod away from anyone who owns one,
or more likely, several, and see what happens. Perhaps this is the point
at which the genius of the iPod becomes apparent.
This may be why Matthew David wrote, “I’ve got just one thing to
say. I love my iPod. Yes, I am that person, that soul, caught up in the marketing
hype that Apple must love. I love you, Pod.”
Perhaps this is why iPods are everywhere. Business executives listen to audio
books, podcasts––and, of course, music. Plug the iPod into your car’s
MP3 port. Watch videos. Now, the tiny device may become the core of home entertainment.
The iPod is education-friendly, too. College professors are posting their lectures
for downloading. At Georgia College and State University, they’ve created
an iColony with iCitizens that’s built on an iPod foundation.
It has become essential because it works for people.
3. A work in progress. It may be no accident that the iPod is more
like a Toyota Camry than anything else. While General Motors continued to turn
out a string of nearly identical sedans, Toyota focused on one, the Camry. Seemingly
dull in appearance, sales grew because of customer confidence in its quality
and reliability.
Apple has taken this same highly focused approach with the iPod. About twice
each year, the next iterations make their appearance. Now, the iPod product line
offers an array of options to fit every lifestyle including incredibly brilliant
video models.
What’s coming next is always the question. Will there be a phone? Internet
connectivity? Email? All of these and more? Why not?
Who would have thought that the iPod would become the heart of the home sound
system? Yet, it is exactly that.
The excitement of the iPod is not only what it is today, but also what it can
and will be tomorrow. This is what created the “Cult of Mac”
and it’s what’s driving the iPod nation.
Against this background, what does the iPod say about business? Although the
list is long, here are a few possibilities:
1. Customers define the business. Some businesspeople talk about customers wanting
to talk with “a live person,” while others say that customers expect “personal
service.” Is this really what customers want? Or are they looking to have
their needs met in ways that satisfy them?
With the iPod, Apple introduced a product that allows customers to define how
the product is used. In his August, column on the iPod in the Washington Post,
Jose Antonio Vargas cites comments by Jason Berkowitz, project manager for a
software company. At one point Berkowitz says of his iPod, “It becomes
an extension of you…. It’s like a window to your soul.”
The key is letting the customer define the business.
2. Make it enjoyable. Kids are taught from the time
they can walk not to touch the merchandise, to keep their hands to themselves
when they’re in a store. At times, it seems as if store salespeople are
there to enforce the “do not touch” rule.
Once again Apple stood the process on its head: They invited customers to
play with the merchandise and have a good time. There is a place for small
children to use computers. The “Genius Bar” offers free advice and
information. On top of all that, there’s a learning center. Compare all
that with a CompUSA store. Apple is concerned with the customer’s experience,
the other on moving product. The Apple store is entertainment––and
that sells.
3. Tear yourself away from the competition. Too
many companies take their business plans from the competition’s playbook.
It is safe to say that there would have been no Macintosh computer or iPod
if Apple focused its future on the competition.
Even the most devoted member of the “Cult of Apple” admits that the
company faltered badly for about a decade with its computer products, even though
its operating system was unassailable. It was not until Steve Jobs returned as
CEO and gave new life to the “Think Different”
mission that change occurred. And that’s when the iPod was born and
the Macintosh computers began using Intel chips.
When he introduced the iPod in 2001, Steve Jobs said, “Listening to music
will never be the same.” It may have more appropriate for him to say, “Life
will never be the same.”
The headline on the column by Jose Antonio Vargas was accurate: “The iPod:
a Love Story Between Man and Machine.” That’s the test for any business.
John R. Graham is president of Graham Communications, a marketing services and sales consulting firm. He is the author of The New Magnet Marketing and Break the Rules Selling, writes for a variety of business publications, and speaks on business, marketing and sales issues. Contact him at 40 Oval Road, Quincy, MA 02170; 617-328-0069; jgraham@grahamcomm.com.