Thursday, June 14, 2007

Apple iPhone: Who Will Manage the Customer Interactions?


One of the challenges in the network era is the multiplicity of actors involved in customer relationships. It is easy when the relationships in the ecosystem are 'away' from the customer--such as the multiple companies involved in the design, manufacturing and supply of Apple iPhone. In such a case, Apple acts as the prime contractor and the partners carry out the assigned tasks to create the product in ways specified by Apple. What makes Apple iPhone interesting is that both Apple and AT&T will have complementary (and in some cases, overlapping) roles in customer interactions. This is an inevitable issue in ecosystems where value is co-created by multiple customer-facing entities.

In the case of iPhone, here are the areas to watch out for:

1. The much-hyped Apple iPhone will be launched on June 29 at 6:00PM (local time) at relevant Apple Stores (about 170) and AT&T stores (about 1800). Clearly, anyone who has walked into both the Apple Store and the AT&T store knows that these retail store experiences are NOT the same. However, there are far more AT&T retail stores than Apple stores. So, the chances are that more customers will buy an iPhone from an AT& store than an Apple store. Now, if it is a simply a matter of buying a product from a store, then it may not mean much but, in this case, there is a minimum 2-year contract with AT& service. So, AT&T will bill me for the phone service (which is very different from any other Apple product or service).

2. To set up an iPhone, we need an acount with iTunes. Here's what we know now. Apple explicitly states that:
To set up your iPhone, you'll need an account with Apple's iTunes Store. If you already have an iTunes account, make sure you know your account name and password. If you don't have an account, you should set one up now to save time later. To set up an account, launch iTunes, select the iTunes Store, and click the Sign In button in the upper right corner of iTunes. Sign in and you're ready to go.

So, it looks like customers will have atleast two separate interactions--a bill from AT&T for phone services; and a bill from iTunes fo rmy media (music and video downloads). I only hope that customer service encounters do not hugely differ between AT&T stores (and call centers) and Apple stores (and call centers).

Service encounters have a huge challenge when multiple companies interface with the customer, such as: who has what data? who owns the responsibility for customer loyalty? We know this from business-to-business service interactions in consulting and IT services. But, it is new in the customer domain.

So, Apple iPhone is more than just a product launch. Media publications such as Boston Globe have been focused on competitive responses from Palm, Nokia, HTC, Prada and others. But, those commentaries miss the most important point that this launch signals a NEW way of crafting winning strategies in an network-era. Prada may look like iPhone but the customer interaction is primarily with the service provider. Apple iPhone launch with a preferred partner, AT&T is different.. And over time, Apple will announce non-AT&T carriers. How will that impact the relationship between the launch partners? This product spans more functionality than other phones and consequently, will involve other key partners (example: videogames and banking?). There will be mishaps, there will be annoying and frustrating posts in the blogosphere. But, we should glean valuable lessons from this initiative for other settings when multiple entities are involved in customer interactions.

Look beyond obvious imitators from a product perspective. Look at how the different companies are working together to orchestarte winning customer interactions. The more significant innovation may be in how different companies work together to orchestrate service interactions

1 comment:

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