Systems Thinking

Apple’s Antenna-gate: Tomorrow’s Innovation with Yesterday’s Customer Service

Tripp Babbitt
Contributor: Tripp Babbitt
Posted: 07/19/2010

Oh my . . . Steven Jobs and Apple! The king of hype and marketing is now learning a hard lesson that many service organizations have yet to learn. A customer focus matters and the less sensitive you are to the customer . . . the more it will cost you.

The PR damage is the result of not listening to the customer, not from inappropriate spin. Denial has only exacerbated the problem with the iPhone 4.

"I think it's important to understand the [true] scope of the problem, because the data [we have] lead you to the conclusion that it's been blown so out of proportion, it's incredible," Steve Jobs said.

OK, so let’s look at these data that are out amongst the public. Three million plus users of the iPhone 4, and only 0.55 percent of users had called in with a complaint about the reception or antenna according to data from AppleCare. The number of complaints, 15,000 +, seems low and a plausible spin that the problem has been blown out of proportion.

However, here is what we don’t know:

  • What is the timeframe of these data? Is that 15,000 total calls or 15,000 per week, month, etc.?
  • What are the categories for antenna or reception problems? With most contact centers categories are confusing and many workers may categorize a complaint as miscellaneous or maybe a general category like "complaint."
  • Most importantly, how many failure demand (demand caused by a failure to do something or do something right for a customer) phone calls were they running and how many are they running now. The use of a control chart can only tell us whether this is a statistical significant event.

Regardless, using a percentage of iPhone purchasers (0.55 percent) is a spin and no service organization is going to get 100 percent or even 50 percent phone calls. Executives have to be familiar with not only the data, but what the phone calls are. Data can be misleading unless you dig in.

A majority of customers hate to call in and complain—it is a tremendous inconvenience. Any predictable failure demand calls need to be resolved because they become expensive to the company. Apple has to be feeling it, and the loss is not just Steven Jobs having to come back from his vacation in Hawaii. The phone calls are waste, having to provide free cases/bumpers (or icondoms as they are jokingly referred) is waste, loss in sales and reputation is waste, and the price of this debacle keeps rising.

Apple has long focused on being one of the most innovative companies and has done well creating an aura of invincibility, but like Toyota they need to get in touch with the service side of the business. Here are some things that Apple should do:

  1. Understand that customers see things end-to-end from their perspective (systems thinking). What matters to customers can vary, but can be well understood at each point of transaction. Apple stores, contact centers and front-line workers have a better view of customer purpose (what matters to customers).
  2. Assimilate customer measures from customer purpose. Customers don’t care about internal measures (like financials) or by function; they like measures that reflect that the product and/or service is good. Failure demand is a piece of this puzzle; however, there are many other measures that can provide transparency to service. The best way is get these is the insightful study of customer demand.
  3. Once customer purpose and measures are established, experiment with method, which will lead to customer service innovation.

The management paradox of better service is reduced costs and greater revenue. Great service always leads to increased profit and even less marketing expense to convince us that their service is good. When it is good, customers will market for you.

Apple has done a lot of out of the box thinking to create exciting products for consumers to use and we are lucky recipients of these goods. We all would just like them to take the lead in innovation around the end-to-end service rather than be so . . . yesterday.

Tripp Babbitt
Contributor: Tripp Babbitt
Posted: 07/19/2010

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