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THE APPLE EXPERIENCESECRETS TO BUILDING INSANELY GREAT CUSTOMER LOYALTY
By CARMINE GALLO
McGraw-HillCopyright © 2012 Carmine Gallo
All right reserved.
Chapter OneDream Bigger
We attract a different type of person, someone who really wants to get in a little over his head and make a dent in the universe.
As the world mourned the passing of Steve Jobs in October 2011, commentators were discussing the principles that made Apple a success. During an interview with the ABC News program 20/20, correspondent Deborah Roberts asked me about the role vision played in Steve Jobs's success. "Vision is everything," I said. "A bold dream attracts evangelists, and no lasting brand can be built without a team of dedicated people who share the vision. Passion fuels the rocket; vision directs the rocket to its ultimate destination." You simply cannot build an organization that delivers an extraordinary customer experience unless you have a clear vision of the type of experience you plan to offer.
How did Steve Jobs start a company in the garage of his parents' house and grow it into one of the most valuable companies on the planet? Did it take passion? You bet. Hard work? Creativity? Ingenuity? Yes, yes, and yes. But it all started with a vision that could not be contained within the small confines of the garage: to put a computer in the hands of everyday people. Once the vision was established, everything else fell into place. Vision was everything. Steve Jobs's vision was not to make a load of money and retire on a yacht. (In fact with the exception of a corporate jet, Jobs lived a humble lifestyle. Microsoft cofounder Bill Gates once visited Jobs at his home and wondered how so many people could fit in such a modest dwelling.) Jobs's vision was to make tools that would help people unleash their personal creativity. He wanted to build a company that would outlast him. He wanted to build a legacy. "Being the richest man in the cemetery doesn't matter to me," Steve Jobs once said. "Going to bed at night saying, 'We've done something wonderful,' that's what matters to me."
A vision helps you see things that others might have missed. For example, when Steve Jobs and Steve Wozniak started Apple on April 1, 1976, "Woz" shared Jobs's vision to build "personal" computers that average people could use and enjoy. The Apple II became the most popular personal computer of its time, but it was still not ready to enter the homes of everyday people. In 1979 Jobs was given a tour of the Xerox research facility in Palo Alto, California. There, for the first time, he saw a crude "graphical user interface" where a user would interact with a computer via colorful icons on the screen and a gadget called a "mouse." Jobs instantly saw the potential of the technology for satisfying his vision of bringing a computer into the homes of everyday people. Jobs once said Xerox could have dominated the entire computer industry but did not because the Xerox vision was limited to building another copy machine. In other words, two people can see the same thing but interpret it differently based on their vision.
The Real Beginning of the Apple Store
Steve Jobs had a lot in common with country music superstar Garth Brooks. Both artists were inspired by innovators who paved the road ahead of them. I saw Brooks perform a one-man show at the Wynn hotel in Las Vegas in which he captivated the audience for more than two hours. When Brooks walked on stage, he told the audience that for them to really understand his music, he would have to start from the beginning. Brooks explained that his musical career did not begin with his first single. Instead his inspiration started in the 1960s, when his parents would bring home new albums in both country and contemporary styles. If Brooks had played only his hits during the Wynn performance, it would have been a richly satisfying experience for Garth fans. But by taking his audience on a journey through the music that inspired him, Brooks created an unmatched and memorable experience for everyone in his audience, country and noncountry fans alike. So let's steal a page from the Garth Brooks songbook and start from the real beginning of the Apple experience.
The One Question That Unleashed Apple's Success
When the Apple Store celebrated its ten-year anniversary on May 19, 2011, the media focused on the growth story: one billion visitors, 325 stores, $10 billion in sales, and so on. The numbers were and continue to be astonishing: $6 billion in quarterly revenue, $4,700 in sales per square foot, and 22,000 weekly visitors in a typical store. But numbers alone won't teach you anything. It's the story behind the numbers where you'll learn how to turn your business into an experience so thrilling that your customers will become true advocates for your brand.
The story of the Apple experience did not begin with the opening of the first Apple Store at Tysons Corner, Virginia, in 2001. It began forty years earlier with the founding of another brand that would be credited with completely reinventing the customer experience—the Four Seasons. When Steve Jobs first decided to enter the retail business, he hired former Target executive Ron Johnson. Jobs challenged Johnson with this question: who offers the best customer service experience in the world? The answer was not another computer retailer—or any retailer for that matter. The answer turned out to be the Four Seasons hotel. Just as Garth Brooks did not invent country music, Steve Jobs did not invent exceptional customer service. Both artists, however, copied a great idea, refined it, and took it to the next level.
The Brand That Inspired Apple Retail
Isadore Sharp founded the Four Seasons in 1960, but it took another decade for the brand to become synonymous with luxury. Prior to building his first luxury hotel in London in 1970, Sharp's experience had been limited to building homes, apartments, and small motels in Toronto. But homes were too small for Sharp's outsized ambition. Sharp's goal—his vision—was to create a worldwide luxury brand that would offer an unparalleled customer experience. Most bold visions are met with a high degree of skepticism, and Sharp's vision was no exception. Sharp's wife, Rosalie, admits that she didn't share Sharp's confidence, but thankfully for the Fours Seasons, Rosalie kept her reservations to herself.
Like Steve Jobs, Sharp was a dreamer. He refused to settle for anything less than excellence. "So much of long-term success is based on intangibles. Beliefs and ideas. Invisible concepts," Sharp once said. Once Sharp's vision was set—a worldwide brand of luxury hotels that offer exceptional customer service—he had to fill in the blanks. Sharp asked, "What would that luxury experience look and feel like?" You might be surprised to learn that the innovations that follow are all thanks to Sharp and the Four Seasons:
* Travel-Size Shampoo. Having grown up with three sisters, Sharp learned a few things about women and their travel habits. He learned that they didn't like to wash their hair with soap, so they carried small bottles of shampoo. The Four Seasons was the first hotel to put shampoo bottles in every room. Would you expect anything less today, even from the lowest budget chain?
* Fitness Rooms. Sharp liked to exercise, and he knew that travelers would need a revival, especially after long flights. The Four Seasons was the first hotel to provide fitness centers. The next time you jump on the treadmill at your hotel, you've got Sharp to thank.
* Comfortable Beds. Sharp's first hotel in London catered to American travelers, many of whom would fly overnight from the East Coast. Above all else, those weary customers wanted a comfortable bed. Sharp searched several countries in Europe before he found a bed that met his standard for comfort. The Four Seasons offered the most comfortable beds of any hotel chain at the time, and today there seems to be an all-out war among hotels to see who has the best beds.
* Full-Service Spas. In 1986 a Four Seasons resort north of Dallas was the first to introduce a full-service spa on the property. Anytime you get a relaxing massage on your hotel's property, you can credit Sharp's vision. He knew what travelers wanted even before they could express it themselves, just as Jobs knew what Apple consumers would want before they knew it themselves.
Sharp was responsible for many, many more innovations. "We initiated many ideas to enhance customer appreciation," said Sharp. "We introduced no-smoking floors. We anticipated trends in low-fat, low-salt haute cuisine. We put shampoo, hair dryers, makeup mirrors, and bathrobes in rooms for guests who prefer to travel light. Each room was slightly larger than our competitors' regular rooms, with quieter plumbing, a better showerhead, and a bed with a comfortable, custom-made mattress."
The Four Seasons, in turn, inspired some of Apple's retail innovations. Steve Jobs and Ron Johnson asked themselves, "What would the Four Seasons do?" For starters, the Four Seasons does not have cashiers. Instead it has a concierge (another innovation that Sharp brought from Europe to the U.S. hotel industry). When the Apple stores first opened, a "concierge" greeted customers. Although the concierge title no longer exists, a greeter still stands at the door ready to welcome customers into the store. Apple copied another Four Seasons innovation: the bar. Walk into an Apple Store and you'll find a bar, just like the Four Seasons. There is one difference: The Four Seasons bar dispenses alcohol. The Apple Genius Bar dispenses advice.
The Genius Bar is an example of connecting ideas from different fields, a concept I explore in The Innovation Secrets of Steve Jobs. Your customer experience is only going to be as good as the model you use for inspiration. Studying brands outside of your industry can spark creative brainstorms. Johnson was actually the first person to come up with the idea of the Genius Bar after listening to members of his retail development team. According to Jobs's biographer, Walter Isaacson, Jobs thought it was a crazy idea. But Johnson was a fearless employee (a concept you'll learn in Part I) and stood his ground. The next day Jobs had filed to trademark the name, Genius Bar.
The Three-Word Vision That Built FedEx
Michael Basch learned the power of vision at FedEx. During his ten years as senior vice president of sales and customer service, he helped take FedEx from $0 to over $1 billion. Today everyone knows FedEx's three-word vision: Absolutely, Positively, Overnight. After its first day in operation, however, FedEx managers communicated a different three-word vision to their employees: get the packages.
Basch, Fred Smith, and the other senior executives at FedEx were justifiably anxious on the new carrier's first day of operation on March 12, 1973. After years of planning, FedEx had twenty-three airplanes positioned in ten cities. Dozens of salespeople were ready to accommodate the flood of orders. There was one thing they didn't expect—no packages. On the first day of operation, FedEx delivered exactly two packages! Founder Fred Smith had the great idea of creating a customer-focused delivery system based on the motto, "People-Service-Profit." But the company would be out of business within a week if it didn't get the packages.
FedEx managers made the decision to communicate that vision—get the packages—and get out of the way of employees who were tasked with accomplishing the vision. In his book, Customer Culture, Basch tells the story of Diane, a tracking clerk, who received a call from a distraught bride-to-be who needed a wedding dress to be delivered for her big day, which happened to be the next day. The dress, however, was 300 miles away. Diane had internalized the vision and did what had to be done. She lined up a Cessna and a pilot to fly the package to Florida. The bride was so ecstatic she called Diane from her honeymoon! She said the FedEx story stole the show. Everyone at the wedding was talking about the company that gave a wedding dress its own plane.
When Diane told Basch about the situation, he was taken aback. They would surely go bankrupt if they kept pulling these stunts, he thought. But Diane could not be faulted for creatively executing on the vision. It didn't take long for Basch to come around. One company executive who heard the wedding story assigned his company's shipments to FedEx and began sending twenty packages via the service. Others at the wedding began using FedEx as their exclusive priority delivery company and continued to do so for years. According to Basch, "The biggest lesson was that if you were clear about what you wanted as leaders and then let people give it to you without tying their hands behind their backs, you got it."
In hindsight, Basch believes it would have been worse if FedEx had delivered 300 packages on its first day. Why? Early success breeds complacency. FedEx might have become sloppy about service and the customer experience. Instead, everyone began to obsess about creating an extraordinary service culture. According to Basch, "One of the most valuable lessons was the power of people when they have a common vision and commitment."
Basch says that a well-designed culture has six primary attributes, the first of which is vision, a clear picture of the desired customer experience (the other five are also relevant to the Apple experience and will be explored in the next chapters). "The vision provides the light and the gravitational force. The vision is the compass of the enterprise—its purpose for being. More practically and specifically, it is the experience that the organization is attempting to create for its customers, employees, and owners ... the experience is then condensed into a headline that provides direction."
The Apple Vision: Enriching Lives
Let's get back to the vision behind the Apple Store. Recall from my introduction, the vision behind Apple Retail can be found on the credo card: Enriching Lives. The former head of Apple Retail, Ron Johnson, said that when Apple opened its first retail store, not one analyst gave Apple a chance. Apple had 3 percent market share, Gateway had shuttered its retail because the stores were attracting only 200 or so people a week (today 22,000 people a week visit the typical Apple Store), and Apple was competing against computer players like Dell whose slim margins and lower costs seemed to be the preferred business model.
According to Johnson, "A vision is something that you can say in one sentence. The fewer words the better. It's like saying 'A thousand songs in your pocket.' It's a clear vision that everyone understands." Johnson and Jobs decided to craft visions for their competitors. For example, retailers like Gateway "sell boxes." Johnson believes a company vision will lead it to pursue a very specific set of conclusions about the experience it offers. So if your vision is to sell boxes or "stack 'em high and let 'em fly," as some retailers do, it will lead to a business model that competes on price and price alone. For some large retailers, offering the cheapest price on the block has clearly been a formula for success. But most businesses cannot simply compete on price. They must differentiate on the customer experience. "When we envisioned the Apple model, we said that it has got to connect with Apple," said Johnson. "So it was easy. Enriching lives. That's what Apple had been doing for thirty years."
When a company starts with a vision such as "enriching lives," magical things begin to happen. For Apple, "enriching lives" meant offering one-to-one training and group workshops for people who wanted to release their inner Scorsese, directing and editing their own movies, publishing their family memories, or dreaming of becoming rock stars. Steve Jobs said that people didn't want to buy computers; they wanted to know what they could do with those computers. Jobs understood that his customers didn't want to walk out of a store with a box. They wanted to leave with a tool to help them fulfill their dreams.
The Devil's in the Details, but Success Comes from Above
Steve Jobs was fanatical about the details of the customer experience. Jobs once called an executive who worked for an Apple partner and asked, "Are you mad at your customers?" The executive had spoken to Jobs before, so he wasn't surprised that Jobs had called. He was taken aback by the question, however. "We're not mad at our customers at all," he replied. "Then why does your disclosure statement sound so angry?" Steve Jobs asked. "You should be more friendly to your customers at every touchpoint."
Excerpted from THE APPLE EXPERIENCE by CARMINE GALLO Copyright © 2012 by Carmine Gallo. Excerpted by permission of McGraw-Hill. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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