How well do you REALLY know your customers.

Adding value is key in any partnership but it can be easy to presume that you know how to deliver this. It's not often that Apple are used as an example of a brand getting something wrong, but here's an example of where they did so spectacularly

Adding value to your customer base is one of the, if not the, most important factor to consider in any partnership or collaboration, in fact it should be right near the top of the list in all your business activity. But to do that we need to understand what our customers want, and I mean really want. Not just what you think/hope they want in order to fit in with your next marketing campaign or product launch.

With this in mind, I want to talk about an entertainment collaboration, which on the face of it should have been a perfect match, but it really wasn’t.

U2, one of the biggest bands on the planet.

Apple, one of the biggest telecommunication brands in the world known for being on the cutting edge.

Both brands have a dedicated audience that buys into them.

The two famous names had partnered before in 2004 when the band helped the iPod to gain a lot of fame with their hit song Vertigo. Back in the Noughties, the commercial was iconic and remarkably successful.

However, the tech and the audiences changed quickly in ten years, and the next publicity campaign in 2014, was not a success – it was an absolute disaster.

Apple was introducing its latest iPhone model and Apple Watch. At that time, they considered it a great idea to announce their renewed partnership with the rock band U2 and give away free music. But this turned out to be one of Apple’s greatest fiascos.

I find it hard to believe how this marketing idea ever made it out of the board room. But it did. U2 performed at the end of the announcement of the iPhone 6 and Apple Watch in 2014 to reveal their latest record, Songs of Innocence, which automatically loaded onto the music libraries of hundreds of Apple customers at no charge. The music suddenly appeared on 500 million iTunes accounts. The stunt allegedly cost Apple $100m in royalties and a significant marketing campaign for the band.

However, it was an expensive blunder.

Apple’s core audience likes to think of themselves as independent and trendsetters, ahead of the curve. Not people who take kindly to having musical tastes forced upon them.

What compounds this is that U2, whilst still one of the biggest draws on the planet, are not seen as cutting edge. Certainly not amongst the crowd apple were most looking to influence.

These users felt like their intimate space was intruded by this campaign. One’s music collection is a very personal choice, and the two brands were naive to think that users will respond well to this “offer”.

Apple very quickly released a unique one-click tool to allow users to delete it immediately, but it was a bit like shutting the stable door after the horse had bolted.

I do believe the principle was great, but it should have been done in an exciting way (pick your album from this top 10 with a mix of genres and new and older bands) but Apple was lazy in its thinking what their customers like. They had stopped really innovating, something that they have continued to be accused of over recent years.

In this instance both brands are huge enough to have taken both the PR hit and the cost implications, but other organisations might not be so lucky.

So, before you go all in on your next big partnership, don’t get lazy, do your customer research to ensure you don’t end up with a ‘bad apple’ that ruins your bunch.

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Gone

In business, as in life, not all partnerships will last forever. But that doesn't have to mean bitter feuds, blocked profiles, and feelings of resentment. Here’s how one celebrity business pairing are managing their break up in the perfect way. 

Newsflash!

Despite my passionate spreading of the virtues of working in partnership I’ve got some bad news for you.

Some partnerships will not to have a forever and ever ending. Sometimes, the smart thing is not to stick together but to amicably go your separate ways, ideally with friendships formed intact.

Allow me, if I may, to use a high profile celebrity couple as an example of the perfect way to do this. I believe they call it ‘consciously uncoupling’ in celebrity circles.

When eBay met PayPal on 3 October 2002, with a deal valued at $1.5 billion, it was a marriage made in heaven.
At the time, the chemistry was right, eBay was looking for a secure transaction platform for its B2B and B2C customers on its e-commerce website. PayPal was leaving the entrepreneurial hands of Elon Musk and was going public on the IPO looking to make its name in online merchant services.

The internet was in its infancy, and these young dot.com institutions seized the moment and formed a winning partnership that was mutually beneficial. eBay had a trusted payment provider to market its concept and PayPal had control of its whole customer experience. The relationship was a win-win.

However, on 30 September 2014, eBay announced the divestiture of PayPal as an independent company. The partnership ended on 20 July 2015.

I am not sure who initiated the split, possibly one of those jealous hedge-funders stirring things up, but this hasn’t been your classic relationship break-up. (No crying over ice cream and listening to Adele’s ‘Someone Like You’. Or trawling through Facebook remembering times that were. It's been a long time since I had a break up, is that what people do now?)
To their friends, the business world, the separation is amicable. The two companies have stayed steadfast to their values, without resorting to dramatic headlines in the newspapers (or indeed social media. I can't confirm what they say about each other to their close friends though).

More importantly, the partnership split has not inconvenienced the people they look after who could be caught up in the aftermath of a messy break up; the buyers and sellers living in 33 countries who extensively use eBay as a platform for their business. Instead, the pair signed a five-year operating agreement to maintain a close relationship through to mid-2020, possibly 2023.

Call it a new way of being in a business relationship, even if the feeling has gone.

eBay went back to focus on what was best for their customers and chose a newly emerging online merchant partner with lower transaction fees, Adyen, so it now provides its merchants with lower costs and more control over their finances.
PayPal continues to process eBay payments, and it is independently thriving with its online payment brand in what is now an incredibly competitive $100billion market.

Both parties have acted in the best interest of the customers they jointly serve throughout this ── and that is something to be noted, celebrated, and born in mind when we think about our partnerships and collaborations.

(Outro music, queue: Destiny Child’s ‘Survivor’.)

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