Apple CEO Tim Cook and his management team aren’t in denial about the company’s discouraging financial performance. Consistent with the declining shipments of its new iPhone 5, it reported deflating profits in April for the first time in a century.
How did the company go wrong? It failed to listen to its customers.
One of the constructive things about social media is that it facilitates easy conversation between producers and consumers. It allows users to make comments on social networks such as Facebook (NASDAQ:FB) and Twitter that are offered genuinely and without incentive, increasing their value and accuracy.
This kind of conversation goes hand in hand with today’s most valuable marketing strategy: data-driven marketing. The technique requires companies to engage in dialogue directly with their customers, who offer up their opinions voluntarily. The outpouring of consumer feedback allows for a large sample size, and a company’s willingness to respond directly to its customers promotes more intimate and personal relationships between producer and consumer, giving customers the opportunity to recognize a company’s genuine interest in solving problems and meeting needs.
The key to data-driven marketing is listening to consumers, and that is where Fast Company argues that Apple fell short. When the company first launched the iPhone, social analysis made it clear which key elements were important to consumers: screen size, battery life, and connection speed. But Apple failed to tap into these widely-available social insights, and it’s now paying the price.