There is such a thing as being too successful. Tiger Woods learned this the hard way; he went from hero to goat overnight. Now Apple Inc. may be heading for the same kind of “learning experience.” Because Apple, like Tiger Woods, seems determined to demonstrate the truth of number 18 of Ries and Trout’s 22 Immutable Laws of Marketing: “Success often leads to arrogance, and arrogance to failure.”

Tiger Woods’ status as the world’s highest-paid professional athlete, youngest player to achieve a Grand Slam, and winner of 16 World Golf Championships was not enough to overcome the arrogance revealed by the Escalade incident in front of his home.

For Apple, the reputation launched by the legendary Macintosh 1984 TV commercial may not be enough to overcome their current “we know what’s best for you” attitude. In 1984, Apple saved the drones from Big Brother. But now, it seems, we are the drones who must conform to the Gospel of Apple.

Love can turn to hate

Customers love user-friendly Apple products. (They should – they’re wonderful.) And they love the friendly Apple marketing – the engaging TV commercial dialogue between PC and Mac, the features and benefits made fun in the iPhone commercials. But in the long term – 5 or 10 years – they may fall out of love with Apple, the unfriendly company:
•    Apple is obsessively secretive, in a business that values openness more and more.  The New York Times says: “As an organization, Apple is more disciplined in managing message than even the Obama campaign, with a culture — some would say cult — of corporate omertà.”
•    Apple is the chest-beating 800-lb. gorilla in so many categories.  Gizmodo states: “It’s Apple that conquered music. Apple that revolutionized mobile phones. Apple that might make tablet computing mainstream.“
•    Apple banned Pulitzer Prize winning satirist Mark Fiore from iPhone apps.
•    Apple is refusing to support broadly-used Adobe Flash on iPhone.
•    Apple pulled out of MacWorld in favor of its own tightly controlled events.
•    Apple sues journalists who allegedly leak information.
•    Apple product are expensive. Yes, innovative user-friendliness is valuable. But is it that much more valuable?

For now, the dissension from the Gospel of Apple is mainly among the technorati. But these things have a way of spreading from the insiders to the outsiders – a recent article in Newsweek talks about “Fortress Apple.” Think Star Wars Death Star  with Steve Jobs as you-know-who.

Apple may find itself with a credibility gap that great products and great marketing just can’t bridge. Sometimes customers’ perceptions of you are as important as the product benefits you actually deliver. Arrogance can erode customer loyalty, when what you say and show in marketing communications doesn’t match up with (more or less) what you actually do in the real world. Apple may end up being its own worst enemy – in the words of the old comic strip Pogo: “We have met the enemy, and he is us.”

This is a marketing tale that happens to be true. Once upon a time, the customers of a cable company, a bank and a utility were satisfied, sure that the companies valued their business. But then they started seeing headlines like these:
•    “Cable Internet Just $19.99 A Month – New Customers Only”
•    “$1000 Off Your Closing Costs – New Customers Only”
•    “Reduce Home Heating Costs – New Customers Only”

It’s as if these marketers were giving all the goodies to the greedy, ugly stepsisters who never bought anything, and leaving valuable, faithful Cinderella to sit in the ashes.

Here are a couple of real life examples – a cable company and a utility. And here is a UK marketer who recognized the problem and used it as the basis for a TV campaign.

Why isn’t there a lot more debate in the marketing community about this questionable practice? It contradicts everything we’re supposed to know about the value of new vs. current customers, and the relative cost of marketing to them.

The not-so-charming princes here are mainly consumer service providers such as cable TV and satellite TV companies, telecoms, ISPs, financial services companies and utilities.  As service providers they have the advantage of being able to distinguish between new and current customers.

Richer customer offers are not the problem. The real problem that they’re out there in mass media where current customers are sure to see them and wonder why they can’t get in on the goodies. But consumer services marketers need to attract a stream of new customers. How can they do it without risking that a dissatisfied Cinderella will find a Prince Charming – another cable company, bank or utility?

It’s not so difficult. Business to business marketers have been advertising richer offers to prospects for years without antagonizing their current customers. The difference: They don’t use mass media to flaunt their rich offers in the faces of current customers. Instead they use direct marketing to target best prospects, one on one.

Of course, this brings up another risk: Will direct marketing to an enormous consumer audience pay out, vs. the cost of the mass media they’re using now? We can’t know the answer to that, but we welcome comments that will bring this marketing tale to a happy ending for everyone.

Low priced products and services have a hard time competing for genuine customer loyalty. As soon as someone comes along with a lower price, the customer is gone. At least, that’s what we marketers have always been told is true.

But it’s not necessarily so, especially when the lower priced brand offers relevant, intangible differentiation that the higher priced brand can’t or won’t match.

Fish musicians vs. flight attendant rap

For example, see how differently two competing marketers differentiate themselves.

First, see one of the most creative airline commercials ever:

Then compare it what passengers actually experienced on the competing airline:

We’ve all read about what makes Southwest Airlines so successful: Hedge buying of fuel to keep costs down, flying nothing but 737s to assure efficiency, no hidden fees and so forth.

The loyalty builder (at any price): Customer experience

All these make them the low price leader. But what makes them the added value leader is something that costs little or nothing: The customer’s emotional experience, as delivered by their employees.

This is not to say that there’s anything wrong with the United Airlines customer experience. Nor is this an argument for or against creative TV commercials or rapping flight attendants.

It’s just what truly differentiates United Airlines seems to appear only in their advertising. But Southwest’s differentiation – its relevant but intangible customer benefit of employee attitude – is part of the actual customer experience. It’s responsible for Southwest’s perennial leadership in ACSI I(American Customer Satisfaction Index) scores for airlines, and for customer engagement five times that of United Airlines, in a Gallup study.

That’s how the low price leader can beat the competition at building customer loyalty.