What's wrong with the strategies developed by many giant corporations? They tend to be developed "top down."
What's a BlackBerry?
Check the website. Is it the Q10 (with a keyboard), the Z10 (without a keyboard), the Bold 9930, the Bold 9900, the Bold 9790, the Bold 9780, the Torch 9860, the Torch 9850, the Torch 9810, the Curve 9315, the Curve 9310, the Curve 9370, the Curve 9360 or the Curve 9350?
That's a good example of "top down" thinking. We can maximize sales, goes management thinking, if we offer prospects a full line of smartphones from a touch-screen model to keyboard models. That way, we will be sure to have a model for every potential customer.
That's not how a customer sees it.
You would have to be a tech genius to figure out which BlackBerry might be right for you. So you might want to enlist the help of a Verizon sales rep.
That's going to be a problem. First of all, Verizon carries only three BlackBerry smartphones. How do you know if the three are the "best" BlackBerries or the ones Verizon can buy the cheapest?
My first job was selling shoes. In the back room where the shoe boxes were kept, a number of them were marked "PM." What does that mean, I asked the owner?
Oh, that's "Push Material." You sell one of those and you get an extra commission. Whenever a prospect asked, What do you suggest?, out came the PM boxes.
Since then, I've been leery of depending upon the recommendations of sales people and I'm sure many customers feel the same.
Clearing up customer confusion.
Time is money. Most customers don't want to waste time picking out absolutely the best and cheapest product on the market. They just want to make a good choice.
Powerful brands that stand for something simple reassure consumers they have made the right choice. Hellmann's in mayonnaise. Heinz in ketchup. Hertz in rent-a-cars. The iPhone in smartphones.
Steve Jobs famously told Business Week: "People don't know what they want until you show it to them." That comment led many management people to believe he was arrogant and didn't care about customers.
That's not the way I see it. What he was doing, in my opinion, was putting himself in the place of customers and trying to figure out what would please them.
That's the essence of what I've been calling "bottom up" thinking. Put yourself in the customer's shoes instead of thinking like the chief executive of a multi-national corporation.
A customer doesn't buy a "full line of smartphones." A customer buys only one smartphone, so the full line in itself is anti-customer thinking.
Much better is the Apple strategy. Offer only one smartphone, the iPhone.
In the five years Apple has been in the smartphone business, the company has introduced only six different models: iPhone, iPhone 3G, iPhone 3GS, iPhone 4, iPhone 4S and iPhone 5.
You want the best smartphone? Here it is, the iPhone 5. That's a friendly, customer-oriented approach that can be very effective.
Apple gets off the track.
Now that Steve Jobs is no longer with us, bottom-up thinking is losing out at Apple. And top-down thinking is taking over.
In addition to the iPhone 5 ($200 with a two-year contract), Verizon is selling the iPhone 4S ($100 with a two-year contract) and the iPhone 4 (free with a two-year contract.)
"Full line" thinking has also hit the iPad with the introduction of the iPad mini. And the Wall Street Journal recently reported that Apple is trying to decide whether it makes sense to offer a cheaper iPhone as it tries to boost sales in less-affluent countries.
These moves don't bode well for the Apple brand, and the stock market seems to agree. After reaching $705 a share in May of last year, Apple's stock is now down to $450 a share.
The hiccup at Apple is nothing compared to the branding problems at Hewlett-Packard. With last year's sales of $120.4 billion, Hewlett-Packard has a market capitalization of just $47.5 billion.
Even with the recent decline in Apple's market capitalization to $422.8 billion, it still is more than eight times as much as Hewlett-Packard's.
What's a Hewlett-Packard?
A laptop, a desktop, a printer, a monitor and a combination laptop and detachable tablet. When you try to market everything under the same brand name, it never works . . . in the long term.
Furthermore, what does your advertising say? And how can a prospect remember your message if you try to hook a dozen messages onto one brand name?
Look at Hewlett-Packard printers. The company markets 78 different printers with 6 different model names: Designjet, Deskjet, ENVY, LaserJet, Officejet and Photosmart. All under the Hewlett-Packard name.
Compare Apple to Hewlett-Packard.
When the company introduced the iPhone 4S, it dramatically increased its advertising budget. Maybe you remember some of the ads.
- "Am I close to the Central Park Zoo?"
- "Where's the nearest gas station?"
- "Will I need an umbrella this week?"
- "What's my day look like?"
The copy was short and succinct. "You speak. Siri helps. Say hello to the most amazing iPhone yet."
Tell the truth. Compared to Apple, do you remember any of Hewlett-Packard's recent advertisements?
When you put your name on everything, you can't effectively advertise any single product because consumers have no way of associating your message with that product. The best you can do is to run "corporate-type" messages and most marketing people know how ineffective that can be.
("Make it matter" is the meaningless slogan of Hewlett-Packard.)
Meanwhile, in the boardrooms of Corporate America.
I've been there. I've heard the same thing many times. "We're a great company with great products and a great brand name. Why can't we use our great brand name on all of our great products and services?"
That's top-down thinking and it doesn't work . . . in the long term.