Organic Conversations

The unfolding story of the iPhone, on the macro level, is indicative of Apple’s systemic problems with communicating and responding to its customers and to software developers. If Apple fails to improve its ability to organically communicate with their consumer and developer audiences, Apple’s pending slump will turn into an inevitable slump.

So there’s that. There’s plenty of blog discussion about the grievances with Apple, so rather than joining the choir, I offer the following suggestions:

1. Listen.

And let us know you are listening through blogs, interactive video sessions, etc. Events in which Apple gives essentially one-way speeches about products and services to press, consumers and software developers is no longer enough. There is a huge basket of unresolved grievances about Apple’s corporate behavior. The longer these grievances remain unresolved, the closer Apple gets to critical mass when it comes to negative sentiment. Letting products do most of the talking is short-sighted and risky. Expand the conversation to protect yourselves over the long-term.

Bonus: For a host of reasons that make complete business sense, allow individuals other than Steve Jobs to be Public Conversationalists for Apple. Think of what Scoble did for Microsoft, and do what you do best - outshine that.

2. Strongly declare the “Think Different” era over…or reinforce that historic brand character in your conversations.

Either choice is fine, but choose. The source of all upset is unfulfilled expectation. We’ve been expecting John Lennon because you told us you were. We’re upset because you’re giving us Donald Trump without telling us. Longtime Apple loyalists, which are among the loudest, are confused and have begun to stop believing in you because of this. Quit giving us mixed signals and boldly declare who you are.

3. Start calculating “Opportunity Loss”.

Being a crappy conversationalist affects the bottom line. The problem is that I know of no entity that figures “Opportunity Loss” as a result of decisions made into their balance sheet. It’s been a long-held belief of mine that these types of figures are almost as important as hard sales figures, as they clearly identify the loss of productivity associated with the loss of easy growth opportunities like return customers, happy productive workers, and so on. A good example of this is in Joseph Jaffe’s latest post about Toys ‘R Us’ ‘paper receipt required’ return policy, in which he projects the amount of people the policy upsets and what this costs Toys ‘R Us.

If Apple calculated the “Opportunity Loss” of not selling the iPhone through multiple carriers, of not having an open API (or at least a pre-launch SDK) for developers, of sending out hardware/software/firmware updates before they were fully tested, and so on, I am clear they’d be in for a bit of a shock and change their behavior quickly.

For example:

A. The iPhone conversation alone is starting to have the kinds of people who buy and recommend Apple desktops and laptops think twice before buying or recommending.

B Furthermore, because of the iPhone conversation, software developers are definitely thinking twice before developing for the Mac.

C. Lack of OSX-compatible software is a major reason why consumers and purchasing departments choose PC’s over Macs.

D. Desktops and laptops are the most highly priced and highly profitable products Apple has on the market.

E. Therefore, the “Opportunity Loss” of the sadly inorganic iPhone conversation could translate into future Quarterly Loss.

4. Capitalize on the unparalleled devotion of your base by boldly admitting your mistakes, apologizing for them and explaining what you’re doing to fix the situation.

For example, if a software update is untested and we as consumers should download with care, then loudly tell us before we lose time and patience. Potential lawsuits are no excuse. Those come no matter what you do. However, bold pre-emptive action tends to stop the bleeding.

5. Create conversations that assist long-term consumers in transitioning to your latest products happily.

Respect the fact that there’s a culture of people that spend heaps of money on your brands. Some of these people beg, borrow, and steal because they love your brand so much. But there’s a bulding residue of resentment that comes with each product upgrade (e.g. the iPhone’s 3G version, the move to Power PC in the 90’s, etc.) that is becoming increasingly difficult to cleanse. See “Opportunity Loss” above and help your longtime base of consumers choose the right time to buy.

At first glance, all of the suggestions above look like something that could/would negatively affect stock prices, sales figures, etc., but I strongly assert that conversating Organically will deliver more in the long-term. This is the frightening aspect of having an organic conversations. Being open, direct and acknowledging opens one up to risk. The thing we tend to forget, though, is that every moment is a risk. Why not take smarter risks, Apple, like the ones listed above?

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The unfolding story of the locked-up iPhone is a conversational failure that has squandered the opportunity presented by a superior product and the massive enthusiasm of influential early-adopters for the sake of profit-taking and the delusion illusion of control. The iPhone story is also indicative of Apple’s conversational problem: Apple lets the products do the talking, and that mode is beginning to show signs of bankrupting itself.

It’s difficult to dispute that Apple has had a streak of slickly-designed, user-friendly and groundbreaking products since CEO Steve Jobs returned to the then-struggling company in 1997. Their characteristically (some say cultishly) loyal customer base has widened with massively popular products like the iPod. Apple has weathered the inherent problems that come with popularization with profitable schemes like the brick-and-mortar Apple Retail Stores that offer rapid-response service and repair along with product sales. So far, there has been more to cheer than to jeer. Enough cheering, in fact, for snafus like unacknowledged product defects and the iTunes DRM controversy to be effectively swept under the rug. The positive conversation about the products and household name status of the iPod has always been louder than any negative conversation for the past ten years. The launch of the iPhone and the subsequent story represents a turning point for Apple, however, punctuated by the release of the device-crippling iPhone firmware update.

Never before has Apple launched a product that so depended on other corporate entities, despite its not necessarily needing to. Instead of staying true to its historically disruptive brand character by busting the locked-up phone system in the US, Apple went with the status quo. Any trained monkey, let alone any half-awake marketing professional, knows how much the locked-up, customer-unfriendly US mobile carriers are held in disdain by the consuming public (see Consumerist). Apple could have profited handsomely by being consistent with their disruptive brand conversation and trumping the mobile carriers’ phone-locking practices with the iPhone – a device which finally makes navigating the mobile web simple for the everyman.

Instead, Apple chose to betray its character via the more “sure thing” of the status quo and a dotted-line deal, signing a heavily Apple-favored agreement with AT&T to be the sole service provider for the iPhone. Of course, in what can be seen as a sign of the strength of this disruptive brand history, methods of unlocking the iPhone for use on other mobile carriers worldwide had been uncovered within weeks of its release. What more could Apple expect of its early-adopter customers considering the image it had portrayed of itself as an alternative underdog for years?

Apple’s response, for what amounts to an eternity in the tech world, was silence about the issue until Steve Jobs’ ‘game of cat and mouse‘ quote about iPhone hackers at the UK iPhone launch event. 5 days of additional silence later, a press release comes out saying the next firmware update would render unlocked and hacked iPhones “permanently inoperable”. Attentive unlockers and hackers then begin frantically re-locking and erasing unauthorized third-party applications before the firmware update does this for them…or worse. The following Thursday, firmware 1.1.1 is released. The reports start trickling in from throughly upset iPhone owners, some of which did not unlock the device, claiming that their phone is bricked (rendered inoperable). The rule-followers were inconvenienced, and the rule-breakers that Apple so carefully cultivated as their customer base for years were out a device for which they paid hundreds of dollars. What’s worse, many of the cool apps that made iPhones sing prettier, look prettier and be more fun to play with had to be erased before the firmware did that for iPhone owners…or worse. Rightly or wrongly, loyal Apple customers are experiencing varying levels of frustration with the iPhone, and the negative conversation has finally gotten louder than the positive. Their great products were their winning schtick, but their crap conversation with consumers is putting Apple at an important crossroads.

Part II tomorrow.

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