January 16, 2013

Dell, HP, and Apple: It's The Merchandise!!

In marketing and analytics, we read breathless headlines.

You know what I'm talking about.

We learn how Big Data will revolutionize our businesses.

We learn how Omnichannel is the strategy of the future, and without it, we're dead (never mind that H/M doesn't even have a US e-commerce website and does billions of sales in-stores each year ... and never mind that Amazon is mulching the in-store experience ... just ignore the facts and go Omnichannel folks, it's HOT right now).

In Social Media, Dell is the sweetheart, and for good reason ... you see, Dell shares findings with the social media community (click here) and (click here).  After reading one of the statements (fans create cash), you might think, "you're darn right fans create cash".  It's an accurate statement, no doubt.

It's just not the company that the social media folks like to study that possesses fans who create cash.

Look at the performance of three computer-focused companies above.

  • HP does not excel at social media, based on the comments of the social media elite.  Their five year sales trajectory is flat, profit is a disaster.  Stock prices are down 75%.
  • Dell is the social media darling, though their social media success is astroturfed.  Their five year sales trajectory is flat, profit is virtually non-existent, and stock prices are down 25%.
  • Apple has no social media presence whatsoever.  Their five year sales trajectory is a rocket escaping Earth's gravitational pull.  Their stock price is four to five times what it was five years ago.  Profit growth is exceeding sales growth.
Apple, without the social media astroturfing employed by Dell, possesses an avid fan base, and those folks spread the word, don't they.

HP - merchandise that customers are not embracing (no social media excellence).

Dell - merchandise that customers are not embracing (astroturfed social media excellence).

Apple - merchandise that customers cannot get enough of (organic, fan-based social media).

Clearly, astroturfed social media can make a difference ... a percentage point here or there.

Clearly, outstanding, must-have merchandise means everything ... and leads to customers/fans who must share their love of the merchandise.

So, if you have a choice ... which route would you take to achieve growth and profitability?
  • Merchandise customers are neutral about, coupled with minimal social media activity.
  • Merchandise customers are neutral about, coupled with astroturfed social media excellence.
  • Merchandise customers absolutely must have, coupled with no social media excellence and customers who must share, via social media, their love of merchandise?
Hint - it's all about merchandise.  Always has been.  Always will be.

And yet, almost nobody in marketing, analytics, omnichannel excellence, big data, or social media talks about merchandise.

Focus on what matters ... merchandise!