I am largely executing a model similar to Apple and Tesla IBM. While IBM has evolved to always keep the customer at the center, Apple and Tesla are nuanced in that regard, just as IBM was in the past.
I worked at IBM when it was implicated in the early 1990s, so I think I can speak into the future of Apple and Tesla until they learn the easy way, until IBM learned the hard way : The customer is always king, and a lock is mined. -These customer base will almost always end badly to increase revenue and reduce costs.
The question is not when – that is, and how much the customer is willing to bear when calling “when”.
I will dig into this week, and then discontinue my new favorite smartwatch, the new Generation 5 smartwatch from Fossil. Apple Watch has a real competitor.
Customers are uniquely loyal to IBM’s mainframes, Apple’s iPhones and Tesla’s cars. In many ways, these three companies continue to pull from the same business model. Wrap the customer with services, provide a very differentiated platform, and make the level of customer care unique in the resource segment.
“Nobody lost their job in choosing IBM.” It was an employer for life, with incredibly strong benefits and pensions but weak salaries.
Working on a large-scale model created by Thomas Watson Jr., IBM was the key trusted partner and dominated the information technology industry. Its products were not the cheapest or highest performing ones, but the company provided the best customer service and earned the largest customer loyalty in its segment.
This strategy was under the influence of IBM’s Golden Swan, and it shut down its customers and competitive vendors. IBM leased its hardware instead of selling it. The result was a symbiotic relationship between IBM and its customers that made the company nearly impossible to beat, given the large scale economies of its time.
This level of power and uniqueness led to bad attitudes. IBM’s quality declined and its innovation dropped. With its market saturated, it began to rely on questionable service fees to fuel its price rise and its bottom and top lines. IBM thought it was selling off the air and customers could not move forward. Nearly customers disavowed that notion with vengeance.
IBM changed, and the brand went from being worth less than billions. The downfall of its big brand was called “negative brand equity”, which meant that one option, a customer would pay more for one white box (unbranded product) than one with the IBM brand.
The other day I was reminded of something that today’s IBM is mostly good and virtually none of the bad, but it is not massively effective. It is aggressively open source, it embraces interoperability, and the people in its mainframe (System Z) like customers a lot, like they used to before. Although IBM is also aggressive on pricing, it does not do customers for money, and it puts those IT customers at the center of the IBM world. In the IT space, IBM once again enjoys what is arguably the strongest IT advocacy in the segment.
The only thing he probably should do more of is to remind customers how well they have it so that the green-looking grass on the other side – which is not greener – doesn’t look greener either.
Apple and Tesla
Apple and Tesla are very similar to old IBM, except for employee-life.
Apple offers a level of customer care that no other smartphone company comes close to matching, through Apple Stores and in places such as the Best Buy store within a store. For Tesla, if you have a problem, it leaves a car loaner while taking your car (you don’t have to go to the dealer), and if you want, you have up to that lender car. There is also an option. To.
Tesla has software updates that make it fun for owners to discover new features so that, in particular, software updates can be anticipated rather than dreaded. Like IBM, Apple owns most of its technology stack (the closest thing in the market is the Microsoft Surface).
The firms are very proprietary; They do not interfere well. Tesla chargers do not work with other electric cars, and new DC direct chargers will not work on Tesla for example. In Apple’s favor, its watch only works with an iPhone, and is so badly partnered that large-scale efforts with its channels Cisco and IBM have failed.