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The Psychology Of Selling And Why You Will Spend More Money With Apple

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You don't get to be the world's largest publicly traded company without understanding how to maximise income and revenue. With a market capitalisation of over $600 billion, Tim Cook and his team show no signs of stopping in the near future. Behind the success are a number of simple techniques designed to delight the customer into spending more money with the Cupertino-based company.

We Have Our Own Store...

One of Apple's biggest commercial advantages is the Apple Store. Once you step into its physical domain, the potential is there to turn you from a browser to a customer, and then from a customer spending a few dollars to a customer spending tens of dollars, and beyond. Forbes Sebastian Bailey has taken a look at the Apple Store floor, including the delightful acronym of APPLE stepped through by every employee... Approach, Probe, Present, Listen, End.

Don't forget, Apple's influence reaches out far beyond the Apple Store.

Jumping The Memory Chasm

The iPhone 6 and iPhone 6 Plus have finally bumped up the storage to 128 GB, matching the top-end option on the iPad Air. Apple  continues to have a good/better/best approach to its product line-up, but rather than go for the natural 32 GB / 64 GB / 128 GB line up for the smartphone, the base model remains on 16 GB.

Everyone is always looking for more memory, and keeping the lowest tier artificially low makes the middle tier much more attractive, and therefore an easier decision to spend more money. If the base model was 32 GB, I suspect the sales of the 64 GB models would be far lower.

The Apple iPad Range (image: Apple.com)

Working The Subsidy

Staying with memory and the three-tier approach, you have the iPhone 6, the iPhone 5S, and the iPhone 5C on sale. The iPhone 5C sits at the very lowest rung, with a relatively tiny 8 GB of storage. This allows the networks to sell an iPhone for 'free' on the back of a hefty subsidy on a two-year contract and acts as an on-ramp to iOS and the Apple cloud. 8 GB is not going to last long, so either the customer is going to be offered an easy up-sell to a 16 GB iPhone 5S or 6 for $50 in-store, or their next iPhone purchase is going to have a lot more storage.

iOS Updates For Everyone

If you look at the compatibility list of iOS 8, Apple continues to support older hardware such as the iPad 2 and the iPhone 4S. While this long-term support is commendable, it should also be noted that the tail-end of Apple's portfolio does not run iOS 8 with the grace of the newer units. You can get the latest OS, but the performance on the older hardware does suggest that you should consider updating the hardware as soon as you can.

Apple is stuck between a rock and a hard place here. Either they support the older hardware and have the performance issues, or they don't support the older hardware and get called out for leaving customers behind. Naturally Apple has chosen the approach that continues engagement with the customer and offers an additional retail opportunity.

The Benefits Are The Features

It's also worth looking at how Apple describes their hardware. How much storage is on each device is about as far as the numbers will go. The regular customer understands how much a gigabyte is, but that has taken time - remember how the iPod used to be sold by 'the number of songs it could hold'?

Apple speaks in non-threatening language as much as possible. Look for the speed of the A8 processor, how much RAM can be found in the latest handsets, or the capabilities of the graphics chip... and you won't find them on Apple's website or marketing materials. They're out there, but the numbers push people away from the experience Apple wants to create. So Apple simply does not show them.

Instead, the experience is key, and is something easily understandable. Edge-to-edge displays with an iMac, a single finger press to securely unlock an iPhone with TouchID, and the 'better by any measure' on the iPhone 6 which simply dismisses all the opposition without making any direct comparison. Apple encourages trust without having to make any comparisons.

And for everyone who does want to find out the numbers, the third-party interest online will satisfy your demand (and create some more free marketing for Apple in the process).

Delaying Your App Store Receipt 

Controlling the third-party app experience was not a new phenomenon for the iPhone (Nokia had a pretty good lock on the software and store experience with its second go-around on the N-Gage gaming system), but Apple's almost complete control of what appears on your smartphone guarantees the ability to control the perception of its hardware and what it can do.

Plus the thirty percent rake on any transaction made through your handset, which is not to be sneezed at.

Of course you get a receipt for your transactions in iTunes, but it never arrives just after you make the purchase. Even a ten minute delay between purchase and enjoyment of the content breaks the association between the two activities. And if downloading is not immediately thought of as a cost, then the inclination will be to download more.

The Box Is Already Open? I'll Take It Anyway

Many people shopping for an Apple product will be for a bargain so it's only natural that Apple will provide for them as well. Luring in the bottom of the web store menu is an option called refurbished. In here you'll find the latest hardware with discounts of up to 33% on the retail price.

While these products are refurbished, many are 'opened box' returns put through a testing process, and then handed the same 12 month Apple warranty as a new product and remain eligible for Apple care. If you're going to buy a cheap Apple, Apple would rather you bought it from them. Much like the 'short' cup of coffee in Starbucks, Apple is quietly catering for the customers who love to hunt for the special offers, without specifically calling attention to it.