A blue collar strategy for Apple

My years at selling Apple products from 1982 to 2004 certainly helped me put three kids through college and got me to the point of not having to work more than forty hours a weeks during retirement so I thought I would give something back to Apple during the holiday season.  I would like to offer Tim Cook and John Brandon some free advice on how to really make Apple's 2007 a year to remember.

My experience with Apple resellers over the years has been extensive.  I have worked with everything from the well under half a million dollars a year resellers to one that did nearly $15M per year out of one giant store well before big box stores were popular.  I actually know a couple of Apple Specialists fairly well and have followed the challenges they have faced selling Apple products.  I also happen to have houses in two different areas of the southeast, both of which are isolated from the flagship Apple Stores.  My home base, Roanoke, Virginia has finally after many years gotten one small reseller who sells and services Apple product. Roanoke still is over three hours away from any Apple Store.  The Cape Carteret  area of North Carolina where I spend a lot of my time isn't  so fortunate.  There isn't an  Apple reseller within two hours and the nearest Apple  Store is about three hours away.

Apple has been right in going after the major metropolitan areas with  their flagship stores. That's where the most dollars are. Yet there is significant opportunity outside those major areas. Still I'm not certain there is even a way to downsize those magnificent Apple stores enough to service  these smaller metropolitan areas.  Actually  that's where my idea comes  into play.  It's nothing new or revolutionary.  It's been proposed a number of times at Apple, but for whatever reason, it's never really gotten out the door in the US.  Mostly likely it is an internal compensation issue at Apple, but I think reaching out to blue collar America is important to Apple's growth. 

Developing a strong franchise program should have the strategic importance for Apple to push aside any internal compensation issues that might try to derail it. An effort to provide Apple coverage in small metro areas and even in small towns could end up being a successful model for expanding Apple spotty worldwide coverage.

I think that Apple could come up with an Apple franchise that mimics their very successful Apple Stores.  It should be a scalable franchise which could operate successfully in something as small as a typical cell phone store to something more traditional in the way of a computer store.

The keys to success for this plan are making it very affordable, keeping it consistent with the basic look and feel of the Apple Stores, providing timely shipments of newly announced product, and letting the stores carry the full Apple product line including the iPod and any to be announced new products such the widely rumored iPod phone device.  Apple has already had experience with a program in England where Apple actually owned almost everything but the walls.

In the US over the years, Apple has tried a number of programs to allow already established resellers to expand into new areas.  They have almost universally failed.  The reality is that most stores need to stay close to their home base.  Their management skills, business contacts, and technical resources are often hard to scale.  Finding successful franchisees might take some screening but somehow I don't think there would be any lack of applications.

A cleverly designed (I certainly don't have all the pieces) franchise program would let new franchisees in Apple's white space (areas without stores or resellers) take advantage of the knowledge that Apple has gained from running its own stores.  Perhaps the stores could be wired into a virtual genius bar.  Maybe they could have special service training to allow them to do the basics, but also have very quick access to Apple's contracted regional repair centers.

Apple could establish an Apple Academy where owners and sales people would have to go for training before even opening their doors.  It wouldn't have to be elaborate, since most of the people wanting to run these stores and bet a significant chunk of their money would be Apple champions which is what I like to call people who have believed in Apple products long enough to become experts in keeping them humming.

This program would be all about turning around the perception that Apple isn't a good business partner.  To make this work, Apple would need to build a program where its franchisees can make a very good living out of a well run location or two.  I've done the math myself on spreadsheets a number of times. The franchisees don't need to see a road to riches to flock to Apple, but it would certainly help if they knew that in their first dance with the elephant they didn't get crushed.  Of course figuring out a way to keep their franchisees healthy and their catalogue resellers alive might be the biggest challenge.  Still I think it is possible, and I know there are still some very smart folks in Apple's reseller programs, that could take this and really run with it.

Apple can break out of the metro areas and figure out how to win small town American. They just need to leverage local business men to provide more personalized, better service and well supported Apple products. If the personal service they provide is better than the local big box resellers, Apple can own the market.  I have seen small resellers with significant connections in a local community turn in amazing Apple sales figures a number of times.  Usually they died when someone with better pricing for Apple products started cherry picking business that they had worked very hard to build.

So here's the deal Apple.  Come out with a great program, and I'll even find a partner and open one on North Carolina's Crystal Coast.  I might not be able to do the hundreds of millions of dollars of Apple sales like I did when I was leading an Apple team, but I will bet you I could convert thousands of Windows users to Macs in an area which hardly knows what a Mac is.

I guess I can call that my Willie Loman pipe dream of the year.

Somehow I suspect my application for an Apple franchise might get pulled and filed in the trashcan.

Still I think my Apple franchise plan would work particularly well in the South which has never been Apple's target market.  You can find lots of posts (about five times the number of Applepeels that I have done) about the South (and lots of other things) over at my View from the Mountain site.

Comments

[John]

Not to throw cold water on your thoughts, but I'm skeptical. I heard some time back that 85% of the population in the US was within 15 miles of an Apple store. Since then more have been built. The problem with siting a retail presence in rural areas is the lack of population density. Franchisees will likely want to locate close to Apple stores because that is where the business is but that defeats the whole purpose.

Still, your idea has merit. Perhaps Apple could offer support for franchisees as follows. They could keep stock in a warehouse setup with one day Fed Ex or other rapid shipping. This would cut the size of the store. They could also offer an iChat video genius bar to backup the store owner. This way one genius could service a number of stores which are too small to support their own genius. The store owner could push the reset buttons and load the CDs as required under guidance of the genius. Software questions could be answered directly and a second screen under remote control of the genius could be used to explain things. This could also be used for teaching so that a remote store could host small classes just like the Apple store does.

[Holger]

That might be an idea for Apple to grow faster outside their home market USA.

There are countries (Germany for example) where no Apple stores are available yet at all. The big cities here in Germany already have some (non-)apple stores, mainly small shops and some fast growing chains like Gravis and lately the big electonic shops in cities with over 100.000 inhabitants.

But it's nearly impossible to buy a MAC in small cities (<50.000 inhabitants) these days. Mailorder is big in Germany, but only for people that know what they want - 90% of all buyers don't know that a Mac would fit their needs better than a PC.

Apple will never reach these people with their current strategy.

[John M]

You're right about Britain, Edinburgh (think Cincinnati size ~500,000) has had a pretty good local reseller for donkeys years which went through a refurb recently to look the spitting image of a real Apple Store. I was there a few days ago and they have the whole Mac lineup in a shop no bigger than a Manhattan ma & pa convenience store. Knowledgeable local staff too.

Mind, rumours are that a real Apple Store one will be opening in much larger premises nearby sometime in 2007 so the elephant might be without a partner once again by the end of this dance!

I think you're right about small town America as there are surely swathes of the country with decent populations and no official outlets in sight. But being outside the US it seems to me the higher priority should be expanding into the other 96% of the world, in which case a hands off approach with little guys back home would indeed make sense.

There need to be Apple Stores in every European capital and in the top flight global locations such as Singapore, Hong Kong and Dubai. Apple's strategy should really be about *presence* in my view, as the biggest enemy the Mac and all their other products share in so many markets is simple unawareness.

Your comment about selling to people who don't know what a Mac is really rings true. That's Apple's obstacle to overcome, and the best way to do that is with as many advocates as possible. In and outside the company.

[Chuck]

"I heard some time back that 85% of the population in the US was within 15 miles of an Apple store."

There is no way that statistic is true, IMHO. I live just north of Columbus, OH in a very small town that is growing very fast. I would have to drive over 30 minutes and then spend another 5-10 finding a parking space and then walking to the Apple Store in Easton (on the east side of Columbus). We could definately use another store on the north side of Columbus, in the new Polaris area. Lot of money being spent there, so much so you don't travel NEAR it on a Saturday morning or you sit in traffic.

I think the idea is a good one, as long as Apple can dictate the design and the "culture" of the stores. I was an Apple rep at a CompUSA in 2003 and I hated the way they laid out our area. It was so generic compared to the Apple Store. I think the hard part would be placing the franchises. They would have to be close to potential customers, yet not too close to existing Apple Stores.

I would love to run one.

[howlongtoretire]

I think they'll be pursuing the Best Buy and Comp USA deals rather than the idea you suggest. The pilots seem to be going well, at least in my area.

[Greg Brown]

Amen, brother. I have wanted to open an Apple Store and Apple Consultancy office in Greenville, NC for quite some time and a smaller satellite store somewhere on the Northern Outer Banks where I spend as many weekends as possible.

Perhaps you could open the Souther Outer Banks store and we would have everyone from Virginia Beach to Greeville, Ocracoke, heck, from Rocky Mount East to the South Carolina border locked up (perhaps then we could expand to Myrtle Beach?)

I am slowly, SLOWLY, converting the town of Rodanthe, NC to Mac users, in fact my first Mac-based motion detection security system will be installed this Spring.

One other thing of note. Raleigh has two "local" Apple stores, one at Crabtree Mall and one up the road near Chapel Hill yet the original Apple retail-and-repair shop, 10Plus Systems (www.tenplus.com), is still going strong despite the opening of these two Apple Stores.

In fact, they recieve a good bit of fix-and-repair business from the Apple Stores once the warrenty on the Apple computers have lapsed. So I think your Apple Retail "mom-and-pop" outlet or two is viable. I'd sure love to change careers and open a couple stores.

[Alex Patsay]

Isn't the network of Apple Store locations already a form of a franchise? It's not really "corporate" Apple, and operate on its own, though it definitely has some privileges that other Apple resellers don't have - like faster availability of newly released machines.

I live near Hanover, NH, and the nearest Apple Store is approx. 60 miles away. Luckily, Dartmouth college happens to be in Hanover, and it's a big "consumer" of Macs. So I have Authorized reseller/service provider with on-site repair and nice retail location that has some feel of the Apple Store. That helps me a lot :)

[ocracokewaves]

The stores are as corporate as you get. Everything is controlled by Apple. There is almost no independent thought according to what I have heard.

[Leonard]

It would be nice if there were an Apple store nearby, a smaller one. Apple has an official dealer in Duluth, MN, which I am about sixty miles from. However, they have no Macs in the store. So one cannot say that there is any high visibility in the biggest city(90,000) in northern MN, WI, or MI.

Your idea would be better, or at least worth trying, than how things are done around here now. The place I mentioned has an Apple repairman who knows Macs. But there is no sales person around that I have ever seen, for ten years, anyway, that is able to speak about Macs well. Kids at Best Buy are better versed, a few of them, anyway.

It sure would help Mac sales around here for there to be some Macs in a store for people to see and to see doing something. Even without that, there are some Mac users and purchases. But a lot of people have never seen one here.

[Au]

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