Published by David Lapin under Uncategorized
August 14, 2011
The Economist’s Schumpeter essay this week attributes much of Apple’s rise to dominance to
…a new, global breed of consumer who loves to snap up the latest gizmos displayed in the firm’s alluring stores.
I don’t think so.
I think there is nothing new about this breed of customers who want more than a commodity when they spend their money. What’s new is a tech company understanding the deep intangible needs of its customers in much the same way that fashion companies always have, and nourishing that need in every product and in every customer interaction.
We tend to view customers as people who have a need for things or services, but people will often pay significantly more if those things also satisfy their deeper, intangible needs and desires. Consider how much more, people who can afford it, will pay for a first- or business-class seat on a flight than a discounted economy-class seat that would get them to the same destination in the same amount of time. The extra cost is not always justified merely by the additional space and better meals and service.
- Lead By Greatness
The same applies to people’s willingness to pay more for a fashion item than a similar generic item of clothing.
Another quote from Lead By Greatness:
People, often worn down by day-to-day challenges and the chores of life, come to forget the majesty of their own humanity. Occasionally they want to feel like royalty and will pay a lot to restore that sense of self-worth. People’s need for dignity is an intangible one, but one that all people crave and value, and for which they will pay a premium if they can. Identifying people’s deep intangible needs creates opportunities for product innovation and sometimes even for new industries.
Sometimes these intangible needs are not about dignity and self-worth. Sometimes they are about coolness and fun, or youthfulness and energy. Apple understands this and uses its tangible offerings not only to satisfy tangible needs for a computer or phone (a commodity) but also to deliver an intangible experience that their customers crave. When one buys an Apple product you get a piece of the Apple culture, a spark of Steve Jobs’ soul.