“Hope is not a strategy.”
-- Rick Page
Apple is able to use the iTunes 9 app to sell products without actually appearing to sell anything. Because no one likes high pressure, in your face, sales tactics, iTunes services keep the money flowing with the appearance of customer enthusiasm, not offensive sales tactics. But the line is all too easy to cross.
The Art of Salesmanship
When I was in Federal Sales at Apple, Rick Page, a superstar salesman, was engaged to teach the team about what's called "The Complex sale." Briefly, that means understanding the pain of the customer, identifying the decision makers, and providing a solution that eases the pain.
Of course, to understand the pain of the customer, and to make them realize that you do understand the pain, it helps to have a similar technical background to the customer. It develops rapport and trust. At that point, you're seen as a vendor with a solution, not a wise guy with a portfolio of products and sales quotas.
In the consumer market place, things are similar in some ways. Automobiles, tires, washing machines, and lawn mowers are a solution to a problem. Customers want the best quality, the fewest headaches, and low price - commensurate with the quality.
The fact of life, however, is that not every potential customer is always in a buying frame of mind. One cannot just open a storefront and hope that customers will rush to your shelves. Location is good, but one also has to communicate with customers, make them aware of your solutions to their problems, and then the final sales transaction is the easy part.
In America today, and I would presume in the G-20 nations, there are increasing demands on people's time and vendors spend more and more time trying to connect to potential customers -- to urge them into action. Sometimes that means obnoxious TV commercials to make a point, high pressure tactics when a customer comes into a store to browse, and a myriad of other activities designed to move the customer into a buying frame of mind. That's been going on ever since traveling salesmen sold snake oil in the old west to cure your ills. Even longer.
Finally when the vendor does get a chance to engage a customer, the goal is to convince them that their product solves a problem better than anyone else's. Note that in some cases, the problem may simply be personal satisfaction, acquisition of self-esteem, or pride in ownership. That's how a good BMW salesman can move you from a planned Chrysler Town and Country to a BMW X3.
Apple's iTunes World
Apple uses a variety of tactics to sell Macs, iPods and iPhones. But what I'm particularly interested in here is the iTunes Store, and it's a whole different world than selling Macs.
In the case of music, TV and movies, we are offered the opportunity to purchase products that entertain, amuse, or even educate us (iTunes U). The issue here is that much of the material on iTunes is a discretionary purchase. If customers are allowed to just sit around, they may find other things to do. So Apple's goal is to make the experience of iTunes as much fun as possible and make buying things as painless as possible.
Therein lies a potential problem.
The reason is that if Apple is going to continuously make more and more money from iTunes, the company has to develop new and innovative ways to expose customers to either new material or that which is similar to what they've already shown an affection for. The expansion of the Genius features in iTunes 9 is a case in point. Apple has correctly estimated that if customers are introduced to music or movies similar to what they already like, the chances of a sale go up. But in the spirt of offering assistance and in the wraps of the respected moniker "Genius" used elsewhere, the customer doesn't feel high pressure sales tactics. Instead, the customer feels that the app is assisting with satisfying desires, and the advice is the very best possible.
Of course, a lot of people in 2007-2008 who had the desire to own a home couldn't afford the home. No problem. The mortgage broker was all to happy to lend them the money and take the sales commission. If the customer couldn't make the monthly payment, that was the customer's problem, not theirs.
As a result, what appears to be a friendly and enthusiastic app, iTunes 9, has to also be viewed with some introspection. For example, I noted that in iTunes 9 Preferences -> Parental, there is significant concern about the nature of the content exposed to younger family members, but the Genius function is not managed. It's socially acceptable to keep some adult content away from kids, but not necessary to constrain spending. That would be counterproductive.
The Music Shop Analogy
If the tactics of the Genius service were used in a music shop, it would sound like this:
Customer: Hi, I'm looking for a copy of Sunshine Cleaning on Blu-ray.
Salesman: Sorry it's not here yet. Next week. So you're an Amy Adams fan perhaps?
Customer: [wanders down the aisle] I am.
Salesman: [follows the customer]. So if you like Amy Adams, I'm beting you'd like Charlie Wilson's War. We have that on Blu-ray, um, right here!
Customer: Not interested.
Salesman: Don't like Tom Hanks and war, huh? I understand. [Moves closer.] By the way, don't miss our special wall of comedy movies. It's right over there. All Kate Hudson movies are on sale.
Customer: Hey, just tell me when Sunshine Cleaning will arrive. [moves towards the exit]
Salesman: Sure! Just give me your e-mail address, and I'll let you know. Watch for the ten percent coupon off on your second Blu-ray movie!
Customer: I'll skip the e-mail thing. [grunts, heads out the door]
The customer, disgusted with this pressure, goes home and orders the movie, in peace and quiet, from Amazon.
That Apple can achieve the same thing in iTunes 9 is both smart and cause for concern. We've heard too many stories this year of people who threw discretion to the wind and loaded up their credit cards. When is it time to pull back? Set a budget. Ponder other more productive things to do besides mindlessly and greedily collect music and video content? Apple has no answer there. You can spend as much as you wish. Of course, we all feel that we're in control so no problem, right?
An Uncomfortable Question
The next question to ask is, how far can Apple go in this process without offending the sensibilities of even the most hardened entrepreneur? Apple has set one minor precedent by forcing the download of SD versions of TV shows and movies when the HD version is purchased. Of course, that's in the name of compatibility with the iPod, but it also chews up disk space and wastes bandwidth. At what point will we have free movies, time limited, similar to the ones we've bought, downloaded as trialware, against our wishes? "Don't like it? Just delete it!"
There are endless opportunities for Apple to conjure up new sales methods that, if presented in person, would be considered offensive, as in the example above. Subtle offerings designed to look like a service combined with a customer's natural inclination to own everything and see everything could become insidious down the road.
For now, iTunes 9 is helpful and courteous. It's easy to walk away. But in a world of supremely gifted salesmen and technologists, it's tempting to embrace that "Hope is not a Strategy" approach to extremes. When the customer isn't buying enough to meet your sales expectations, some strategy must be found to get the customer moving. Incite to action. Just how that's permitted to be done is a social value that has to be imposed on top of (unrestrained) free enterprise. We've recently paid the price for ignoring those social values. My hope is that Apple, great that the company is, will always observe that underlying ethical value that balances respect for the customer against extravagant profits.