The rumors turn out to be true. Apple is buying Beats for $3 billion, just slightly less money than originally suggested. Now that it's official, I'm confidently reiterating my conviction that Apple cannot be spending this unprecedented sum on Beats for either its headphones or its subscription music business. Because while the company may be worth that much, it's not worth that much to Apple, the world's most innovative consumer electronics and consumer software maker. Because choosing to buy Beats purely for its existing businesses and revenues would represent Apple significantly lowering its sights, aiming to graduate right from innovative leader of life-changing technology to kinda-cool company that makes stuff teenagers like. Not that selling to teenagers isn't a good thing; it can certainly bring in money, but it doesn't typically generate long-lasting brand relationships.
To be clear, if Apple is buying Beats purely for its headphones or music subscription business, then Apple is making a mistake. However, there are those of us who still believe that Apple hasn't thrown in the towel. And why would it? There are still many consumer markets to dominate — entire markets like wearables and home automation tech and even in-car experiences, all of which are in their infancy — and Apple still has the smarts, the brand, and certainly the money to make a run for any of those things, if not all of them. So why would Apple instead sign up to become a holding company for fashionable but not life-changing brands?
If you have children or are involved with children, you know that just as soon as you’ve figured out how to engage with that cute little baby in the right way, everything changes. Before you turn around, that baby you knew is starting school, graduating from college, and moving on to a career of her own. And as the baby grows and changes, your approach to engage with her on her terms must change too. If you’ve ever tried to talk to a teenager in the same way that you speak to a 10 year old, you know exactly what I mean.
While we understand and instinctively know how to change our approach as children grow up, we don’t often think of our buyers growing up. But, in the post-digital age, they are growing up and changing frequently. And as marketers, you must adapt and change your approach along with them.
And that’s where my new report, “Rethink Marketing In The Customer’s Context” (subscription required) can help. Expanding on a report published on February 21, 2013, my new report provides a framework for business-to-business (B2B) marketers to recast their approach with the full customer lifecycle in mind.
Start now to update your approach and:
Put the customer at the center of marketing thinking. Today’s market realities demand that B2B CMOs replace internal sales-driven marketing funnels with a full customer-life-cycle approach that aligns with the ways customers now make purchase decisions and build relationships with their vendors.
A media frenzy arose last night when the Financial Times suggested it had word from the inside that Apple is closing in on buying Beats Electronics for $3.2 billion. The immediate response from all quarters has been puzzlement and on multiple levels. As the sun rose today, so did the doubts about the impending deal. Generally, large strategic acquisitions — like when Google bought Nest for a similar figure — can be justified on the basis of buying something you don’t already have: a promising new technology, a large customer base, or entrée into a desirable industry. None of these things apply to this acquisition by Apple. Acquisitions at a more mature business stage can typically be justified purely on a revenue or margin basis or the desire to snap up a brand with more energy. Those don’t apply here, either. Even those who have tried to stretch the argument a bit have suggested that Apple could be buying Beats purely for a quick road into the music streaming business as a hedge against Spotify — except that Apple owns the music industry and doesn’t need Beats to build the music streaming offering that the company has denied for years that it should even consider getting into.
The chief marketing officer’s (CMO’s) role is shifting from a two-dimensional world of outbound marketing communications vehicles to a multidimensional world that encompasses every interaction a customer has with a brand. These CMOs must not only craft the perfect marketing communications message but also ensure that their customers’ experience is consistent with the brand promise.
Why does this matter? Because Forrester’s TRUE brand compass research shows that having a consistent experience across all brand touchpoints is a key driver of brand trust. For example, consumers tell us that both Microsoft and Amazon.com deliver a consistent experience every time they interact with those brands. This helps both brands secure high levels of brand trust, which in turn drives strong brand resonance.
To build a trusted brand, marketing leaders must ensure that brand messages sync with achievable expectations to deliver the brand promise. Many airlines now routinely offer a swift response to customers’ on-the-go travel needs via Twitter; this real-time travel support serves to enhance the brand experience. Delta sees the opportunity; the airline is investing more than $3 billion to enhance the customer experience in the air, on the ground and online.
April 22, 2014, was not just a regular Earth Day. It was also the 50th anniversary of the 1964 World’s Fair, one of the most amazing wonders of the world for its time. The 1964 World’s Fair, along with the famous Isaac Asimov, set people’s imagination on fire with a glimpse of the future of technology and a series of predictions of what our life would be like in 2014. And as we reflect back to what the fair and Isaac prophesized about life 50 years into the future (or exactly where we are today in 2014), it’s uncanny how much of what was showcased and predicted are now a part of our everyday life. From satellite phones to multimedia communication, interactive 3D TV, and driverless cars, our world has definitely changed. But sadly, the infrastructure that supported it all, the fairgrounds themselves complete with the iconic 140-foot-tall unisphere, has remained stuck in the past, a relic of that historic point in 1964. And for marketers, this tale provides an important lesson to learn.