September 6, 2007

Listen and React

I was reading Seth Godin's blog today and this link to Apple was highlighted. I have been a hard core PC user my entire life. But the more I see of Apple (and that you can now run Windows on a Mac) I'm convinced that being associated with Apple is a good thing in almost every way.

Listening to your customers when they are going to spend more money is easy. Listening to them when they are unhappy and want something for free is much harder. Apple and Steve Jobs illustrate perfectly why listening to your customers is beneficial. Happy customers buy more stuff, so if you have to spend $100 to make $200 it's probably a good idea. My guess is that most of recipients of the gift card will spend more than $100 dollars. And if the iPhone can be sold for $399 versus $599 it means that the $599 price was probably big time margin. Apple is playing a great revenue game. You can sell fewer phones for higher margin or more phones for lower margin. The initial iPhone selling was way higher than the forecast by Apple, so you can bet that sacrificing some margin for volume is a good gamble (not including the pending holiday season).
And since the mass majority of people will spend more than $100 when they redeem it is just more revenue for Apple...genius move!

Additionally Apple has said that if you purchased the iPhone within the last 14 days they will refund you the difference.

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