Apple, Inc. did it again. The company just reported record third-quarter earnings, sending the stock to all-time highs and flirting with a total market capitalization of $1 trillion.
Wow, $1 trillion. That’s a 1 with 12 zeros. That’s 1,000 billion. That’s a million million. It’s estimated that a trillion-dollar stack of $100 bills would reach 631 miles into the sky, much higher than the world’s tallest building, much higher than airplanes fly, much higher even than the International Space Station orbiting the earth.
The magnitude of that much money is truly vertigo inducing. But the basic business principles behind Apple’s recent successes are down to earth and applicable to every business and organization, including yours.
Apple basic principle No. 1: Satisfy your customers.
Apple is obsessed with making products people love. During the Q3 earnings call, Apple’s CEO repeatedly pointed out customer satisfaction statistics from independent surveys: 94 percent satisfaction with iPads, 96 percent satisfaction for new iPhones in general, and 98 percent satisfaction for the iPhone X in particular.
Satisfied customers keep coming back for more. And in today’s world, positive word of mouth among friends and family is considered twice as effective as any form of paid advertising.
The lesson for your business is clear: Obsess about customer satisfaction. Measure it statistically and hold your entire team accountable for improving it.
Apple basic principle No. 2: Expand your product line.
Apple started as a manufacturer of computers. But they then used their understanding of computer components and their knack for technological innovation to launch product line extensions like the iPod, the iPad, the iPhone and the Apple Watch.
They also branched out beyond hardware into services such as extended warranties, smartphone applications, payment transactions systems, music and cloud storage. Together these service extensions accounted for 18 percent of total Q3 revenue and the company has plans for much more.
Today, all these line extensions have far eclipsed Apple’s computer sales.
The lesson for your business is clear: Your customers are hungry for products that are fresh and new. Expanding your product line will keep current customers coming back; attract new customers, and keep your company growing.
Apple basic principle No. 3: Expand into new geographic markets.
More than 60 percent of Apple’s revenue comes from outside the United States. And they continue to open new markets. Company executives attributed much of their success to increased revenues from emerging markets such as India, Turkey, Chile, South Korea, Mexico, Eastern Europe and yes, even Russia.
The lesson for your business is clear: If you serve Miami-Dade, expand into Broward. If you serve the commercial market, expand into the residential market. If you sell to hotels, start selling to cruise lines. If you have a bricks-and-mortar location, start selling online.
Apple basic principle No. 4: Push prices ever higher.
When Apple introduced the iPhone X last November, many people were aghast at the audacity of a $1,000 smartphone. Apple, they claimed, had certainly gone too far.
Au contraire. Customers are gobbling up the $1,000 iPhone X and sending Apple’s year-over-year Q3 smartphone revenues higher by 20 percent.
The lesson for your business is clear: Don’t underestimate people’s willingness-to-pay more for innovative new versions of your most popular products and services.
There’s no question that Apple is approaching a $1 trillion market capitalization thanks to the vision and genius of company co-founder Steve Jobs. But since Jobs’ death in 2011, Apple has continued to thrive on the basis of strong execution of basic business principles.
Principles we all can apply to the businesses and organizations we run. Keep customers super satisfied, add new products, expand into new markets, and don’t be afraid to charge high prices.
Adam Snitzer is a revenue strategy expert and president of Peak Revenue Performance, a consulting firm that specializes in helping companies attract more, high-paying customers. He can be reached at firstname.lastname@example.org, or via the company’s website at PeakRevenuePerformance.com.