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Why I Buy Apple Computers and What Boeing Could Learn

Dan Morris - 09/20/2010

Some suggest that a PC is a PC is a PC and Mac’s are PCs so - aren’t they basically the same?  No, they are not.  IMHO the most significant difference between Apple and any Microsoft based PC is that Apple controls their universe, meaning they are the designers, manufacturers, warrantors, and in my case, the retailer.  Controlling their innovation, supply, and retail channels allows Apple to provide superior products and superior experiences.

In July, I upgraded my home iMac to a newer (and of course faster, sexier, wider, and larger capacity {I am convinced that there is marketing to males here but I will allow my colleague Michelle Golden to work out the details}) 27 inch version.  For some reason a fan tick noise started a week or so ago, nothing really terrible, but slightly annoying so today I made an appointment at my local Apple Genius Bar (great branding here too) and at 3:15 today I went to my appointment, iMac in original box, and in hand (same day appointment) and after explaining the issue to my technician - he understood my issue and he asked if he could take my machine to the back where it was quiet to listen.  At that point I remembered having recorded the sound on my iPhone (I am loyal to Apple) and he plugged in headphones to listen and concluded that the noise was present.  He still took it to the back to confirm.

Less then five minutes later he returned and explained that in fact, a CPU fan had a noise and needed adjusting.  On this particular iMac model that means removing most of the main components and asked if I would be happy with a swap for a new, in the box, slightly faster (note - I won’t notice the additional 50 MHZ of CPU speed) iMac.  And, since I have an Apple Time Machine and was already fully backed up at home and Apple will destroy my hard disc data - I said “certainly, that will be fine”.  Ten minutes later I was walking out the door, new iMac in hand.  No issues requiring “management” approval, no hassles, no asking me to wait 2 weeks while they ship it to some out of area repair facility.  What Apple accomplished was to quickly (less then 30 minutes complete time) to diagnose an issue, resolve it to my satisfaction and remind me why Buying Apple is a smart thing.

After my commute home, I am now witnessing the restoration from my Time Capsule backup.  I still have 4 hours remaining as my new machine is restored.  If I compare this experience with all of my previous ones with Dell (or Dell’s equivalent) where even if I have same day or next day technician, I would never receive a replacement machine and be back up and running within such a short time as with Apple.

Microsoft essentially provides software and PC manufacturers build hardware.  Together they have forged successful alliances and business units.  Excellent cost efficiencies, choices, selections, and options.  But when there is a problem, the Microsoft Model requires multiple contacts that leads to slow response and solution times. 

Business models are all about choices like the ones Apple makes and the ones that Microsoft makes.  Boeing, another Seattle based (ok, I know they moved their HQ to Chicago in the dark of night to make their CEO happy, but lets accept where Boeing is really based - or should be based) business that has a model like Microsoft (the component model).  Boeing use to have much more of an Apple model where they controlled most of the overall design, manufacturing, and service for their customers (Boeing use to make engines and ran an airline - but our Government forced Boeing to split up and those divisions became United Airlines and Pratt & Whitney - so much for our Government’s wisdom in all things business - but that will be covered in other posts).  Boeing is facing extensive delivery, engineering, and customer service delays in large part because of issues with suppliers and their outsourcing. 

Outsourcing, and contract manufacturing removes inventory and significant fixed costs from a balance sheet for companies like Boeing.  These business model choices also are less controlled by the principal business (Boeing in this case) and customers don’t care about the “why” of the issue they care about the “solution” to their problem.  In my case, my problem was a noisy CPU fan.  In Boeing’s case it is airlines that don’t have planes they predicted and lost revenues that will never be recovered.  An airline invests significant funds into their selection of Airplane Models and I won’t be surprised if today’s Boeing customers sometime in the future switch to Airbus (although they have their issues as well) unless Boeing learns from Apple and returns to a vertically integrated business model where control provides for speedy solutions that benefit customers.

Apple is more expensive, at times at least, then comparable power PCs.  But when I have a problem, I know where to go and they know how to fix it.

If your business model is more like Boeing’s and Microsoft’s - you might want to revisit your choices and think like Apple. 

Lawyers Adopting the Ostrich Pose?

Ron Baker - 09/19/2010

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The Firm of the Future: Kentucky Society of CPAs

Ron Baker - 09/18/2010

I’m excited about the two-day program for the Kentucky Society of CPAs on October 20-21, 2010.

We are going to dive deep into the new business model for Professional Knowledge Firms—from hours to intellectual capital; efficiency to effectiveness; and hourly billing to Value Pricing.

The attendees will receive a flash drive full of resources, checklists, sample forms, and material from my forthcoming book, Implementing Value Pricing: A Radical Business Model for Professionals Firms (due out December 8th from John Wiley & Sons, Inc.).

For more information on the Kentucky program, download a pdf of the Agenda.

If you have any questions about the program feel free to email me at .

Fedex on Efficiency

Ed Kless - 09/12/2010

Just saw this commercial while watching some football (American, that is), and I had to share.

This will be hitting to power rotation at some of my future presentations.


Pricing Funny For the Day

Ed Kless - 09/10/2010

Decoy Effect Pricing Example

Ed Kless - 09/03/2010

Sage Business Partner Wayne Schulz of Schulz Consulting posted this great example of using the decoy effect in pricing options from the New York Post on my Facebook page. This is similar to the example Dan Ariely used in his TEDtalk about the Economist. However, in that case, the publisher seemed to believe they had made a mistake and pulled the ad when Ariely questioned them on it.

In this case, I think the Post knows exactly what they are doing. In addition to the dominated option (4 weeks for $9.18), they have also included two anchor products -  $2 for a single issue and $5 for a back issue.

Adding the .18 to the dominated option also gives it an air of precision and simultaneously draws your attention to it. I originally thought this was a bad idea and I wrote Wayne telling him that. I have changed my mind, I think it is brilliant.

I also find it intriguing that they do not list the price per issue of each of the options. Most subscription pricing options provide this. I think not providing it is the smarter idea.

The lesson for professional firms is that you can use the dominated option to influence customers to a higher or lower level (see the decoy effect), but only if you provide options in your proposal. A range of hours from low to high for the same result is not options pricing. In fact, if anything, it is confusing to the customer.

Imagine if instead of a price on an item in a supermarket, they just gave us a range. A loaf of bread would be listed as between $2 - $4. Once you got home from the store (I originally was going to write ‘got to the cashier,’ but that is not accurate), they would send you a final bill indicating that you paid $3.75 for loaf. It sounds crazy, but this is exactly what professionals do when they provide a prospect with a range of hours proposal. It is, in effect, an infinite number of options. It is confusing to the customer.

Don’t do it.! Use options pricing instead.