AAPL Apple sales shrink

What is wrong with Apple (AAPL)?

AAPL-stock-chart
AAPL dropped 7%

It still turned a huge profit (one that most brands would tout as a great quarter) but most investors are worried that the Apple magic is gone as AAPL was down 7% in after-hour trading. iPhone sales did not grow for the first time ever and Apple’s sales declined for the first time since 2003.

Pundits talk about Apple’s lack of innovation in its product portfolio. Nothing has REALLY been new since the Apple Watch if you discount brand extensions of different sized iPhones and iPads.

Even music sales have moved beyond Apple’s iTunes store as more and more music consumers subscribe to streaming services and no longer buy music. What was at one time a disruptive technology, iTunes now seems like yesterday’s news.

But the REAL problem is an emotional issue. It is a brand problem.

Apple. The world’s most powerful brand (Ticker symbol AAPL) does not look so indomitable as it once did. It looks, well, vulnerable.

What is missing? Magic masqueraded as vision. Steve Jobs is missing.

I own AAPL and virtually every Apple product

 As an Apple guy since I bought my first Mac in 1984, I have never owned a PC. My first smartphone was an iPhone and my first tablet was an iPad. I have upgraded all of my purchases along the way and own an iPad Air, iPad Pro, iPhone 6, MacBook Air, Apple TV (new generation) and AirPort routers. Even our office server is a Mac.

AAPL and CEO Tim Cook
Tim Cook

AAPL Apple LogoIf you look at my stock portfolio, I own a nice chunk of AAPL. I bought most of my AAPL stock before the iPhone launch and have enjoyed both growth and more recently dividends from the company. But my personal identification has suffered. I don’t have the personal connection with the Apple brand I once knew. I even occasionally miss the Keynote announcements that were once marked in my weekly planner.

I used to think
of Apple in personal terms. I thought of Apple in terms of Steve, the mad genius behind the curtain. I waited with baited breath for the next insanely great product that all came in rapid succession since the introduction of the first iMacs.

AAPL and designer Ive
Jonathan Ive

I like Tim Cook. I think he is an amazingly competent CEO. I admire Jonathan Ive, who is more than just a gifted designer. I still love the products. But it is harder to have that deep of an emotional connection to the company.

Like most of you, I felt I had a relationship with Steve. I recognize that it was a complete fabrication of intimacy, but those of us who buy emotionally into brand loyalty rarely self examine the core reasons why we care so deeply. We care and that is enough in itself.

Apple could come out with a reinvention of the automobile. It could reinvent the television. It could reinvent the Steve Jobs and the iPhone grew AAPLkitchen for that matter and it would not replace the loss of connection I felt with the brand itself.

Apple will continue to be a powerful brand and will continue to innovate and make money. AAPL will rebound from its current drop and take its place in the world of Blue Chip stocks. But, make no mistake, the BRAND (as an emotional religion) is in decline.

I may appreciate BMW and IBM but I do not LOVE them. That died with Steve Jobs. I held onto the scraps of that affection for a long time. But I no longer think it blasphemy to buy a competitor’s product. Suddenly, I am looking at product benefits and attributes and the blind affection that arose from the elevation of the brand to mythical proportions is sadly gone.

Backing Kickstarter projects

It’s time we talked about Kickstarter.

Let me be frank. When I first learned about the site years ago, my cynicism went wild. At the time, I was irked by already successful film directors seeking funds for projects or an already professional band looking for $30,000 to record a new album. It all felt a tad bogus to me and not supporting those that Kickstarter was intended to back.

Then something changed.

I visited the site again a few years later and took the time to read up on a whole bunch of projects. My intrigue grew.

For those unaware of what Kickstarter is, it’s a website that accepts and promotes crowd-funded projects. Participants wishing to have their projects funded select a certain time frame to promote, choose an amount of money they wish to raise, and do a little bit of self-promotion (advertisements, project details, etc.). Should enough sponsors back a project in that pre-selected time period, the participant gets the funds. Once funded, particular obligations must be fulfilled for sponsors.

Coming around on Kickstarter.
Coming around on Kickstarter.

Dollars speak loudly on Kickstarter, as they represent the interest of the community. For example, about a month back, I wrote on the Pebble watch, which initially launched on Kickstarter. Just last week, the folks at Pebble announced its new watch, the Pebble Time (a colorized smartwatch that functions on a timeline-centric operating system), on Kickstarter. Since the proposal, Pebble has garnered $11 million. And there is still 25 days to go in the campaign. So far, this is the most backed project ever on the site.

I also wrote on the Neil Young-crafted Pono high-definition music player. This device also earned millions during the fundraising campaign – far exceeding expectations.

Perhaps my change of heart happened because I’ve become a fan of the TV show Shark Tank. On the show, five investors, or “the Sharks” as they’re called, listen to inventors and consider whether or not to assist in the funding of the project. The show is addictive. I’ve become quite fond of start-ups and observe the genesis of brands and the plethora of exceptional ideas around us.

Kickstarter allows for that as well. Now, I’m no longer a skeptic, but rather a backer of multiple projects that I believe in. I’m a mini-shark, and I love that.

Branding Investment Services – TD Ameritrade Wins!

Branding Investment Services means Trouble On Wall Street

By Tom Dougherty

branding investment services TD AmeritradeInvestment companies and brokerage houses are ripe for the picking and TD Ameritrade is looking more and more like the grim reaper. It is easy to look at a market caught up in its own outdated business models where Merrell Lynch, Bear Sterns, A.G. Edwards, and the other old school financial services companies desperately hold onto their top-heavy fee structure while leaner competitors like Fidelity, T. Rowe Price and Schwab re-write the rule books.

As the market migrates towards these discount brokerages, the majority of the players are missing the REAL sea change threatening to wash over them like a tsunami.

Investment Services Category Failure

The entire category believes that the customer will choose based on price comparisons and as a result, they are marketing their companies as the “low cost” provider or they spend ad dollars demonstrating the “added value” that they deliver…a superior service that justifies higher prices, higher commissions and hard to justify commission schedules. In the knowledge age that has swept over their customers in the past 15 years, information is hard to hide.

hero-pricing branding investment services TD AmeritradeThe airline industry is experiencing just such a conundrum as passengers are able to see… right on their very own computer monitor, a plethora of choices and the arbitrage that seems to benefit everyone but the passenger themselves.

branding investment services TD Ameritrade logo markIn the world of investment services and brokerages…”a trade is a trade” and customers are finding it harder and harder to justify anything more than a small flat fee. What is wrong with this picture and why is TD Ameritrade poised to begin eating everyone’s lunch? The answer is quite simple. It can be found in the brand promise not in the details of their pricing.

The Fatal Error when Branding Investment Services

Everyone, with just the one out exception talks about themselves in their brand messages. It promises the customer that they have the expertise to guide them, that they have all the services they need and that they are fairly priced. Just a few short years ago, TD Waterhouse (before its merger with Ameritrade) was promising much the same.  This campaign with Sam Waterston built the brand position.

 

The NEW TD Ameritrade has awakened and has seized the high ground in the battle for the investment category market share. They still mention the amenities that are very much “table stakes” within the category but they surround these messages in the visage of the customer themselves.

 

They answer the brand question of “Who am I when I use TD Ameritrade?” Instead of harping on all of their non-differentiating amenities and services, they lay claim to the very heart and soul of the investor themselves…The INDEPENDENT investor and his fast track to

“SUCCESS”

TD Ameritrade Has The High Ground

Old-TD-Waterhouse that built the brandBy identifying the customer as the primary differentiator, all of the services and amenities take on new importance. They resonate with greater clarity because they have a raison d’etre. Good news for TD Ameritrade, bad news for the rest of the category.

Branding to grow market share demands that you out smart your competitors and position yourself around the hopes and dreams of those you wish to influence. TD Ameritrade is off to a blazing head start… and they might just have the best playing field as well. (Read a detailed market study on the financial category here)

Tom Dougherty invited back as Speaker – Stealing Share

Stealing Share invited back as featured banking speaker

featured banking speaker
Tom Dougherty

Stealing Share CEO and Senior Strategist, Tom Dougherty, is invited to be a featured speaker at the National Financial Symposium once again.

After a strong reception at last year’s Chicago gathering, Stealing Share was invited to address the three day symposium in Palm Desert California and asked to speak on the relationship between banking brands and the retail message.

Hyatt Grand Champions Resort & Spa Indian Wells, CA POSITIONING BRAND TO STEAL MARKET SHARE This session presents an innovative brand perspective that targets both the precepts of the customer and the positioning of brand within the financial market space. Using the brand as a prime reference, the audience will be educated and directed toward branding that steals valuable, coveted market share from the competition.

More about Tom Dougherty as a featured speaker here

 

The Battle for market share in the Mutual Fund Industry

Mutual Fund Market Study

By Tom Dougherty

Mutual fund market study chart of the current categoryThe mutual fund industry markets itself by the investment philosophy that it is unnecessary to observe the market by brand name. To make matters worse, funds have tried to differentiate (brand) themselves by using independent rating systems like Morningstar. This is akin to differentiating your brand of beer by saying that it is “liquid and sells for XYZ price.”

no mutual fund market study would be complete without considering morningstarDuring the huge run-up to mutual fund investing in the 1990’s, this model seemed effective. The market was running great guns, and everyone’s Morningstar rating showed double digit growth. Some investment experts were actually encouraging investors to compare Morningstar ratings and “trade” funds on an annual basis. 2014Lipper_Awards_logo_368x235As a result of basing the brand value on performance, the market from the inside-out shows that the only choice for the investor is for portfolio diversification between growth and value or domestic and international. Lipper was no better. In each case preference was going to be built around past performance and this led many funds to experience drift. However, the only reason to have a brand is to create margins or increase preference.

Mutual Funds.002In a mutual fund market study, it is clear to see that if your product or service is being purchased as a result of performance, you have no brand and no connection with the customer. No one noticed the dangerously rising tides during the exuberance of the 90s — and eventually found themselves without any brand equity. The result of this lack of security and protection: the flight of investor assets.

If we look at the market from the outside-in (from the perspective of the investor) it is possible to see the market in very different terms. But mutual fund families must begin to position the family of funds and not the individual instruments.

Mutual fund market study chart showing opportunity
Position your fund around the emotional connections of the target audience

In other words, the brand should reflect the brandface of the segmented target market. One possible way to see the market is from the perspective of investor lifestyle. This perspective shows great opportunity for fund families to define their brand in a way that resonates with investors. It works in two ways. First, it tells the target audience who the family of funds is for, and secondly, it satisfies the need to “make it easy for me.” No brand of mutual fund, with the possible exception of the socially conscious funds, has done this sort of brand segmentation.

 CEO Tom Dougherty was featured in the Denver Post as an expert on mutual funds

How Financial Services can win in a recession

Read a market study on banking