As I mentioned a couple days ago, Apple just cut the price on the iPhone by $200. Many iPhone owners were not happy. Tyler Cowen is not happy that they’re not happy. Steve Jobs takes a more nuanced view, apologizing and offering $100 in store credit to previous iPhone purchasers. This is a potentially brilliant business move -- turning anger into love for Apple, shoring up customer trust and loyalty, and making Jobs seem to be a really nice guy. (Customers forswear companies forever over lesser perceived wrongs.) I think the contrast between Cowen's and Jobs' response explains why economists tend not to make better businessmen than anyone else.Megan McArdle offers a good explanation of what's going on:
As an occasional early adopter myself, I suspect that the first emotion that the iPhone buyers felt was not anger at Apple, but anger at themselves for having such insistent preferences. The regret that you are a moron, however, is much harder to bear than the regret that Apple has turned out to be evil.Sounds about right to me. Were I not a budget-constrained graduate student, I might be among the ranks of the distressed. Had I been, it would be far easier to resent Apple than to resent myself.
1 comment:
I agree with Tyler Cowen: it's basic economics...early adopters pay for that privilege. As an early adopter myself, I was more than willing to accept that fact.
That being said, what Jobs did was brilliant and necessary. He needed to do something to placate the legions of early adopters...some of their most loyal customers. Whether they were being logical or not, they needed to be given something.
His $100 store credit is an amazing move: he pleases his customer base, and gives them one more excuse to go into an Apple store and spend more money. Here's betting that most customers using their store credit will spend far more than $100 when they use that credit. I mean, there aren't that many items in an Apple store that sell for less than $100 anyway.
Then there's the basic economics...Apple giving away $100 worth of merchandise doesn't cost Apple the total $100. This is less expensive than a cash rebate.
So it's a win...win situation. Jobs gives back to his consumers when he really doesn't have to and comes off like Santa Claus. At the same time people spend more at Apple stores.
This is why Apple is the pre-eminent brand in consumer electronics: they know how to please the consumer by consistently exceeding expectations and at the same time preserving fiscal health for the company, which allows them to continue to develop devices that blow the competition away.
Post a Comment