The Apple Experience

Carmine Gallo: It's a very unique experience among retailers, there's no question about that, and it wouldn't surprise me that many people have not visited an Apple Store, even though it's one of the most profitable on the planet, because there are only 362 or 363 as of this podcast, so there are certainly a lot of areas that are not close to an Apple Store, so I understand people who have not visited an Apple Store. If you are interested at all in communication or leadership or understanding employee engagement you really should go to an Apple Store and visit. It's wide open and clean and uncluttered, there are very few products cluttering the shelves. All of the products are on, they're working, they're loaded with applications. Nobody is high pressure, nobody is standing over your shoulder waiting to make a sale, they're there to help you, to answer questions, they'll take all the time in the world that you want because it's a non-commission sales floor. So there's very little pressure, but they make people feel good, they make you feel empowered and enthusiastic and happy about being in that store, and, as we'll talk about, Rachel, there are a lot of techniques and reasons that they do so, but it's a very unique experience when it comes to any retail type of location.

Rachel Salaman: And how transferable is that to other industries, or other shops I suppose if we're talking about retail?

Carmine Gallo: I think it's very transferable. Everything that I learned about the Apple retail experience is transferable to any industry, any company and any field, whether it's retail or non-retail, which is why I wrote the book about it. I didn't want to focus on retail exclusively because all of the communication techniques are things that everybody should be using, and I have a number of case studies in the book of companies and brands that are similar to Apple that have actually been inspired by Apple or which have inspired Apple themselves and they are not in retail. For example, the Ritz Carlton, the famous global, luxury chain of hotels. Apple was inspired by the Ritz Carlton in terms of the way they train their employees to communicate with their guests or their customers. So everything that the Apple retail store has learned about enhancing the customer experience and the way you interact with employees and with sales professionals, everything Apple has learned is something that can apply to anybody in any field.

Rachel Salaman: Now it's interesting that you say that you didn't set out to necessarily focus on retail operations, but you don't actually talk at all about Apple's online customer service, and I just wondered why that was?

Carmine Gallo: I'm a communications specialist so I really wanted to focus on that aspect of the retail store that focused on communications, and that's the interaction between the employee, what are called specialist or the sales associates of the Apple Store, and customers, and that gave me the best case studies regarding actual in-person communications; what can we learn from that and how can we apply it to any company. The online experience I think would have taken me a lot more into customer service, and again that's not necessarily what this book is. It's not a customer service book, although all the techniques will help you enhance customer service. I wanted to really find out more about communication, how to hire and motivate and inspire your team and then how to train them to communicate effectively with customers.

Rachel Salaman: And in the case of Apple, of course, it's difficult to know whether the loyalty of customers comes from that experience, or it comes from the appeal of the products themselves. What did you see when you looked into this?

Carmine Gallo: Well Ron Johnson, who was the head of Apple Retail, and he is the one who, along with Steve Jobs, really re-imagined what retail should be, and now he is the head of JC Penney here in the United States, which is obviously a very large department store. Well Ron Johnson is the one who said "If it was just about the products, you can get the products anywhere," you can buy the products online, different locations, you can buy Apple products at Walmart and a number of other large brands here in the USA and across the world. You can actually buy those products at a discount as well, so if it was just about the products why is the Apple retail store doing so well? It's because of the experience. They knew they had to go beyond the product, so they created an experience. So when you walk into the store you can learn things that you never learned before about the computers, they teach you things.

They have a program called One to One, which I still go to two or three years after my first Apple product, I still go to this program called One to One, and One to One is where you sit down with what's called "a creative," someone who can teach you all about the software and tools that you can use on your Macintosh. So again that is helping you enhance the customer experience because it is teaching you something new. They had to go beyond just selling you products, Apple Store, in order to compete they had to go beyond just selling computers, they had to create a very rich experience around the computers. So it does go beyond the products, Rachel, it goes beyond the products fairly significantly.

Rachel Salaman: And at the beginning of the book you liken enthusiasm for Apple products or the Apple brand to religious fervor, so I should ask you at this point, are you a believer yourself or do you try to be objective when you're writing about this?

Carmine Gallo: You know, I'm not that objective. I mean, I am a believer in leadership and communications, and an effective leadership and communications, that's what I believe in. I don't care whether it's Mac or a PC, in fact we're mostly PC in my office in California. I do have a Mac that I use for presentations, but other than that we're mostly PC. So I'm not one of those people whose going to be standing in line overnight for a new product, but I am fanatical, if you want to use that word, about communications, and that's why I originally wrote a book on Steve Jobs, because I thought he was really the world's best corporate communicator. I realized that a lot of communication, effective communication, takes place on the Apple sales floor as well between employees and customers; what is that communication like why does that enhance the overall experience with the brand and the products? So that's what fascinated me. You mentioned religious fervor, there is a religious fervor. I talked to one gentleman who, here in the United States, will visit every new Apple Store, every store that opens he actually takes a trip, he makes it a holiday and he visits new Apple Stores, he'll travel thousands of miles to visit new Apple Stores. That's a religious fervor. People propose in an Apple Store, Rachel, I don't know if you know that? Some people have gotten married in an Apple Store, people dance in Apple Stores and they record themselves and they post it to YouTube or Facebook. I'm not sure what else to liken it to.

Rachel Salaman: Now you mentioned a little earlier how Steve Jobs looked to a hotel company for inspiration about developing the Apple customer experience, you mentioned Ritz Carlton, in the book you also talk about The Four Seasons. Can you tell us a little bit more about that, what was it that he saw in the hotel world that he thought would transfer into what he was trying to do?

Carmine Gallo: The reason why Steve Jobs studied hotels and luxury brands is because the Apple Store is not in the business of selling computers, and I have to repeat that, it's very hard to get this through to people. Okay, your business is not the business of selling products, it's to make people happy, it's to create an engaging experience. So this was the brilliance of Steve Jobs, Rachel, he sat there and he thought "What is the best brand to enhance a customer experience? Who can we learn from?" They did not learn from another computer company, they did not study another computer retailing, they didn't even study a retailer when they first opened the Apple Retail Store, they studied The Four Seasons and the Ritz Carlton and those types of luxury brands. That's why, Rachel, when you walk into an Apple Retail Store anywhere in the world you will not find a cashier, there are no cashiers at an Apple Store, there is a concierge. In the back of the store you'll find a bar, it doesn't dispense alcohol but it dispenses advice, just like back at the bar at a Ritz Carlton.

The Apple Store actually has what are called Five Steps of Service, and I think these are very important for your listeners, Five Steps of Service which begin the very minute you enter the store. Apple Five Steps of Service, if you think of the acronym APPLE, A.P.P.L.E, I'll just go through them real quickly in 30 seconds. Approach with a personal warm welcome, OK. This is how the employees are taught to interact with customers, they need to approach the customer with a personal warm welcome. They need to Probe politely, which means ask questions to find out the customer's needs. Present the customer with a solution they can take home today, whether or not they buy a product. Listen for and resolve any issues or concerns, and End with a fond farewell. A.P.P.L.E, those are the Five Steps of Service, which I believe, this is Chapter 8 in the book, I believe that's the crux of it, I believe that that's the goldmine.

However, after I put the book to bed and I sent the manuscript in, I was at a Ritz Carlton, Rachel, and I saw a little card that the concierge was carrying and I looked at it. On the back were Three Steps of Service. Three, not five, there were three. Word for word from the Apple Store, word for word. And I looked at it and I asked the concierge, I said "When did the Ritz Carlton come up with these?" and he said "25 years ago." Ah! Who copied who? Another example of how the Apple Store was inspired directly from a hotel chain like the Ritz Charlton, also The Four Seasons, they studied both.

Rachel Salaman: And at the heart of your book lies the idea that if employees are treated really well they'll treat customers really well in turn, and that's how they'll build the loyalty. So can you tell us some of the ways that Apple makes its employees feel valued, feel like they're being treated well?

Carmine Gallo: OK, big picture, Rachel. It starts in the hiring, they hire people for personality and passion, so there is sort of a filtering mechanism there. Apple likes to say they value a magnetic personality as much as proficiency. I would go one step further, I would actually say they value a magnetic personality even more so than proficiency. Proficiency may be 10 percent of what they look for, they look for personality for the other 90 percent. So you already see the people who they hire already naturally are more outgoing, they're more likely to provide better communication and better customer service.

When you're hired at the Apple Store they do basic things, they give people discounts on products; not significant, I think it's 25 percent for one major product every year, something like that, and they don't pay people much more than they would get at any other retail store, so I think that's all basic. They now I believe just started offering full-time benefits to part-time workers who are only there 90 days, that's something new. So again they provide a basic level of foundation in terms of treating people fairly well, just in terms of the salary and the benefits that they get. However, on top of that they empower people, and I think empowerment is a very important word and it's a word that all companies need to understand. People don't necessarily like to be told what to do all the time, you know, and dictated what to do. I know there are certain industries that are very important and that it has to be done, like the military, for example, you need to be able to take orders. However, with knowledgeable workers and people who are being valued for their expertise and their communication ability the word "empowerment" is very important. So you need to empower your people to do what is right for the customer, and that is something that the Apple Store does very, very well.

If you want to spend one hour with somebody at an Apple Store, sales person, that sales person will not be reprimanded by a boss for spending too much time with you; the only thing they'll be asked is "Was it a great experience?" It doesn't matter, even if they don't sell you a product, that's the difference. There's a lot of pressure at other stores and other locations and all businesses, "Sell, sell, sell, make sure you sell that person a product. You spent 10 minutes on the phone, you didn't sell a product." You know, you get that all the time, Rachel. Apple Store, they don't feel that kind of pressure because that's not the point, the point is to build loyalty by helping you create a great experience and to put a smile on your face, so when you leave that store you're going to tell your friends what a great experience it was.

Rachel Salaman: One of the interesting points you make in the book about empowering employees at Apple is that sometimes they can even choose to replace, for example, an iPhone that a customer may have damaged, even though that's actually against company policy, it's outside of the warranty. So how can the company control costs if it allows its employees to make decisions like that which will affect the company's bottom line?

Carmine Gallo: You know, after I wrote that section that you are referring to I had second thoughts; maybe I shouldn't say anything about this. The point is that I have been told by people at Apple Retail Stores, by managers, that the policy is if you buy, let's say, an iPhone and it gets dunked in water or dropped in a toilet, because of your problem you broke a screen, that they are not supposed to replace it, OK? But the manager has also said "I can tell you as a fact that we've replaced iPhones that have been dunked in water or dropped in a toilet." The reason why is because, getting back to the word "empowerment", they are empowered to do what is right for the customer, what they feel is right. They're not going to do that for everybody who comes in, and there is a little back-lash. I do understand that at Apple they started really clamping down on that and making sure that people do not replace things that are out of warranty because it was getting a little out of hand, so they have to be careful as well.

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Rachel Salaman: Going back to the hiring process now, because you said that it's very important that they hire the right people, it's important to Apple that they hire the right people, and in the book you talk about how they look for fearless employees. What exactly do you mean by that? Is it perhaps linking back to the empowerment, its people who will take the ability to be empowered and run with it?

Carmine Gallo: Fearlessness is a term in additional to empowerment that I heard frequently when it comes to the Apple Retail Store. Fearlessness, very important word. Fearlessness means that you have an opinion and that you don't mind expressing your opinion. Not that you're rude about it, of course, I mean, they want people who are friendly and passionate, but the feedback loop is very important, there is constant feedback, that's how you improve customer service and improve the customer experience. Managers need to be fearless in asking for feedback and receiving feedback. Employees need to be fearless in receiving feedback and also giving feedback to their managers without a problem or the potential harm of being fired or having some damage done to your job. So they need to have fearlessness, but that needs to be cultivated by the management. If you do not hire people who can express their opinion, Rachel, then you can't create this effective feedback loop, and feedback is critical to improving and enhancing the customer experience.

Rachel Salaman: Now the book is full of conversations that you've witnessed on the floor of Apple Stores, which are fascinating, and you dissect them and pull out the learning points, and one of the passages is about the positive effect of multitasking that you've noticed. Can you talk a little bit about that?

Carmine Gallo: Multitasking I believe again is one of those very important words that I've heard frequently, multitasking. The average Apple Store attracts some 20,000 people every week. You cannot give people personalized attention one-on-one and spend a lot of time with them without what's called multitasking. You need to be able to juggle multiple people at the same time, and Apple trains for that. I believe some people can do it much better than others and some people, maybe they've just been better trained or they can multitask better. Some are better at it than others, but it means that if I'm a specialist or I'm a sales associate and I'm working with you on a particular product I can say something like "Rachel, while you're deciding between that 11 inch or the 13 inch notebook, would you mind if I helped this other customer who looks like they just want to check out this product and they want to buy the product and leave?" I'm asking you permission. You're going to say "Yes, of course," right, because we've already established trust, but they ask permission a lot. That makes you feel better about the conversation. So while you're checking you'll say "Sure, Carmine, not a problem," so while you are looking at the different computers I'm helping somebody check out because I've already assessed that it will only take 30 seconds or a minute to help this person check out. So now I'm giving personalized attention to you and somebody else at the same time, so that's multitasking, that's juggling. You have to do that when you get 20,000 people a week into a store.

Rachel Salaman: And how do you think that could be transposed to a different environment, let's say the customer service team in a nationwide logistics firm, how could they borrow some of those techniques from Apple?

Carmine Gallo: Well certainly multitasking, and also acknowledging people immediately and letting people know how long it's going to take before you get back to them, that's part of multitasking, that's what the Apple Store does as soon as you walk into a store. So that applies to major logistics or any companies, especially on the phone, okay, or if you're online or doing some kind of a virtual conversation, you're not face-to-face necessarily. People want to be acknowledged, so if you're on the phone you need to acknowledge people and tell them that you will be with them in approximately three minutes because you're finishing up another transaction. If people know how long it's going to be, they've been acknowledged and they know how long it's going to be until you get back to them, it significantly enhances their perception of the brand. That's what I learned and that's very important, and that obviously applies to a face-to-face transaction or something online.

There was another brand that copied Apple here in the States, a very large wireless brand, and they were inspired by Apple quite significantly. They learned, they did some focus groups, internal research, and they found that two people can enter a store; if one person is acknowledged and greeted immediately and told they will wait about three minutes for assistance, and the other person is not acknowledged, not greeted and waits exactly the same amount of time, exactly the same amount, who do you think, of those two people, when asked "How long did you wait?" will say "Oh, not very long at all, just a couple of minutes."

Rachel Salaman: The one who was greeted?

Carmine Gallo: The one who was greeted and told exactly how long they would wait. The other person, who is not greeted and not told how long they will wait, overestimated how long they were impatiently waiting. So it's very simple, very simple things like this. I'm even surprised someone had to take a focus group to figure that one out, Rachel. You have to study to come up with a conclusion that people should be greeted and maybe communicated to and told how long they should expect to wait? Anyway, these are the type of things that brands do, but this is something we've learned, and that particular brand was directly inspired to improve their customer service by Apple.

Rachel Salaman: And related to that, one of the things you talk about in the book is that in Apple Stores the employees seem to slow down the perception of time, this is kind of what you were saying there. Can you talk about how that works?

Carmine Gallo: This again is a more specialized skill, okay. I'd like to say that Apple gets it right more often than they get it wrong, but not every sales person can do this as effectively as it should be done. When you say or when I talk about slowing the perception of time, I've walked into an Apple Store, I remember walking into an Apple Store with my two little children, six and five, and this place was packed. I couldn't even see all the way down the store because there were so many people in there, and I thought to myself "There is no way that I'm going to walk into this store right now with these two little kids, fussy kids, in a shopping mall." Sure enough, they saw me standing there, they looked at my two little kids and they said "Would you like to come in and just play with our iPads? We've got some really fun movies on the iPad, there's a new Disney movie your kids would love." You know, the kids immediately... You see, they went right for my children because those are what are called the "secondary customers," the customers who can influence the decisions. So they weren't interested in what applications I want, they wanted the kids.

So my children were brought in, along with me, and they brought us directly to a table, even though it was packed, there was an open iPad, an open table, and they just said "Why don't you just take your time, take a look at these really cool, fun movies and apps for the kids that we have on this iPad. Spend as much time as you want." So here we were in the middle of this really, really jam packed store, and yet one of my children was watching a Disney movie and the other one was playing Cinderella Castle, there was some kind of coloring application on the iPad. Again I didn't know that all these applications were available until somebody showed us these applications. They had a great time, daddy had a great time, even though the store was packed. It's all about allowing you to touch and use and play with products and not pressuring you in terms of sales or getting out of the store, "Just sit there, play with these products as long as you want. If you have any questions we'll be around to answer them." That's about as high pressure as it gets, and that's part of just slowing down your day a little bit and getting you to enjoy and interact with our products rather than feeling even more pressured when you walk into the store. We're all pressured, we're all pressured these days at work, you don't need more pressure when you walk into a store.

Rachel Salaman: Another company that's famed for its excellent customer service is the online retailer, Zappos, and you say in the book that you've interviewed its CEO, Tony Hsieh. What does Zappos do that's similar to Apple and what's different?

Carmine Gallo: Oh, Tony Hsieh's a great guy. He is the CEO of Zappos and he actually endorsed "The Apple Experience," which I'm very grateful to him for doing so. Couple of things that they do very similar to Apple; he likes to say that Zappos is in the business of delivering happiness. In other words, they don't sell shoes, which is primarily what they do online, they sell shoes and clothes, but he doesn't talk about it in terms of selling shoes, he talks about Zappos and the idea of delivering happiness; what can we do online and when we speak to a customer to make that person happier, that's the vision. Well, think about what Steve Jobs' vision was when he started the Apple Store in 2001; it was not to sell computer products, it was to enrich lives. So you see the similarity in vision, one is to deliver happiness, one is to enrich lives, but neither of those have anything to do with the selling of the product necessarily, it's all about enhancing the experience. Also Zappos empowers their employees, like we talked about, Rachel, to do what is right for the customer, just like the Apple Store.

I'll never forget this story; Tony Hsieh, the CEO of Zappos, told me that he had heard of one of his customer service representatives on the phone who spent two hours with a customer on the phone. Two hours! Tony went up to that person and didn't even ask if they had made a sale, he just asked "Was the customer happy?" So you can do the same in an Apple Store, and I'm not sure how many people have spent two hours with somebody, but I've spent up to an hour with a customer service sales person at an Apple Store. You know, I'm a bad guy, Rachel, because I do it to test them, and every once in a while I have spent up to an hour and I've left there without buying a product, and I've asked the person "Hey, are you going to get in trouble for spending so much time with me?" And do you know what that person says, Rachel? "Nope, not at all. Did you have a great experience here? That's all we care about." Around the world, I've been in Japan, Paris, obviously across the US, at the Apple Store they speak the same language, which tells me that they're trained consistently in customer experience.

Rachel Salaman: So considering everything you've observed during your time in all of those Apple Stores, what three tips would you give someone who was looking to improve their customer loyalty, starting today?

Carmine Gallo: Start with a vision of enriching people's lives. Go ahead and look at that vision, enrich lives. What would you do, how would your business be different if you were not in the business of pushing products but you were in the business of enriching lives? So start with that vision, don't sell products, enrich lives instead, that's tip number one.

Tip number two, study businesses and brands outside of your industry. Apple looked to luxury hotels as an inspiration for the Apple Store. Perhaps you can look to the Apple Store for inspiration or a luxury hotel chain. So look outside your industry for inspiration and ideas on how to improve and enhance the customer experience.

And third, empower your employees to do what is right for the customer. That's a cultural shift, but really start thinking and talking to your staff about doing what's right for the customer, to make sure the customer has the best experience.

Rachel Salaman: Carmine Gallo, thank you very much for joining us.

Carmine Gallo: You're welcome. Thank you.

Rachel Salaman: The name of Carmine's book again is "The Apple Experience: Secrets to Building Insanely Great Customer Loyalty." I'll be back in a few weeks with another Expert Interview. Until then, goodbye.