Making a Profit During the Recession: What Apple Has Taught Us

Reports are all over the internet telling of Apple's miraculous 15% increase in profits for their third quarter. While everyone else is pinching pennies, tightening belts, and holding the line in hopes of riding out the recession and staying in business, Apple increased revenue in every region including the US and Europe for both its laptop and iPhone sales.¹

So what did they do that made the difference? Apple's marketing strategy included two significant initiatives: a cut in laptop prices and the introduction of new technology for their popular iPhone. As we've stated in the past, cutting prices isn't always a good solution and can in fact have the adverse effect of devaluing your product or service if it is not done carefully. But what is compelling about Apple's approach is the product they chose to lower the price on: the laptop versus the desktop. Apple appears to have recognized that their strongest audience right now is mobile users. Laptops and iPhones appeal to this segment of Apple's market and the products are related, allowing one to synch with the other for exchanging information between the two devices. The iPhone is a big seller so introducing the new technology for this product makes sense, compelling excited mobile users to buy it new or upgrade to it. Reducing the cost of laptops actually serves to justify the cost of both products to mobile users: "I'm saving money on the laptop so I can get the phone too." It is a "you can't have one without the other" mindset that Apple appears to be capitalizing on.

How Industrial Businesses Can Apply What Apple Has Done

1. Identify Your Strongest Target Audience Right Now (not of all time but at this moment)
2. Identify the Product/Service Your Target Audience is Spending Money On: Look hard; if they are not buying from you, who are they buying from and what? Remember, if they are still in business they are still buying supplies!
3. If Introducing a Completely New Technology is Out of the Question, Upgrade the Product/Service in Some Way that Offers Customers More Value.
4. Identify Related Products They Are Spending Money On Now or Have Spent Money On in the Recent Past.
5. Carefully Reduce the cost of a Product that is Directly Related to the New Technology or Newly Enhanced Product/Service and Generate Interest in Both through Strategically Planned Collateral Marketing Campaigns.
6. Whether Apple is doing this or not, I can't say, but you may also want to offer creative payment plans that do not jeopardize your cash flow requirements yet make it easy for customers to buy from you.

Holding the line during the recession is like floating to shore in a lifeboat. If you actually use the paddles to row you increase your chances of getting there! Excite your attentive, active audience with a new technology or enhanced product/service. Make it easier for them to justify new purchases or upgrades by strategically lowering prices and effectively managing the perception of value offered.

¹ Mintz, Jessica: (July 21, 2009) Apple 3Q Beats Forecasts Despite Recession: http://www.wesh.com/technology/20133332/detail.html

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