New Data Reveals Apple's Flawed iPhone 5 Marketing Strategy

Over the past nine months, according to information that analytics firm Networked Insights provided exclusively to Fast Company, Millennial and teen iPhone purchase intent dropped sharply. Has Apple lost its cool?

After years of launching some of the most talked-about smartphones, tablets, and laptops of all time, perhaps Apple’s management team thought it could afford to not listen to its customers.

In April, for the first time in 10 years, Apple reported shrinking profits and declining shipments of the iPhone. In a conference call with investors, CEO Tim Cook made a frank admission to those who were disappointed in the company’s financial performance. "We know we didn’t meet everyone’s expectations," he said. In fact, the expectations Apple needs to meet include not only analysts and shareholders, but also the consumers who put Apple back on top in the first place. What’s surprising is that these consumers, like consumers across all product categories, are voicing their concerns loudly and clearly.

As competitors begin to gain traction at its expense, Apple’s failure to tap into what’s being said through social insights and develop a data-driven marketing strategy is becoming an object lesson for businesses everywhere. Consider this a cautionary tale.

When Apple launched the iPhone 5, there were loud cheers from the company’s live event in California. Offstage, however, the conversation was broader and more sophisticated. Across the social web as the unveiling took place, socially active influentials were homing in specifically on the features that mattered to them most. Social analysis painted a clear picture of the key elements that would be driving consumer purchase decisions for Apple and its competitors. Conversation about features like screen size, battery life, and connection speed all spiked immediately on the social web.

The evolution of marketing decisions

Contrast this with the traditional approaches to marketing that have been commonplace. There used to be only two ways key decisions about product design and marketing were made. There was the Steve Jobs model, where a highly influential leader imposed his taste on the public at large. These kinds of organizations are rarely successful and sustainable even less frequently. The ongoing criticisms of Tim Cook’s leadership make this clear.

Then there is the focus group model, in which companies invested considerable time and expense tapping into consumer opinions using dated research and divorced from the way their target customers behave in the real world. Surveys suffer from the same shortcoming.

Data-driven marketing, on the other hand, is both more directional and valuable. It’s directional because the comments made on social media are genuine, offered voluntarily without incentives and more valuable as products hit the shelves, not months afterward. They are large in sample size, providing scale and relevancy. They are more personal because they allow companies to develop a more intimate relationship with customers, responding directly to feedback and creating greater transparency around their efforts to solve problems and create value.

Social insights feed an "always-on marketing" strategy, in which conversations on Twitter, Facebook, and many other sources continue to inform decision-marketing long after the launch party has ended.

Back to Apple. Analyzing the data painted a clear picture of Apple’s teetering grasp of the smartphone market.

From September to today, the number of conversations on social channels about iPhones has declined for two of the company’s target audiences: Baby Boomers and Generation Xers.

Looking at two other lucrative consumer audiences—Millennials and teens—shows a similar pattern. Despite a spike in conversations around last Christmas, iPhone conversations have been consistently declining since the iPhone 5 launch in October.

The number of conversations through the social web only tell one aspect of the story, however. A more telling aspect can be seen by looking at purchase intent among the key Millennials and teens demographics.

Purchase intent for these consumers, despite an expected spike around Christmas 2012, has suffered a sharp decline in the last nine months.

What data-driven marketing will mean

The power of socially driven data goes way beyond listening—the aspect that has received the most attention and adoption. The data is equally valuable for audience targeting, content strategy development, purchase funnel analysis, and even media selection. Listening merely provides validation of what has happened. The true value that data offers is predictive.

The capabilities to gather insights from social data outlined above simply weren’t available five years ago. They mean taking the guesswork out of important elements of marketing strategy. They also mean marketers will not only need to better understand the difference between simple measurement versus analytics, but how to identify the right enterprise platform that will truly serve their needs. The rise of data-driven marketing will also require a cultural shift that transcends the gut instinct style of creative decisions that drove campaigns in the past and cultivating a greater appreciation of data at all levels of an organization.

Finally, real-time marketing will require real-time flexibility and a willingness to change tactics as the consumer insights become clearer. Keeping up a conversation requires both listening and responding. Brands that use analytics to assist with the former must be prepared to foster an agile approach to participating in the dialogue that’s taking place online.

"A lot of times, people don’t know what they want until you show it to them," Steve Jobs famously said. But once you show them, they may begin to know more about what else they want, and thanks to companies like Apple, many of them now carry mobile devices that help them express those opinions with unprecedented ease and at previously unimaginable scale.

The good news is that marketers can also aggregate and synthesize those opinions in ways that will help them determine in advance the best course of action. Apple may never again employ someone like Steve Jobs who can chart a course to its next phase of innovation, but it and every other company will always have a source equally knowledgeable and important: its customers.

Dan Neely is founder and CEO of Networked Insights, a social media analytics company. Follow him on Twitter at @dneely40.

[Image: Flickr user Subflux]

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