There is nothing that I find more fascinating than a fabulous new technique to attract customers to buy a product and induce – and sometimes even compel – customer loyalty. That is what I call brilliant marketing. And every now and then I see an example that makes me say, “Now that was a brilliant idea!”
Let’s start with mainframe software. I am of course referring to the real mainframes (not the ones that claim to be mainframe-like) – specifically, these are the ones built to run with the IBM z/OS (MVS heritage) mainframe platform. Clearly there is some brilliance in the terrific capabilities that the software provides, but that’s not my focus here. The real brilliance is the fact that customers get hooked on the platform, and the software that is charged on a monthly license fee translates into an annuity stream for IBM long after the product is sold. Each time a new mainframe is sold, even into an existing account, it extends that annuity stream longer. Brilliant.
The Mobil Speedpass is another great example. That little plastic widget on my keychain probably cost very little for Mobil to implement, but because it is there I look for Mobil stations to stop at even if the gas costs a few cents more per gallon. Why? They made it very easy for me. I don’t need cash, and I don’t need to get a credit card out. I just swipe, pump and go. Brilliant.
Amazon has what might be the best example of online loyalty marketing that I have ever seen. Their ‘recommendations’ have often caused me to purchase a book that I had no idea I needed. A lesser-hyped marketing play in their arsenal is their Amazon Prime membership where (for $79 per year) you can get unlimited free second day UPS shipping. This appeals to both the need for instant gratification (my packages often arrive the very next day) and the practical. If you make more than a handful of purchases a year this is well worth it. I go to Amazon first because I’ve already paid for the shipping. Brilliant.
Next we come to Apple’s genius around the iPod and iTunes. The iPod was coveted for it’s sleek design and usability, but it’s really iTunes that was the magic here. Providing a superior platform to download, organize and play music is what (in my opinion) drove iPod to the number one spot in the MP3 market. And then… wait for it… the business model feeds on itself – as people download more music, they need iPods with more capacity. Podcasts and videos made available via iTunes all drove the need for more capacity, driving more iPod sales. This one is not just brilliant – it’s pure genius.
So what then is the next brilliant marketing idea? Will we see one with the eBook readers? Amazon made an attempt with the Kindle. They had the e-reader market to themselves for a couple of years, and even attempted to get people hooked on the technology by taking a loss on Kindle book sales. Barnes and Noble entered the market this year with the Nook. Both are attempting to compete on feature/function with what I will call ‘near-proprietary’ platforms. Amazon and Barnes and Noble are approaching this as a book war. Tie the book sales to the technology and get them hooked; he who sells the most technology will ultimately sell the most books. But are they sacrificing the pawns too soon?
Enter the iPad. What’s different here? Let’s start with the fact that Apple is not in the bookselling business. They aren’t selling just another e-book reader. The jury is out, but I suspect that we are going to see a kick-ass business model that is all about the data. And like the iPod, more data drives the need for more capacity, which in turn drives the technology sales. Is this about selling books? I doubt if Steve Jobs thinks it is. It doesn’t matter where the content comes from – the more books and more data the better. And while Amazon and Barnes and Noble are fighting about who is going to win the electronic book reader war, I predict that the iPad is going to be all about data, and data integration (music, text, video…), and integrating data and applications. Gee, I’m almost talking myself into wanting one!
What do you think? Can Apple ratchet up their brilliant marketing yet another notch? What’s your top example of brilliant marketing, and will we see one with the iPad?