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Chatting at the Genius bar, quaffing some fresh Apple juice

February 27, 2012

The Genius Bar is a place dedicated to providing technical support within Apple stores to customers having problems with the product or applications. In large part because it is branded, the Genius Bar is a core component of the most successful retail concept of recent times and a builder of the Apple brand.

I went to the Genius Bar in Manchester recently, with a frustration about my Mail application not-syncing between my iPhone and MacBook. At first my Genius described three or four solutions but in terms that baffled me. I thought he was in a hurry, and just trying to dispense information as fast as he could. It began to feel like any other retail electronic experience.

Then an amazing thing happened. I expressed that I was feeling overwhelmed and he changed instantly. He said, let’s start over. He wrote out some notes, drew some pictures and demonstrated what the issues were, began at step one and took me through the basics – at my level. Before long I had received a lesson on setting sync, back up and iCloud – a free service that I needed but didn’t know I needed. I was very impressed. He changed me from frustrated to a happy customer whose Apple experience will result in more sales, no doubt, and being an advocate – here’s the blog – Impressive.

The Genius Bar is another way to brand customer support where even the name makes users feel smart.  It’s an example of real customer intimacy, like the Hyundai Assurance program where they would buy back your car if you lost your job. It was rarely used but created a lot of confidence in the brand. It’s a really smart strategy in today’s crowded digital world, the concept of physical stores and face-to-face customer service with an authentic person complimenting the most innovative, technology driven customer experience brand. i-ntimate. I’ll have that © thank you!

The Apple store’s financial performance and impact on the Apple brand is amazing. In the US, sales per square foot for its stores is more than $5000, which is six to ten times other successful retailers, and the average store pulls in 18,000 visitors a week. Perhaps more importantly the stores provide a way to express the Apple brand and showcase its products, and also provide a source of energy to the brand and a new link to its fans – it’s high tech, high touch, a killer combination, and a perfect adjacency to the App Store.

There are several reasons for the success of the Apple stores – the products, the Apple brand, the store architecture, look and feel, the staffing, the locations – but the Genius Bar plays a key role and works because of several characteristics.

  • Branding. No other firm can have a Genius Bar because Apple owns the brand. But more than that, the brand has a personality – fun, humorous, cool and understated yet competent and reassuring. It’s a pleasant experience – compare this to your average mobile phone shop experience.
  • People. It is staffed by folks, Apple devotees, who are both knowledgeable and disciples of the products and philosophy, genuinely passionate about Apple. The training is disciplined following the APPLE dictum of Approach customers with a personalised warm welcome, Probe to understand the problem, Present a solution, Listen for issues, and End with an invitation to return.
  • Uniqueness. Because Apple makes both the hardware and software, it has a unique ability to create and staff a Genius Bar. Apple are different, and use a number of differentiators in a crowded market place to be leaders with premium products and premium pricing.
  • Customer-centric. It enhances the customer relationship with its person-to-person approach, it can transform a disgruntled, disappointed customer with the potential to become a negative voice in the marketplace into a satisfied, enthusiastic advocate. In turn, it creates a tribal followership, a loyal base of Apple advocates, and many people who aspire to be customers.

What is thought provoking is how Apple has moved on from the ‘creative individual’ as their core market to targeting businesses, aided by the ‘bring your own device to work’ revolution. Apple enables us to have total business and personal connectivity in all aspects of our lives with their devices and applications, wherever and whenever.

Apple uses a combined strategy of product leadership and customer intimacy – and want to be different at what they do. But in the vast majority of markets there is no such thing as ‘the best’, but most businesses articulate this as a key goal. This doesn’t work for me, trying to imitate rivals will get you nowhere, it’s impossible to do exactly what your competitors are doing and end up with superior results. Customers choose different products and services for different reasons, and it’s unlikely you’ll win them all.

Instead, focus on creating superior value for the customers that choose your company, which is a customer attraction and retention strategy in one. Doing this profitably means accepting limits and making tradeoffs – you can’t meet every need of every customer. Instead find your audience and capture their attention and loyalty. Be different, and shock your customers – in the nicest possible way – on something that is unique to you. The Genius Bar is certainly a ‘stand out from the crowd’ point of differentiation.

The Genius Bar would have been killed by many retailers during its early years when it was underused. But, as reported in an interview with the creator of Apple stores, Ron Johnson, strategic instincts prevailed over data reporting on customer traffic. Johnson realised that the Genius Bar was a vehicle to reinforce and enhance customer relationship damaged by product issues and that Apple is in the customer relationship business as much as the digital device business. As a result he stuck with the concept and was rewarded when it got so much traction that reservations became necessary to handle the customer flow.

Anyway, my point is that Apple has been able to position a branded differentiator that serves as a strong tool to promote a personalised and human connection with the customer. It supports them to maximise the usability of apple products while mitigating eventual problems, thus enhancing their customer lifetime value while reducing churn. Who said cross selling? If you’re like most (including myself), when you pay a visit to the Genius Bar you will feel inevitably very tempted to buy something else you don’t really need!

So back to my point behind this Apple-love in blog. Apple don’t try to be the best, they are focused on being unique, and compete to be unique. They’re focused on creating superior value for their chosen customers, not on imitating and trying to match or step ahead of rivals. Give customers real choice, and price becomes only one competitive variable. But understand that doing this profitably means accepting limits and making tradeoffs, as you can’t meet every need of every customer.

Nothing is more absurd, and yet more widespread, than the belief that somehow you can do exactly what everyone else is doing and yet end up with superior results. That’s what I don’t understand about the mobile phone market, where complex tariffs and multi-pricing strategies which rival mathematical complexities even Newton would struggle to understand, create a cannibalistic market and thus price attrition becomes the norm.

Grasp the true nature of business competition and you’ll see that the performing arts provide a good analogy. There can be many good singers or actors, each outstanding and successful in a distinctive way in different genres. Each finds and creates an audience, and the more good performers there are, the more the total audiences grow – they don’t take ‘market share’ from each other. This approach produces positive sum competition.

Companies that do a good job can earn sustainable returns because they create more value. At the same time, customers benefit by getting real choice in how their needs are met. Apple’s business model and strategy is based on this underlying model of how competition works. If ‘best’ is your model, you will follow the herd.

Finally, I overheard a customer talking with a Genius next to me.  The customer’s product must have been out of warranty as well, because the Genius went to his manager, (the Super Genius?) to ask how it should be handled.  She said simply: Do what’s best for the customer.

That was a high point for me as an Apple enthusiast. I don’t know if the Genius guy was instructed to act altruistic as a marketing gimmick to incite that behaviour on me and others in earshot, but it simply reinforced the reality and perception of Apple, as I sat chatting at the Genius Bar, quaffing some fresh Apple juice.

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