In January of 1977, when Apple first incorporated, investor and advisor Mike Markkula laid down a three part marketing strategy that has worked extremely well for them to this very day:
- Empathy – We will truly understand their needs better than any other company.
- Focus – In order to do a good job of those things we decide to do we must eliminate all of the unimportant opportunities.
- Impute – People DO judge a book by its cover. We may have the best product, the highest quality, the most useful software etc.; if we present them in a slipshod manner, they will be perceived as slipshod; if we present them in a creative, professional manner, we will impute the desired qualities.
These core values have carried Apple to a market valuation of $500 billion. Can small businesses and other players learn lessons from Apple’s marketing strategy, without their billion dollar marketing budget? Absolutely.
1. Apple’s Marketing Budget is (Relatively) Tiny
Apple is sometimes criticized for putting marketing ahead of features. I’ll even admit that I’m a PC man myself. But the truth is that Apple doesn’t actually spend very much on advertising.
True, a billion dollar advertising budget is huge. Most of us would probably be happy to just take that money to the bank and forget about running a business altogether. But it’s actually paltry in comparison to their competitors.
Microsoft spent over $2.5 billion in 2013. Samsung? They spent well over $4 billion on ads in 2012. In fact, Apple’s advertising budget is nearly identical to HP’s, and only a little more than Dell’s.
It sure doesn’t seem that way, does it?
That’s because Apple’s approach to marketing is similar to its approach to product. They don’t embellish on features. They don’t feel the need to be everywhere. They simply invest on the things that they know will differentiate themselves from the competition.
Here’s one striking example. You probably think you’ve seen Apple advertisements for the iPhone this year. You haven’t. Instead, what you’ve seen are advertisements for wireless companies. These wireless companies want to advertise the fact that they are compatible with the iPhone.
Not only that, Apple sets a series of restrictions on what those advertisements can look like. The carriers are paying for the ads, but Apple is controlling the message.
It’s not because the iPhone’s specs are better than the competition. High end smartphones of all brands have specs similar to or better than Apple’s.
Instead, Apple has relied on its exclusivity. Apps need to be approved by Apple before they can be bought in the store. The first iPhone was only available on a single carrier. Initial product launches are produced in limited runs. Special gold iPhones are extremely rare.
Regardless of what you think of Apple, you can agree that when it comes to tech, there are the people who have Apple products, and the people who have something else. Apple has its own ecosystem, and the club that comes with it.
Exclusivity can’t work in isolation, of course. Apple’s products are all legitimately high end. Unlike other players in the market, they don’t release low end products. While there are certainly legitimate criticisms that Apple products cost more than they should based on the specs, Apple can do it because they have created an exclusive brand. Their products help feed that image, because even if some people think they’re overpriced, they don’t release mediocre products.
2. It’s Better to be First than Best
The iPhone wasn’t the first smartphone, but it was the first multi-touch touchscreen device, and the first phone with an auto-rotate sensor, and the first phone with full internet access that was intuitive to use.
Similarly, the iPad was not the first tablet computer, but it was certainly the first of its kind. Perhaps just as importantly, it was originally considered a terrible idea, it was shot down by the critics, and the name was compared to feminine hygiene products. Ultimately, none of it mattered. The iPad completely revolutionized the mobile computation marketplace.
The world’s top PC vendor now sells more tablets and phones than PCs.
Apple’s products may always be high end, but they are no longer the best out there. It doesn’t matter for Apple. They were first. For a year or so after their initial releases, they weren’t just the best, they were the only.
It’s not as though Apple is the only business that can pull this kind of thing off. The Soma water filter was a successful KickStarter project, earning $147,000 in startup capital, and went on to earn $3.7 million in seed funding. Just as the iPhone wasn’t the first smartphone, Soma certainly wasn’t the first water filter. It was, however, the first sustainable water filter with a focus on beautiful design.
You don’t need to be a genius in order to be the first to do something. Nor do you need to have tremendous amounts of startup capital. You just need to look at the existing marketplace and find what’s missing.
There are always opportunities left.
Justin Winter’s Diamond Candles is a great example. You might think that candles have been done, that there’s simply no room for innovation in that industry. But Justin Winter built a company with a $12 million run rate in 18 months based on candles. His innovative idea? Hide a surprise ring in the candle, priced between $10 and $5,000. That didn’t require millions of dollars of startup capital or access to advanced technology. It did allow him to be first in his market.
3. Design is King
Apple lives and breathes design.
Pillars of Steve Jobs’ design philosophy include:
- Craftsmanship – Apple is famous for doing things like making sure the circuit boards look beautiful, or exquisite laser etchings in places you might see once or twice a year. This attention to detail and beauty gives users the sense not just that they want their products to look good, but that they take pride in them.
- Friendliness – In the early days, Apple’s success is owed almost entirely to being the first user-friendly computer company. This approach has been a crucial differentiator in the modern marketplace as well. The multi-touch screen of the first iPhone, and later the iPad, were so intuitive to use that they didn’t need instructions. Apple is famous for running usability tests and embracing “participatory design” in a way that makes their products exceedingly simple to use.
- Empathy, focus, and impute – We mentioned these, from Markkula’s memo, in the beginning of the post, but they are so crucial that they are worth mentioning again. Apple’s ability to understand exactly what consumers are looking for, to focus exclusively on those and to discard the rest, and to communicate these differentiators on-sight, is what has allowed it to become such a monumentally successful company.
These principles apply to all businesses, and are often more important for small businesses than large ones. Where big businesses often have the option of competing on price, small businesses rarely do.
The small business can’t and shouldn’t compete on features or price. It should compete by having a singular focus on solutions that no other product is fully involved in. It should embrace luxury and customization, it should be friendly to the target audience, and the product must communicate these ideas on first contact, without explanation or marketing necessary.
Design isn’t just important for the product. It’s important for your website, your marketing, and anything else you’re associated with. Academic research by Elizabeth Sillence has shown that 94 percent of users cite design related reasons when they believe a website isn’t trustworthy.
Further research by neuroscientists reveals that a third of consumers choose products strictly because they look different from their competitors.
4. Selling as a Service
Apple stores have the highest revenue per square foot of any retailer in the United States, roughly $6,000 per square foot. This is twice as much as Tiffany’s, the runner up. Other than those two companies, no other retailer earns more than $2,000 per square foot.
Why are Apple stores so successful that they can legitimately count as outliers?
According to CEO Tim Cook, it’s because the stores are less about selling and more about serving. “The store acts as a gathering place. It’s a place that has an important role in the community.”
According to The Next Web, Apple stores are successful because they employ tactics like:
- Easy access and view of all products – While every Apple store has hundreds of gadgets in it, you can spot exactly what you’re looking for as soon as you walk in the store. Perhaps more importantly, you can easily access and interact with the products in a low-pressure environment. Having this first-hand experience with the product alleviates concerns and allows users to imagine what owning the product will be like.
- Streamlined transactions – Apple employees have mobile point-of-sale devices and can run a sale from anywhere in the store. There’s no scary checkout line to scare users away from a purchase.
- Community – Apple stores are designed and staffed to create a sense of community. Employees walk around the store and assist customers. They are carefully trained to take customers on “rides” and make the experience enjoyable, as opposed to trying to sell. The Genius Bar also makes the customer service experience an enjoyable one.
- No clutter – Apple stores are kept meticulously clean, well-organized, and free of clutter. There are no distractions.
- More than just buying – The Apple store is more than a place to buy Apple products. It’s also a place to activate your phone and diagnose gadget problems.
As small businesses, we can’t rely on products alone. It’s all about context. The service and the experience surrounding the product can be just as important as the product itself, sometimes even more so.
This is why inbound marketing techniques have proven themselves so effective online. Businesses that approach the website itself as a service, not just a place to buy, tend to be far more successful than their competitors.
5. Selling Points, Not Specs
Apple does not compete on price, and it does not compete on product specifications. Apple always competes on selling points.
Visit any Apple product page and you will see that it’s not about the specs. This iPhone 5c video is about simplicity, color, ergonomics, a meticulous manufacturing process, console level graphics, battery life, FaceTime calls, wallpapers, window translucency, and product unity.
To a hardcore geek, all of this might seem like fluff, but it’s what they know their customers care about. You can certainly find the product specs on Apple’s website, but they know that people buy for emotional reasons, not for technical ones.
By putting the focus on what the product does for users, and designing a product meant to meet those needs, they take the focus off of the specifications. This allows them to compete on price with other gadgets, even when their technical specifications might be lower. The reason for this is simple: a product is arguably more useful if the technology is designed to meet specific needs for specific customers, as opposed to simply being faster or more powerful.
As a small business, this should be good news. When you put the emphasis on the meticulous care put into a product, its unique selling proposition, the luxury and simplicity, and the way it will make your customers’ lives better, you don’t have to worry so much about the price or the other easily measureable specifications that might make your competitors appear “better.”
Apple’s success is uniquely important for small businesses and startups because, unlike the Wal-Marts of the world, their strategies are ones we can emulate:
- Leverage the exclusivity that comes with being a small brand
- Compete with unique products, services, and content and create new product classes, rather than competing on old ones
- Differentiate on design with a laser-tight focus on specific needs, a lack of clutter, and pride in craftsmanship
- Earn and keep attention with services, free of charge, as opposed to push marketing
- Don’t compete on price or easily measureable specs. Compete on selling points.
I hope this has been helpful, and if it has, we’d appreciate it if you passed this on. Thanks so much for reading, and please leave us a comment if you have something to add.
About the Author