10 Business Lessons You Can Learn from Apple

Apple is a very successful company today. They are incredibly profitable, have a loyal following, and produce great products. I was thinking of some of the things Apple has done right over the years, as well as what they've done wrong, and have come up with a list of ten business lessons you can learn from Apple.

1. Focus On One Thing and Build a Reputation for it

Apple specializes in one thing: delivering high quality products and services that are simple, easy-to-use, and innovative. They've built a reputation for it – and everything they release is consistent with this reputation.
Business Lesson: Be a specialist. Just because you are capable of offering a product or service doesn't mean you should. People feel more comfortable working with a specialist, and will pay a premium for a specialist's services.

2. Build Buzz Around your Products and Services

Are there many companies out there that are as good as Apple at building buzz before a product hits the market? The launch of the iPhone was well anticipated and people were camping overnight to get it. The annual Macworld expo is a huge media event because reporters want to cover the newest Apple products. Pre-product buzz has become a part of Apple's business and it always delivers strong sales numbers.
Business Lesson: Buzz builds excitement and gets people talking. If you are considering launching a new product or service, build some buzz first. Notify existing clients and mailing list subscribers, submit a series of press releases leading up to the launch date, or post teasers on your website.

3. Excitement Gets People Talking

When was the last time you referred your water or electric company – who aside from natural disasters – have consistently provided 100% quality service? I never have. But we are quick to refer products we're excited about. I've shown a few people the videos on Apple's website, and after viewing them, the reaction was the same – excitement. Apple's marketing department has done a fantastic job of getting people excited about their products and services. Excitement creates desire and makes a person have-to-have your product. It also gets existing customers referring your services to their friends, family, and colleagues.
Business Lesson: You can be the best at what you do and even bend over backwards for your clients, but if you can't get them excited about what you do, they will never refer you. Being satisfied doesn't generate referrals; excitement does.

4. A Superior Product or Service Doesn't Always Equal More Sales

Although Apple has been increasing their market share in the computer and operating system market in recent years, it wasn't long ago that a majority of people wouldn't have even considered owning a computer running Apple's operating system (OSX). But that wasn't because OSX was an inferior product – in fact Apple is based on the Unix operating system. It's much more stable, it's fast, it rarely ever crashes, and it doesn't rely on the awful registry system that Windows uses.

Business Lesson: You may have a superior product or service, but that doesn't mean you will have a million dollar business. You may even wonder why your competitors – who offer a lower quality product or service – are doing better than you. Marketing, networking, and other factors are vital. Even if you have the best product around, it won't do you any good if no one knows about it and hasn't been exposed to your brand.

5. Don't be Afraid to Charge More for your Products or Services

Apple computers are not cheap. Compared to a Dell or HP running Windows Vista – they are 2-5x more expensive. But price doesn't deter people from buying Macs. Price actually tells us something about a product.

Given two similar products with no other information, we immediately assume the higher-priced product must be of higher quality. If Apple were to price their products too low, they wouldn't live up to their reputation of delivering high-quality, innovative products and services. Price creates a perceived value.
Business Lesson: Unless you compete on price, raising your prices won't necessarily hurt you. It may in fact help you get more business (it did for me when I first raised my rates). But be sure you can communicate to prospective customers the value you are providing; otherwise a more expensive product may not seem justified.

6. Have a Well-Defined Strategy

The Apple Timeline was absolutely critical to Apple's success with its new generation of products.

It all started with iTunes in early 2001. Following the demise of Napster, iTunes was released at a time when people were searching for new ways to download and organize their music library.

In October of 2001, Apple launched the iPod – integrating perfectly with iTunes.  The timing of the iPod and its integration with iTunes makes it clear this product strategy was well defined from the beginning. iTunes would bring in customers who would store their music in their iTunes library, and soon after came a device to take that music with you on the go. Apple makes money off of the hardware, then profits from the number of music downloads.

Over the years, the iPod became smaller and available in color. iPod users were ditching their old iPods and continually buying the newer, smaller ones. Thousands of new people were using the iPod with each subsequent release. But the iPod, along with the line of iMacs and Macbooks, were what helped Apple build back its reputation and reach a massive number of new buyers who become incredibly loyal. They really went after the younger buyers… setting the stage for the launch of the iPhone in 2007.

When Apple released the iPhone in 2007, they already had a reputation and a client base. The iPhone reached unprecedented media attention – and buyers were camping out overnight to get the first ones. The iPhone tied in with iTunes to increase Apple's volume on music and downloads. It helped drive new revenues via the App Store – where Apple doesn't develop the majority of apps – but keeps 30% of the revenues. They are also profiting from iPhone and iPod accessories.

Apple combined all of this with a very well run set of Apple Stores all across the country. Steve Jobs masterminded – not just the products – but more importantly the strategy. Without the strategy, the iPhone (and Apple) may have flopped.
Business Lesson: iTunes and the iPod were undoubtedly what brought Apple back into mainstream popularity. Had the iPod been released before iTunes, the iPod – and Apple – may not have reached the same level of success. Great products and services are not enough – Apple was successful because they had a well-defined strategy and execution plan. Take the  time to plan out where your business is headed and how to tie in future product and service launches to capitalize on your reputation and existing clientele.

7. Give Yourself Negotiating Power – Then Use it

Did you know that AT&T pays Apple an estimated $18/month for each activated iPhone customer? Apple also keeps 30% of the sales made in the Apple App Store. Apple can negotiate like this because they have a desirable brand and reputation. AT&T knew that the iPhone would bring thousands of new customers to switch over to AT&T - so the deal was still attractive to them.
Business Lesson: If you have something that adds value to another business, don't undercut yourself by not negotiating. Apple knew what they brought to the table, and were reportedly turned down by Verizon initially before going to AT&T. Be sure you do the same – even if it means running a hard bargain.

8. Don't Limit Yourself to One Revenue Stream

Apple brings in revenue from various places. Sale of their products (computers, laptops, iPhones, iPod) is obvious. But they also bring in revenue from AT&T iPhone customers, iTunes, subscription services like MobileMe, their online store, and probably various other places.
Business Lesson: If you are a small business or entrepreneur, cash is king. You need cash to stay in business. If you limit yourself to one revenue stream - or receive a large part of your income from only one or two clients - losing that revenue stream or client could singlehandedly put you out of business. Try finding ways to bring in multiple revenue streams from various sources – even if they are all for the same product or service by spreading your revenue across a larger number of clients.

9. Marketing Pays Off

Without marketing, Apple wouldn't be where they are today. Their product packaging, branding, product release strategy, Apple stores, and of course – the "I'm-a-Mac, I'm-a-PC" ads are a large part of their success.
Business Lesson: Every small business needs marketing to succeed. That doesn't necessarily mean running radio or TV ads, but it does mean having a well-defined brand and getting that brand in front of people. Whether you do that by networking, sending out flyers, or developing a strong online presence, sales will rarely come without it.

10. Be Unique

Apple is driven by innovation and being different. It's made them successful, and it raises the barrier to entry if you want to compete with them.
Business Lesson: You don't have to revolutionize your industry or change the world, but develop your own business plan and your own way of doing things. A strategy that works for your competitors may not work for you. Strive to be different and innovative in small ways.

What do you think are some other lessons learned from Apple? Have you seen results applying any of these lessons to your business?