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Apple, a perfect example of what can be achieved through customer loyalty

Apple store

The telco world is filled with companies who are constantly chasing new customers, but considering the success of Apple focuses on sweating the brand, should executives be looking inwards more often.

The term ‘sweating the brand’ is an interesting one, and relates to the much hyped convergence strategy. A company develops a relationship with a customer, and then uses the power of that brand, alongside the connection with the customer to sell additional products and services. The two important aspects of this concept are developing a strong, independent brand and a trusted relationship with loyal customers.

Through years of creative advertising and carefully protecting the fruity image, the Apple brand is one of the most recognisable and respected in the world. On the customer service side of things, the teams dedication to servicing customers and creating a welcoming environment in its stores, has creating a cult-like following of iLifers who would possibly sacrifice a finger for their iPhone. It took years, some mistakes and a few obnoxious statements, but Apple has created an incredibly enviable position. And what is the result, buckets of cash.

Apple recently reported its numbers for the last three months and the spreadsheets were bunging. Total revenues stood at $53.3 billion, a year-on-year increase of 17%. For the first nine months of the 2018 financial year, $202.695 billion has been bled out of the iFollowers.

Looking at how the business makes money, 41.3 million iPhones were sold for $29.906 billion. This is the core aspect of the Apple business today, but the immensely popular devices was developed through diversification. Personal computers were the bedrock Apple built its business on, and the team sold 3.7 million Macs across the last three months. Perhaps the most successful venture over the last couple of years has been the services business unit, which contains AppleMusic and AppleCare as two examples, bringing in $9.548 billion over the quarter. These are all the headline products, but when you factor in Apple TVs, smart watches, smart speakers and other subscription services, the message is quite clear; Apple can make money out of pretty much anything.

Of course, there have been some disasters. Original content has not been great to date, Shark Tank was truly awful, though using the power of the Apple brand, no-one seems to remember it. The next couple of months will see releases of various original content, including a multi-year content partnership with Oprah Winfrey.

All of the products are successful because of the Apple brand. A brand which has been created through creativity and dedication to current customers.

The convergence business model should be built on the same principles but it is not. Customer service has never seemingly been an interest of the telcos, who are constantly fighting to steal customers from each other. The strategy of these companies is simple; acquire more customers as quickly as possible, though there are numerous studies which suggest caring for and maintaining your current customer base is a much more success route.

For divergence to work, the core business needs to be sound. For the core business to be sound, customers need to be loyal. For customers to be loyal, the business needs to care for them. This is the fundamental oversight from the telecommunications industry; the customer never feels like anything more than a statistic. Telcos might be searching for the right formula to make convergence work, but they are failing at the first hurdle.

Unfortunately, the ‘sweating the brand’ strategy which Apple has moulded so effectively takes time. It also takes the right culture, foresight and innovation. Demanding investors, many of whom only focus on the next three months, remove such blue-sky ideas from the realms of possibility, while you also have to question whether the telcos are set up to achieve even the smaller fraction of what Apple has done.

Everyone wants to achieve the level of profitability which Apple makes look so simple, but few are willing to build the same foundations the iLeader has. Apple has only dominated the world over the last decade, but the culture of creating loyal customers goes back to 1976 when Apple was founded.


2 comments

  1. Alan Moore 02/08/2018 @ 9:45 am

    41,300 iPhones were sold for $29.906 billion?
    Not bad at over $700K per phone, this must be the mythical iPhone XX!

    • Jamie Davies Jamie Davies 02/08/2018 @ 9:49 am

      Excellent spot, corrected – Apple might hold users to ransom a bit, but that would certainly be taking the p*ss – the next product launch iPhone XXXXL!

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