July 15, 2008
Apple’s ‘Service is Marketing’ Mantra
By Tom Ryan
As if they didn’t already receive heaps of acclaim, Apple Stores in the last few months have been both boosting the number of “concierges” that meet and direct customers in its stores, and positioning them within a few feet of the doorway. Writing in Advertising Age, Pete Blackshaw, VP, Nielsen Online Digital Strategic Services, says he believes this subtle shift is only further enhancing Apple’s “service” stance as a core “marketing” tool.
“Things once considered the dark side of Apple, such as tech support, are on the verge of becoming strategic assets, with the Apple Store’s geek-stocked Genius Bar able to tackle just about any issue or concern you have,” said Mr. Blackshaw. “And the process of planning that interaction is more akin to scheduling a haircut or spa treatment than calling those inaccessible tech-support lines.”
Of course, it only works if it’s done the Apple way. Mr. Blackshaw noted that the greeters “don’t wait until you look utterly confused to ask you what you need. They intercept you — though not intrusively and always with a smile.”
Store employees are also extremely familiar with the product, seem to all like their jobs, and collectively have “a certain level of geeky yet accessible passion” that lures fans to the brand.
“What’s important about this front line is not just the help these employees provide, but the halo of service they create. They are there if you need them, a reality that brings more confidence to the overall shopping experience,” said Mr. Blackshaw.
Apple’s “service is marketing” mantra, according to Mr. Blackshaw, offered three lessons for other retailers looking to build loyalty by solving their customer’s problems:
- Service is marketing: “As marketers struggle to ‘engage’ consumers,
service may well be the easiest and most gratifying starting point — and
one with high sales conversion potential.”
- Problems are opportunities: “Tech support is an emotional experience
— so why not capitalize on that insight by openly and enthusiastically solving
problems, giving reassurance and showing compassion for the pain and frustration.
A satisfied consumer might just buy something else while making the trip.”
- Employee authority and passion aids selling: “When employees ‘walk
the talk’ in using the product they sell, credibility goes up — and credibility
drives persuasion. Passion and evangelism also move the needle.”
Discussion Questions: Why does customer service seem to work so effortlessly at Apple Stores? What difficulties may other retailers face in replicating Apple Stores’ “service is marketing” model?
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As everyone has said Apple is a culture. But what does that mean? In my mind it means that Apple customers are a little rebellious and very image conscious. Also they aren’t necessarily techies, as Apple products don’t demand techiness! The secret to Apple’s success is products that can be operated without an owner’s manual. Their customers can be seen as a little smarter than the average bear and most are in awe when it comes to their Apple experience. They are well behaved in-store because they are in fear that if they are not, they will get kicked out of the “club.” They will be sent to the back of the line and may not get the new iPhone, iPod, Mac, etc.
Everyone who comes into an Apple store knows that they aren’t in Filene’s Basement. You will pay to dollar but you will receive performance and customer service.
For the very reasons listed in the article! Apple support people really engage the customer in a polite and sincere way, and don’t just direct you to what you are looking for, they take you there. They are willing and seem actually “excited” to help and answer your questions, and never seemed pressed for time so they stay with you until you are satisfied and understand the product or application you came in to learn about.
I don’t find them geeky at all, rather I have found them to be “customer-centric” and allowed to have individual personalities but with the common mantra of their job being focused on serving Apple customers.
In today’s world of “self serve” retail environments, Apple stands our even more because they delight customers who have come to anticipate and expect minimal help.
Their model and financials may allow this level of extra attention, but it no doubt is the most critical factor in their amazing success. I go to Apple stores because it is fun and informative and I leave happier and more knowledgeable than when I arrived…even when I don’t make a purchase. Who thought such an experience was ever possible?
It’s the culture, plain and simple. Name one other retailer who has consciously striven to create an exceptional experience and loaded their stores with employees? Not anecdotal or what you’ve been told–like how great Nordstrom is (as a customer of theirs for 20 years, I’ve never gotten their “legendary” service–but I digress.)
Can someone else do it? Absolutely but when the trend is “how can we get even less coverage on the sales floor?” not likely.
I’m all for hiring great employees, training them well and inculcating a positive, can-do corporate culture. But the key enabler of of Apple retail success is its vertical integration.
Since Apple sells its products direct to the consumer and controls their net pricing, it has the flexibility to allocate the total profit margin as it sees fit. Subsidize retail wages? OK. Build architecturally unique flagship stores? Fine.
The profit flow from iTunes has been a major enabler of this, I suspect. When you view iPods and iPhones as the “razors” and high-profit music and video downloads as the “blades,” the physical Apple stores would become hugely valuable assets even if they generate zero net profit on their own.
The more hardware units Apple flows into the market, the larger its iTunes business becomes. This is one reason why the faster second edition iPhone models can sell for half the price of the originals. Keeping customers becomes paramount in that scenario, which well justifies the investment in the Apple store environment and service personnel.
Under that rationale, the Genius Bars could be valuable assets even if they operated at a steep loss. Those iPod and iPhone units are consumption-enabling devices, gobbling up profitable sales byte by byte. Keeping them operable and their owners happily buying is everything.
Every experience I’ve had with an Apple Store has been positive. Their employees are experts on the products and take the time to fully explain the benefits of each, answer your questions and make comparisons with other Apple products. They all use Apple and are evangelists for the company.
This is an exception in the retail world where many employees are stretched so thin that they do not have the time to truly assist consumers.
As we have discussed in previous RetailWire columns, few marketing efforts can beat strong customer service. Apple is a leader in this area.
When consumers’ bucks are few
And many customers are needed,
A multi-line retailer
Won’t achieve what Apple succeeded.
It is very simple. As a matter of fact too simple for most to even think about it. Apple’s service works because (1) senior management and local store management are committed to service and (2) Apple hires “people oriented” individuals for service jobs and then trains them well. While most companies see customer service as an expense, something to be cut, Apple sees it as an investment; a competitive edge!
It is the culture. Apple employees are passionate apostles for their cause. That can’t be mandated.
I find this one of the most interesting posts on RetailWire in a long time. After reading the article, I looked at the poll question and wanted to check all of the boxes. From training, to hiring to paying for results.
All of the comments were also very insightful about culture, the need to differentiate, and that fact that service can be the real key to building one’s retail business.
When it comes to pay, it is interesting to note that the minimum wage will go up again next week. Retailers and everyone else need to recognize that it is not what you pay an employee. It is what you get for what you pay that employee. Just go back one year ago and think about all of the comments on RetailWire about what Circuit City did when it reduced its payroll by getting rid of all of its long term, high earning frontline workers.
This is just a continuation of the whole Apple philosophy that is so often missed by all the hype around the hardware. There is a very clear reason why Apple computers were always the preference of the “artsy crowd.” They are easy to use, the hardware is clever, and don’t require a computer science degree to support.
iPods are not just a clever music player, they are the end point of an audio/video distribution network that enables owners to get the music they want. iPhone started out a little shaky, but apparently the current version is beginning to match the ease of use and cost you would expect from an Apple product. The thing that is interesting is that Apple is opening the iPhone up to independent software developers who may not meet the same standards. But you can see why making the shopping experience easier is merely Apple’s way of extending their culture.
It’s easy to throw a lot of staff into a store when your sales per square foot are as high as Apple’s are. Granted there is probably some point where the marginal returns on another person on the floor reach zero, but it does not appear that Apple has reached that point.
We saw a lot of other retailers waking up to those kind of economics last year in our study on workforce management–you can be in a viscious cycle where cutting labor leads to lost sales which leads to the need to cut labor, or you can turn it into a virtuous cycle, where adding labor boosts sales, which helps fund more labor. Looks like Apple is in the latter type of cycle.
I think the line “Store employees are also extremely familiar with the product, seem to all like their jobs, and collectively have “a certain level of geeky yet accessible passion” that lures fans to the brand” says it all. Employees are the number one customer service asset or liability in any business.
Apple employees are passionate about their product. So are Apple buyers. They speak the same language. Relationship building is very important in sales and people will buy from people who speak their language.
Apple service works so well because of the emphasis on training. The original Apple training was created by the company that does service training for Ritz Carlton. Since then the training programs constantly change adapting the training to new programs, new services, and new products. Training to update employees is also provided so training does not occur only when hired. This is an expensive proposition but the only way to ensure high level service is to invest in training and monitoring.
Unlike a typical retailer, Apple is a “culture” that has a place to sell its brand. This is the true secret to their success. It manifests itself in their employees (trendy geeky but cool), the stores (futuristic, clean, yet organized), and the way that they turn scary technology into fun learning at the Genius Bar. The stars are aligned for them right now and their model would be near impossible to copy today.
There is a real sense of ownership when I walk into an Apple Store. The staff really seem enthusiastic (Look what they are selling!) and know their products inside and out. I firmly believe that Apple has create a culture of exceptional service and it is much more than just training and job descriptions.
Other retailers could probably take a lesson from Apple but motivating staff to sell iPods and MacBooks is a lot easier then motivating staff to sell shampoo or mattresses. Providing exceptional service starts with the leadership. If you have a store manager or director that wants to be on the floor working with customers, you will see residual effects with the rest of the staff. Apple has done that and done that well. Other retailers are also successful but unfortunately, many put customer service on the back burner in the interest of saving a few bucks here and there. We need to remember that customers are the lifeblood of retail and without them, there would be no retail!
Sales per square foot are high because Apple differentiates in every aspect from store design, layout, high end fixtures and fittings, marketing, customer service and product. It is not a me too supplier and its competition, whilst maybe having better technical products, cannot keep up. It’s a pleasure going to the stores and you pay a premium, but you ‘need’ what they sell. Fabulous. If they have sorted the repair centre service out too, then fantastic. Apple is smart at understanding the customer. Mass retail and differentiation–that’s the challenge.
I agree with what everyone has said!…but better service comes with a higher price tag. It’s no accident that Starbucks pays its workers a rate much higher than minimum wage. Higher hourly pay means longer tenure, better product knowledge, and employee loyalty. If other retailers would like to be known for outstanding service, they’ll take steps to recruit skilled workers and keep them.
To echo what Nikki referenced, “margin, margin, margin.” Their products have the price point and margin to support service, the complexity to justify the need for support and the captive branded environment that brand can completely control–not that there still aren’t lessons for other retailers in Apple’s model–a focus on service, an attitude geared toward help, training and empowerment are all important but I don’t think it’s as easy to get a 20 year old store associate pumped up about supporting the toothpaste aisle as it is to get them excited about working and evangelizing for Apple. Brand cache plays a very important role.
It’s true, Apple’s customer focused approach is evident in not only their products, being very user friendly to begin with, but also in their service level and approachability of their reps. We have noticed that service counts and that in the current state of our economy, customer service and bringing the customer a positive service experience has been key for independent retailers who are fighting big box discounter prices.
At the Gift and Home Channel, smaller specialty shop retailers, who could possibly be considered the Macs of the retail world (providing higher quality products, service, and user experience, at possibly a slightly higher price to the consumer, but once the consumer tries them they would never go back to a PC or a Walmart), have shared their insights to creating a true customer experience and focusing on that to win over customers. A current retail conversation on the topic can be found here: http://www.giftandhomechannel.com/
I went with my daughter to an Apple Store to get her a laptop for college last year. Yes, the service was outstanding, but what impressed me more was how well organized the store was. When we got there, there was a line outside the store. I assumed that this was going to take awhile. I was wrong. The reason for the line was that they only allowed as many customers in as they had personnel available to help. The line moved quickly and when it was our turn we were met by a dedicated, personable and knowledgeable CSR who made our visit enjoyable and informative. The whole process moved quickly, yet we didn’t feel hurried at all.
And they gained two loyal customers.
Because Apple deliberately restricts its retail distribution, they can sustain high sales and margins per square foot. And they restrict their product proliferation. Dell and HP market new models every few weeks, with a confusing array of permutations. Best of all, Apple benefits from all the folks enraged by Vista’s shortcomings. Elsewhere at RetailWire, there’s a discussion about word-of-mouth marketing. What was the word of mouth when Vista was launched? Apple’s top sales executive: Vista.
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As everyone has said Apple is a culture. But what does that mean? In my mind it means that Apple customers are a little rebellious and very image conscious. Also they aren’t necessarily techies, as Apple products don’t demand techiness! The secret to Apple’s success is products that can be operated without an owner’s manual. Their customers can be seen as a little smarter than the average bear and most are in awe when it comes to their Apple experience. They are well behaved in-store because they are in fear that if they are not, they will get kicked out of the “club.” They will be sent to the back of the line and may not get the new iPhone, iPod, Mac, etc.
Everyone who comes into an Apple store knows that they aren’t in Filene’s Basement. You will pay to dollar but you will receive performance and customer service.
For the very reasons listed in the article! Apple support people really engage the customer in a polite and sincere way, and don’t just direct you to what you are looking for, they take you there. They are willing and seem actually “excited” to help and answer your questions, and never seemed pressed for time so they stay with you until you are satisfied and understand the product or application you came in to learn about.
I don’t find them geeky at all, rather I have found them to be “customer-centric” and allowed to have individual personalities but with the common mantra of their job being focused on serving Apple customers.
In today’s world of “self serve” retail environments, Apple stands our even more because they delight customers who have come to anticipate and expect minimal help.
Their model and financials may allow this level of extra attention, but it no doubt is the most critical factor in their amazing success. I go to Apple stores because it is fun and informative and I leave happier and more knowledgeable than when I arrived…even when I don’t make a purchase. Who thought such an experience was ever possible?
It’s the culture, plain and simple. Name one other retailer who has consciously striven to create an exceptional experience and loaded their stores with employees? Not anecdotal or what you’ve been told–like how great Nordstrom is (as a customer of theirs for 20 years, I’ve never gotten their “legendary” service–but I digress.)
Can someone else do it? Absolutely but when the trend is “how can we get even less coverage on the sales floor?” not likely.
I’m all for hiring great employees, training them well and inculcating a positive, can-do corporate culture. But the key enabler of of Apple retail success is its vertical integration.
Since Apple sells its products direct to the consumer and controls their net pricing, it has the flexibility to allocate the total profit margin as it sees fit. Subsidize retail wages? OK. Build architecturally unique flagship stores? Fine.
The profit flow from iTunes has been a major enabler of this, I suspect. When you view iPods and iPhones as the “razors” and high-profit music and video downloads as the “blades,” the physical Apple stores would become hugely valuable assets even if they generate zero net profit on their own.
The more hardware units Apple flows into the market, the larger its iTunes business becomes. This is one reason why the faster second edition iPhone models can sell for half the price of the originals. Keeping customers becomes paramount in that scenario, which well justifies the investment in the Apple store environment and service personnel.
Under that rationale, the Genius Bars could be valuable assets even if they operated at a steep loss. Those iPod and iPhone units are consumption-enabling devices, gobbling up profitable sales byte by byte. Keeping them operable and their owners happily buying is everything.
Every experience I’ve had with an Apple Store has been positive. Their employees are experts on the products and take the time to fully explain the benefits of each, answer your questions and make comparisons with other Apple products. They all use Apple and are evangelists for the company.
This is an exception in the retail world where many employees are stretched so thin that they do not have the time to truly assist consumers.
As we have discussed in previous RetailWire columns, few marketing efforts can beat strong customer service. Apple is a leader in this area.
When consumers’ bucks are few
And many customers are needed,
A multi-line retailer
Won’t achieve what Apple succeeded.
It is very simple. As a matter of fact too simple for most to even think about it. Apple’s service works because (1) senior management and local store management are committed to service and (2) Apple hires “people oriented” individuals for service jobs and then trains them well. While most companies see customer service as an expense, something to be cut, Apple sees it as an investment; a competitive edge!
It is the culture. Apple employees are passionate apostles for their cause. That can’t be mandated.
I find this one of the most interesting posts on RetailWire in a long time. After reading the article, I looked at the poll question and wanted to check all of the boxes. From training, to hiring to paying for results.
All of the comments were also very insightful about culture, the need to differentiate, and that fact that service can be the real key to building one’s retail business.
When it comes to pay, it is interesting to note that the minimum wage will go up again next week. Retailers and everyone else need to recognize that it is not what you pay an employee. It is what you get for what you pay that employee. Just go back one year ago and think about all of the comments on RetailWire about what Circuit City did when it reduced its payroll by getting rid of all of its long term, high earning frontline workers.
This is just a continuation of the whole Apple philosophy that is so often missed by all the hype around the hardware. There is a very clear reason why Apple computers were always the preference of the “artsy crowd.” They are easy to use, the hardware is clever, and don’t require a computer science degree to support.
iPods are not just a clever music player, they are the end point of an audio/video distribution network that enables owners to get the music they want. iPhone started out a little shaky, but apparently the current version is beginning to match the ease of use and cost you would expect from an Apple product. The thing that is interesting is that Apple is opening the iPhone up to independent software developers who may not meet the same standards. But you can see why making the shopping experience easier is merely Apple’s way of extending their culture.
It’s easy to throw a lot of staff into a store when your sales per square foot are as high as Apple’s are. Granted there is probably some point where the marginal returns on another person on the floor reach zero, but it does not appear that Apple has reached that point.
We saw a lot of other retailers waking up to those kind of economics last year in our study on workforce management–you can be in a viscious cycle where cutting labor leads to lost sales which leads to the need to cut labor, or you can turn it into a virtuous cycle, where adding labor boosts sales, which helps fund more labor. Looks like Apple is in the latter type of cycle.
I think the line “Store employees are also extremely familiar with the product, seem to all like their jobs, and collectively have “a certain level of geeky yet accessible passion” that lures fans to the brand” says it all. Employees are the number one customer service asset or liability in any business.
Apple employees are passionate about their product. So are Apple buyers. They speak the same language. Relationship building is very important in sales and people will buy from people who speak their language.
Apple service works so well because of the emphasis on training. The original Apple training was created by the company that does service training for Ritz Carlton. Since then the training programs constantly change adapting the training to new programs, new services, and new products. Training to update employees is also provided so training does not occur only when hired. This is an expensive proposition but the only way to ensure high level service is to invest in training and monitoring.
Unlike a typical retailer, Apple is a “culture” that has a place to sell its brand. This is the true secret to their success. It manifests itself in their employees (trendy geeky but cool), the stores (futuristic, clean, yet organized), and the way that they turn scary technology into fun learning at the Genius Bar. The stars are aligned for them right now and their model would be near impossible to copy today.
There is a real sense of ownership when I walk into an Apple Store. The staff really seem enthusiastic (Look what they are selling!) and know their products inside and out. I firmly believe that Apple has create a culture of exceptional service and it is much more than just training and job descriptions.
Other retailers could probably take a lesson from Apple but motivating staff to sell iPods and MacBooks is a lot easier then motivating staff to sell shampoo or mattresses. Providing exceptional service starts with the leadership. If you have a store manager or director that wants to be on the floor working with customers, you will see residual effects with the rest of the staff. Apple has done that and done that well. Other retailers are also successful but unfortunately, many put customer service on the back burner in the interest of saving a few bucks here and there. We need to remember that customers are the lifeblood of retail and without them, there would be no retail!
Sales per square foot are high because Apple differentiates in every aspect from store design, layout, high end fixtures and fittings, marketing, customer service and product. It is not a me too supplier and its competition, whilst maybe having better technical products, cannot keep up. It’s a pleasure going to the stores and you pay a premium, but you ‘need’ what they sell. Fabulous. If they have sorted the repair centre service out too, then fantastic. Apple is smart at understanding the customer. Mass retail and differentiation–that’s the challenge.
I agree with what everyone has said!…but better service comes with a higher price tag. It’s no accident that Starbucks pays its workers a rate much higher than minimum wage. Higher hourly pay means longer tenure, better product knowledge, and employee loyalty. If other retailers would like to be known for outstanding service, they’ll take steps to recruit skilled workers and keep them.
To echo what Nikki referenced, “margin, margin, margin.” Their products have the price point and margin to support service, the complexity to justify the need for support and the captive branded environment that brand can completely control–not that there still aren’t lessons for other retailers in Apple’s model–a focus on service, an attitude geared toward help, training and empowerment are all important but I don’t think it’s as easy to get a 20 year old store associate pumped up about supporting the toothpaste aisle as it is to get them excited about working and evangelizing for Apple. Brand cache plays a very important role.
It’s true, Apple’s customer focused approach is evident in not only their products, being very user friendly to begin with, but also in their service level and approachability of their reps. We have noticed that service counts and that in the current state of our economy, customer service and bringing the customer a positive service experience has been key for independent retailers who are fighting big box discounter prices.
At the Gift and Home Channel, smaller specialty shop retailers, who could possibly be considered the Macs of the retail world (providing higher quality products, service, and user experience, at possibly a slightly higher price to the consumer, but once the consumer tries them they would never go back to a PC or a Walmart), have shared their insights to creating a true customer experience and focusing on that to win over customers. A current retail conversation on the topic can be found here: http://www.giftandhomechannel.com/
I went with my daughter to an Apple Store to get her a laptop for college last year. Yes, the service was outstanding, but what impressed me more was how well organized the store was. When we got there, there was a line outside the store. I assumed that this was going to take awhile. I was wrong. The reason for the line was that they only allowed as many customers in as they had personnel available to help. The line moved quickly and when it was our turn we were met by a dedicated, personable and knowledgeable CSR who made our visit enjoyable and informative. The whole process moved quickly, yet we didn’t feel hurried at all.
And they gained two loyal customers.
Because Apple deliberately restricts its retail distribution, they can sustain high sales and margins per square foot. And they restrict their product proliferation. Dell and HP market new models every few weeks, with a confusing array of permutations. Best of all, Apple benefits from all the folks enraged by Vista’s shortcomings. Elsewhere at RetailWire, there’s a discussion about word-of-mouth marketing. What was the word of mouth when Vista was launched? Apple’s top sales executive: Vista.