Today I received an email from Apple. This itself is not unusual, but the enclosed copy and discount price offer was so out of the ordinary that I at first dismissed the email as spam or even a phishing scam.
But no, apparently Apple really is offering up to £275 credit against an iPhone when you trade in your existing smartphone.
If this offer came from one of the mobile networks or bulk resellers it would be par for the course – but unless it’s a one off test, it marks a radical shift in marketing for Apple, whose proposition was always as the exclusive, upscale option that never stooped to competitive pressure to cut prices.
I will leave the industry implications of this shift by Apple to the mainstream business media. But this marketing campaign offers several lessons to any business regardless of size:
- Test new ideas by all means, but don’t undermine your brand: changing your marketing approach so dramatically risks alienating your customers, undermining your brand and reducing trust. As I said, I didn’t even believe the email came from Apple at first. It was so out of kilter with the brand values I associate with Apple. Understand your brand values and keep your message consistent.
- There is no excuse for poor targeting: I am a long standing customer of Apple. The email came to an address registered as my Apple ID. They have all the information they need to sell me the benefits of a new, upgraded device. Instead, they assume I have a generic smartphone that I want to be bribed into exchanging. As a result I do not feel valued as a customer. Know your customers and market to them accordingly.
- Price offers work in the short term… : The offer in question looks generous and the campaign will probably generate sales. Because of Apple’s closed infrastructure it could be that it will generate long term customer value – but for most companies, this kind of ‘instant win’ offer is unlikely to produce long term, profitable customer relationships. Always have the lifetime value of your customer in mind.
- …But discounting eats margins and erodes your entire market: I get that the world of mobile phones is highly competitive – and your business probably also faces stiff competition. But the way to beat your competition is through added value, innovation and building lasting customer relationships. Almost all startup businesses price their goods or services too low, petrified of competition. As a result, they do not have the margin necessary to invest in their team, their products or their marketing. Resist this race to the bottom; you can’t win.
- Even if you are selling on price, remember to sell the benefits: this Apple campaign doesn’t once give me a reason why I would want to upgrade – either on the email or the landing page. For a product as central to modern life as a smartphone, there needs to be a compelling reason for choosing brand X over brand Y other than price, otherwise we would all buy generic handsets off Amazon. Always include the benefits and tell the story, regardless of the main offer.
In summary, discount price offers can work to generate short term sales and in high volume, ultra competitive markets they are sometimes an integral part of marketing strategy. Indeed, some famous businesses have built their entire strategy around cost. Apple is not one of these companies and competing on cost risks undermining their brand and turning off customers. The same goes for most small or medium businesses. Avoid discount price offers unless you are absolutely sure of the long term implications for your business.
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