What’s the Price Tag on Customer Goodwill?

keep cruising

What’s the Price Tag on Customer Goodwill?

A couple of weeks ago, I wrote about how Apple’s ongoing battery life fiasco—and the subsequent cover-up—was essentially a failure of leadership. I’ve been encouraged by the volume of feedback I received, and I’ve noticed that virtually nobody seems to disagree with me. Maybe that has something to do with me, but ultimately, I think it just shows that Apple really doesn’t have a leg to stand on with any of this—they breached customer trust in a way that’s completely indefensible.

But if it was a failure of leadership, I think you could also call it a failure of perspective. Based on Apple’s response to the problem—the fact that they embroiled themselves in sustained controversy over a measly battery, when they have countless billions of dollars from innovation and sales—suggests to me that, for them, it was always an issue of dollars and cents. (As one of my commenters notes, it’s as if the accountants are running the company.)

But the issue was never about dollars. Ultimately, it’s about goodwill. Historically, Apple has done an excellent job of managing goodwill; when the company was floundering, goodwill was the one thing that kept them afloat. But now they’ve squandered much of it over what is, in the grand scheme, a meaningless amount.

And yet, in today’s world, I think managing goodwill is more important than ever, precisely because everyone is so interconnected. You can’t hide things from anyone. You can’t expect that a customer service screw-up isn’t going to snowball into a full-blown crisis. At any moment, your mistakes could go viral—and that’s when it’s imperative that you have some goodwill to draw from.

Goodwill is no longer a matter of public relations—controlling the public face of your brand. Today, it’s more a matter of community relations ¬the global community that is¬, which requires you to fess up to mistakes and make them right for your customers. Or, at the very least, not to obfuscate or try to cover things up, which is what Apple did.

The upshot of this community mentality is that, for brands that are willing to be transparent, there are more opportunities for forgiveness than ever before. But again, it’s on you how forgiving your community is ultimately going to be.

As a side note, I think it’s worth noting that all of this has happened concurrently with Apple’s iPhone X sales failure. (Well, maybe failure is too strong a word—but the product has certainly fallen short of projected sales goals.) In my mind, the reason the iPhone X failed is that its look wasn’t aesthetically bold enough, not sufficiently different enough from past iPhones. It’s a high-ticket luxury item that nobody’s going to notice because it looks so similar to, well, the iPhone—so what’s the point of the thing? Apple played it safe and conservative—managing the product, not leading it.

But to return to the topic of goodwill, it’s important for companies to realize—and tech companies, in particular—that the goodwill of your community will often be the only thing that keeps customers on board. Tech has been democratized, and consumers have plenty of options for the products they choose to buy. They’re not tethered to your particular ecosystem, and they’re not locked into your products. They choose your products largely because of the goodwill they have toward your company—but when the goodwill evaporates, the customers can scurry.

The lesson in all of this is that no matter who you are—whether you’re at the world’s largest computer company or a tiny, bootstrapped startup—your relationship within your community is the most precious resource you have. That’s the perspective Apple has lost.