Sorry, Suckers
I could almost hear the “uh-oh” at Apple in my New York office.
The company messed up this summer by cutting the price of the iPhone by $200 after thousands of customers stood on line for days, sometimes in the rain, to be the first to buy it for $599.
Those loyalists are known in the marketing field as influencers, early adopters and trendsetters. And they are valuable, for they often persuade friends to try a product.
“One of the most powerful relationships you can have is with customers who act as advocates for your brand,” says Luc Bondar, vice president of loyalty for Carlson Marketing.
But influencers will turn their backs on any company that disses them.
And Apple did just that. In consumer jargon, the owners of a $599 iPhone are now called suckers.
CEO Steve Jobs apologized, sort of, and offered the early buyers a $100 store credit.
But that may not be enough to regain their trust.
A recent study by Carlson Marketing found that a store’s reputation plays a huge role in shopping choices. Of the 2.5 million consumers surveyed, 70% rated this intangible as important. Half said the retailer’s moral values also count.
Sure, some customers still love what’s been called their “Jesus” phones. Money is not the issue for these shoppers — they want to be the first to own something cool.
Others aren’t so forgiving. Yes, they expected prices to drop, but not so rapidly. They bought the phone expecting that they had a long lead-time to be first, and they were willing to pay a premium for that.
Their bragging rights got taken away only 10 weeks after the phone’s debut.
I don’t happen to be an early adopter. I prefer to wait it out, see if the product performs to expectations, watch for the price to drop and then buy.
Apple had a goal of selling 1 million iPhones by the end of September. It sold about 750,000, then it dropped the price in the hopes of getting people like me to pounce so it could reach its goal, which it did Sept. 10.
How serious is this flap? Apple was trashed by some bloggers and has been praised by others for saying it was sorry.
But it may need a crash course in maintaining customer loyalty.
In addition to turning off its own customers, Apple also opened the door for its competitors to step in.
Nokia jumped right on Apple’s problems by running a search ad on the phrase “iPhone price drop” with the headline “Sorry, Early Adopters.” It directed people to its new MOSH mobile-content community site. The site is a social network run by Nokia for phone geeks. They may not be overtly pushing a sales pitch there, just trying to establish a relationship with these disgruntled Apple customers and get them later with a phone buy. Smart move.
Meanwhile, Apple can ponder how it lost the loyalty that it once had with these customers. Was it worth $200?
Send your comments to Patricia Odell at [email protected].
