Knowing Your Company’s Product

Verizon Wireless workers with a Cell on Light Truck that is used to provide additional wireless call capacity.

In announcing its third-quarter earnings results recently, Verizon—as usual—attributed much of its success to its wireless unit. Fran Shammo, Verizon’s chief financial officer, noted that the reason Verizon Wireless leads the industry in the number of wireless customers is that it has always focused on its network.

“Scale is important,” he is quoted by The New York Times as saying. “But the network is the product here. This has been a long-term strategic investment for us.”

Knowing what its real product is and focusing on making it the best in the industry are two reasons Verizon Wireless excels. They also provide lessons for other companies wanting to lead their industries.

Even at the company’s founding in April 2000 (from a merger of Bell Atlantic and GTE, along with a few smaller operations) Verizon Wireless stressed the quality of its network. At that time, the company—or more correctly, perhaps, Denny Strigl, its strong CEO then and for the next several years—knew that no matter what brand or style of wireless phones customers used, they would not be happy if their calls did not go through. And, although many of us—especially those who live in or near large metropolitan areas—may have forgotten this fact, wireless coverage was for many years often very bad for much of the country’s cell phone users.

So, over the years, Verizon Wireless has focused on making sure its network—whether analog, 2G (the first generation digital wireless service, 3G (an updated digital service), or now 4G (the latest digital service known as LTE or Long Term Evolution)—has been as good as its technicians and billions of dollars could make it.

This focus is part of the reason why 79 percent of the phones purchased from the company during the third quarter were smartphones—a huge increase over its 25 percent goal only a few years ago. These phones suck data like candy, and they need a great network if they are to function flawlessly.

The lesson here, I think, is that a company must know what its real product is, and it must work to make it the best. In Verizon Wireless’ case, the product is its network. Other wireless carriers—those who trail their competitors and are looking for merger opportunities and funding injections to stay alive—may not see it that way. They might think their product is cheap service or phones, perhaps; or maybe they’re still not sure what it is, even after years of operation.

Verizon Wireless never stops improving its customer service and retail operations, or offering the best cell phones and wireless devices available. But it knows that while these aspects strengthen its business, it is its network that drives the company’s success.

Photo: Verizon Wireless

On the Wings of Brand, Marketing and Manufacturing

iPhone 5 photo by Eric Risberg, AP

Apple’s iPhone 5 does not go on sale in stores until Friday, yet the company has already broken records with the number of pre-ordered devices sold through its website. Customers bought out its initial supply in about 60 minutes and then bought more than two million devices in the first 24 hours the iPhone 5 was available online—about twice the number of last year’s iPhone 4s sold in a day, which was itself a record for the company.

Last week people started lining up at some of the company’s stores to be among the first to buy the new phone when the doors open Friday morning. Let me be clear: People were camped out eight days before the device goes on sale at the stores.

Why do people get so excited over yet another model of this smartphone that has looked so much the same since 2007 that most people can’t tell one version from the next?

It’s a combination of Apple’s brand, its marketing expertise, and its manufacturing details.

Few people would doubt that Apple has among the best—if not the very best—brand in the technology industry, a brand that still generates a feeling that the company makes products “for the rest of us,” as it stated many years ago when fighting for its life against all the Microsoft-based computers. That sense of being among the few who feel like an Apple insider and being among the “lucky” who own one of its products still exists—somehow—even though Apple now ranks as the largest U.S. company (measured by stock-market price).

We “lucky ones” must know there’s nothing unique about owning an Apple product; after all, it sold two million of them in 24 hours last week and is expected to sell nearly 50 million in the fourth quarter alone—enough to slightly move the overall U.S. economy forward. This reality sits in the back of our minds, but it can’t override our perception that runs clearly amuck in the front. It’s a lifestyle choice that we have bought in to—like owning a dog or driving a BMW.

That perception, embedded by brand, is driven by marketing and manufacturing.

It’s likely every company that makes cellphones introduced a new model in the past few months. In fact, some companies rushed their products to market just ahead of the iPhone 5 announcement last week, trying to gain some media coverage before being drowned out by reporters and bloggers loudly proclaiming the virtues of the new Apple device.

Yet, it’s unlikely you can name another company that held a major PR event for its new phone—especially one that drew hundreds of top tech reporters and bloggers from around the world, and then put a video of the two-hour event on its website where, one would guess, it was watched (in part or full) by thousands of consumers, and by an untold number of PR and marketing professionals trying to learn how it’s done.

These professionals (who consider such things in hopes of copying their effectiveness) also wonder how such a highly promotional statement as the following could work its magic yet again: “iPhone 5 is the best iPhone yet, the most beautiful product we’ve ever made, and we hope customers love it as much as we do.” This statement is used not only by Philip Schiller, Apple’s senior vice president of Worldwide Marketing, in the news release announcing the record-breaking pre-orders, but over and over again in the video.

And it works. Consumers believe it every time they hear it.

Then there’s Apple’s focus on trying to make the best product possible, a focus held dearly by Steve Jobs for his entire career (both times at Apple, at Next and at Pixar) and engrained deeply into the culture of the company. Whether Apple succeeds at this goal is debated—sometimes. But by trying, and then telling us and showing us that its trying, Apple goes a long way toward making the goal a reality in the minds and hands of millions of people.

A short iPhone 5 video on Apple’s website shows part of the manufacturing process and repeats language similar to that used in the Apple news release announcing the device: “Designed with an unprecedented level of precision, iPhone 5 combines an anodized aluminum body with diamond cut chamfered edges and glass inlays for a truly incredible fit and finish.”

Watching these edges being cut leaves some viewers amazed at the care put into the phone’s manufacture and leaves them knowing (before they’ve ever held the device) that it will feel like a piece of art in their hands—not a mere appliance on which to make calls and send texts. It increases their urgency to own one, an urgency like that felt by a rare-art collector bidding on a Gauguin or a Monet.

Each of those who have already pre-ordered the iPhone 5, who are now waiting in line to buy it on Friday, or who will be among those to have it before year end—each will feel that the device he/she will soon own will not be just one of millions of copies, but the only one. It will be masterpiece.

Walmart in Arkansas, Mexico and My Hometown

A few days ago, after our daughter completed her last final exam at Washington University in St. Louis, we took a short vacation to the Ozark Mountains of Arkansas. Since the Ozarks are a short drive from St. Louis, we had talked about going there for the past four years, and this seemed like a good time to go.

In Arkansas

In part because of the countless Walmart stories that have been in the news recently (and must be keeping the company’s PR agents up at night), I decided to visit two specific places in northwest Arkansas that have nothing to do with the scenic mountains. The first, Sam Walton’s original Walton’s Five and Dime store in Bentonville (where Walmart has always been headquartered) recognizes the company’s earliest history. The second, the Walton Family Foundation’s Crystal Bridges Museum of American Art in Bentonville, marks the company’s latest example of community involvement.

The company has had a long and less-than-stellar history of community involvement. So, its hard to think about Walmart as being a standup corporate citizen—a goal, I’m sure, of every PR and communications person working for the company, as well as its CEO and hoard of lobbyists in Washington and in cities and towns across the country.

In Mexico

Right now, the company’s reputation is being battered by news of its subsidiary in Mexico having “orchestrated a campaign of bribery to win market dominance” throughout that country, and by the company’s executives in Arkansas stopping an internal investigation, even after finding what its leading investigator said was “reasonable suspicion to believe that Mexican and USA laws have been violated,” according to The New York Times last week.

Now that the scandal has broken, Walmart’s communications department, we would like to think, is working long hours looking for a positive angle from which customers and other company advocates can view this PR mess, a mess described mildly as “a setback” by a university labor professor who has written a book on the company and who also has said, “Reputation is very important to Wal-Mart [sic].”

In the meantime, the company’s lobbyists are upping their game, making sure the company’s reputation remains on solid ground with what they consider their most important constituents: the U.S. Congress and the White House. In 2010, before the scandal became public, one of the company’s lobbyists boasted, according to The Times, that the company’s “reputation with elected officials is improved, not only in the U.S. but around the world.” He added that this popularity “makes it easier for us to stay out of the public limelight when we don’t want to be there.”

Unfortunately for Walmart’s corporate communications team, the limelight is aimed directly at the company today.

In My Hometown

But what really comes to mind when I visit Bentonville, and when I read about the company’s new PR situation, is the way Walmart has been, some people would say, responsible for the destruction of many small towns across America.

When I left my hometown many years ago, it had a population of 6,888—if I remember the number correctly, and I’m pretty sure I do. Now, much later, the town claims more residents. But it can do that, I believe, only because it has extended the city limits beyond their earlier boundaries.

It did so, it seems, to take in the new Walmart Supercenter built near what had been the western edge of town. That store is booming (aren’t they all?).

But downtown—where as a teenager I occasionally ate ice cream at the counter of a family-owned drugstore, and where I sometimes went to Benjamin’s antique store (should I really call it a dusty junk shop with more useless items than you could imagine would fit inside those four walls?)—is practically deserted.

The last time I was there, about all that remained from my youth were the offices of The Standard (it was The Daily Standard, when after school and on Sunday mornings, I used to throw the paper onto, or at least near, the porches of a hundred or so homes of eager readers) and a few doors away, Brunke’s hardware store, where even today the clerk can probably grab a fan belt for a ’47 Chevy off one of the shelves or from another shelf find the exact part needed to fix a broken pump responsible for bringing water up from the family’s well.

Now, long gone are the drugstore, Benjamin’s, and most of the other shops that thrived a few years ago.

More stores sit closed and empty downtown than are open for business. Most of the shoppers are at Walmart.