These three product strategies you can lift from Apple's playbook and incorporate into your growing business.
It's no surprise that Apple has kicked off 2012 with a bang. Profits are soaring, its stock price is up by more than 80%, and the new iPad has been touted as one of the company's most successful product launches in history, which is saying a lot considering the tech giant's recent history.
What has made product launches at Apple so successful, and what can you learn from them to benefit your own business? Here are three important lessons.
1. Price your products to customer segments.
Often lost in the anticipation of Apple's launch events are the subtle changes the company makes to its product portfolio. When Apple launched its most recent iPhone a year ago, it reduced the price of its 3G version to $99. During its most recent launch of the new iPad, it reduced the price of the iPad 2 by $100. In both cases, Apple established a market for additional customer segments.
This strategy allows Apple to capture high margins with early adopters and drive penetration among a broader, more price conscious audience at a later date. Not every company has product launches that allow it to adopt this strategy, but there are always opportunities to evolve and re-price a successful product to address the needs of a new and different customer segment.
2. Keep your eye to the future.
Success and growth elicit expectations. As Apple continues to launch innovative products, the expectations rise. Each Apple event seems to be met with more anticipation than the last, and technology pundits spend months leading up to the events with conjecture about Apple's "next big thing."
To its credit, Apple has never stopped innovating. iPad sales for Apple's fiscal first quarter increased 111% over the year-ago quarter, and the company still maintains 74% market share in tablets. Amazon, Blackberry, Samsung, and others have all launched tablets over the past year each with features that they believed provided an advantage over the Apple. But Apple's continuous innovation and forward focus have allowed it to stay ahead of competitors. There's a lesson there for any business that thinks it can ride the coattails of a single successful product for the long term.
3. Listen to your customers.
With the advent of social media, customers have a variety of avenues available to them to express their opinions on a particular company or product. But even if your company isn't a common topic of bloggers, there are more old-fashioned ways to listen to your customers. What's unique about Apple's two most recent product launches, the iPhone 4s and iPad, is the remarkably minor changes the company made to create an abundance of demand.
The new iPad, for example, is not all that dissimilar from the iPad 2. A new screen, 4G, faster processor, and better camera top the list of major developments, but there hasn't been a total redesign of the product. But the new iPad addresses some of the major concerns customers have expressed since the initial launch of the iPad in 2010. By directing product development to the voice of the consumer, Apple was able to benefit from the most successful tablet launch in its history. Listening to your customer is something a firm of any size can do.
There are few companies that compete with the size of Apple, and fewer still that have been as successful as Apple over its most recent stretch. But the formula that has defined Apple's success is not restricted to the economy's behemoths. The key tenants to Apple's growth can be applied to a business of any size.
KARL STARK AND BILL STEWART are managing directors and co-founders of Avondale, a strategic advisory firm focused on growing companies. Avondale, based in Chicago, is a high-growth company itself and is a two-time Inc. 500 honoree. @karlstark