Reputation Management 101: Apple and the iPhone

As a marketer and digital brand strategist who's been immersed in the web now for more than fourteen years, I  firmly believe that reputation management, not digital marketing, is the number one issue that brands should be focusing on right now - above everything else including  e-commerce, innovation, site building, media buying etc.

Why?

Because success or failure for brands today comes not from what you do on the web, but from how you are perceived.

It's important to realize that this hasn't always been the case. This shift has only really happened in the last eighteen month.

Prior to the emergence of the "writable web", blogs, social networking, and the emergence of ajax programming,  the voice of the consumer was contained and controlled in chat rooms, message boards, and Usenet groups. 

On today's "social web", the voice of the consumer is found on almost every single page on the Internet.

The integration of the consumer's voice has become ubiquitous across the web due to the proliferation of user generated comments, digg-style thumbs up/thumbs down voting systems, five star ratings, etc.

A great case study in online reputation management came this week when Apple decided to cut the price of the iPhone by $200, with the markdown coming less then two months after the product was released. 

Almost immediately yesterday afternoon, those early adopters who purchased the iPhone prior to the price cut (as I did) were furious and made their anger heard on the web. And then today, less then 24 hours later, Apple responded to the negativity that the decision was causing and announced that those who purchased the iPhone would be receiving a $100 credit at the Apple store.

A lot has been written today on the web about how Apple reversed their decision.  But reading what has been said, I think a lot of what makes the action taken by Jobs today important for brands to learn from may be lost in the discussion.

For example, if you haven't yet read Steve Job's open letter today, you should. You can click on the graphic above to read it. 

The open letter was the same tactic that Jobs used to great success when he stated Apple's position on digital rights management a few months back.  The open letter approach proved to be a smart move and Jobs was savvy to repeat it again today. 

While I can't tell you 100% that Jobs wrote the letter himself, I can tell you that it reads 100% as if he did. I would be shocked if he didn't. I'm confident saying this because the letter "works" not only because of what is says, but by the way in which it is said. 

One thing I've learned being a digital marketer is that on the web, tonality is everything. 

And Jobs once again got the tonality right.

Lines like...

"iPhone is so far ahead of the competition, and now it will be affordable by even more customers. It benefits both Apple and every iPhone user to get as many new customers as possible in the iPhone 'tent'... Second, being in technology for 30+ years I can attest to the fact that the technology road is bumpy. There is always change and improvement, and there is always someone who bought a product before a particular cutoff date and misses the new price or the new operating system or the new whatever. This is life in the technology lane. If you always wait for the next price cut or to buy the new improved model, you'll never buy any technology product because there is always something better and less expensive on the horizon."

... could never have been written by a Corporate Communications department.  Lines like those are written by CEO's to their senior management via email.  And rarely are they shared with the public.

Because Jobs wrote an open letter as if he was writing to his team rather than issue a corporate press release, word-of-mouth on Apple's decision not only spread farther and faster today, but built up more-and-more good will as it spread.  A press release would never have done this as well and as fast.

Most of the people who heard about Apple's decision to give the credit today, are probably not aware that Apple never released a press release. Rather, Jobs simply posted an open letter on Apple.com.

The manner in which Job's handled the issue today is a great example of smart reputation management on the web.  This is the approach that more companies need to take. 

The other remarkable thing about today's announcement by Apple was how quickly it came.  Decisions by committees don't happen quickly. And they never happen overnight. Decisions by committee get bogged down in politics and by the time they are announced it's most often too late. By the time the company "officially" responds the opinion of the public has already been formed and hardened.

I can guarantee you that it was Jobs himself who immediately understood that the price cut was going to be an ongoing nightmare for Apple, not a lawyer or analyst or company director. I can envision Jobs simply walking down the hall into an analysts office at Apple and asking him or her to quickly calculate on the back of a napkin how much it would cost if Apple gave a $100 credit to every iPhone owner.  He got the number from the analyst and made the decision right there on the spot. Plain and simple.  He probably then went back to his office and wrote an open letter  as if he was writing to his staff. He then asked it to be published on the site and within an hour it was.  I honestly don't think it was more complicated than that.

In reality, based on how fast the decision came, it couldn't have been more complicated than that.   While what really happened may have been different, it most definitely wasn't more complicated.

The important thing Jobs understood is that today your reputation on the web has a direct effect on your share price.  And because of this, every public company and brand should take heed and follow the lead of not only what Apple did but how they did it.  The lesson is to not only act quickly and decisively, but to respond in a manner that is personable, honest, smart, and most of all, not rapped up in the trappings of corporate bullshit. 

The truth is that today most brands have absolutely no understanding on how to manage their online reputation.  The reality is that too many agencies are trying to sell their clients another multi-million dollar website rather than to truly help them succeed on the web. 

Not only did Jobs have the understanding that he needed to act quickly, he had structured a company that was prepared to act quickly.  The reality is that most companies aren't prepared to do this as efficiently as Apple does.

Again, reputations are built not only on what you do, but how you do it.