Smart or Stupid?

One of the original Smartphone makers gets chewed out by Laura Ries for not being so smart...

Crazy for Consumers? RIM is insane.

Mike Lazaridis, one of the two chief executives of Research In Motion, is baffled and defensive. In a rare interview, Lazaridis complained, whined and spent more time asking questions than answering them.

“Why is it that people don’t appreciate our profits?

“Why is it that people don’t appreciate our growth?

“Why is it that people don’t appreciate the fact that we spent the last four years going global?

“Why is it that people don’t appreciate that we have 500 carriers in 170 countries with products in almost 30 languages?”

To make matters worse, the exasperated Lazaridis ended with: “I don’t fully understand why there’s this negative sentiment, and I just don’t have the time to battle it. Because in the end, what I’ve learned is you’ve just got to prove it over and over and over.”

Lazaridis is right and Lazaridis is wrong about RIM’s problem.

He is right because RIM, the maker of the BlackBerry, has been on a roll. It wasn’t nicknamed the BarakBerry for nothing. From the President in the White House to business people around the world, BlackBerry is the preferred phone.

During the last fiscal year, Research In Motion shipped a record 52.3 million phones, a 43 percent increase over the previous year. And RIM’s fourth quarter income of $924 million exceeded forecasts.

He is wrong because RIM has made many marketing mistakes. If you have to prove anything over and over again, you are doing something wrong. Repeating the same thing over and over again and expecting a different result is the definition of insanity. And RIM’s recent marketing moves have been insane.

What is RIM doing wrong? Why don’t people appreciate RIM’s BlackBerry brand, profits or growth? Because they are fighting the wrong battle. They are focused on the wrong target. BlackBerry has been chasing the consumer instead of chasing its less-sexy business customer.

Why it is that companies that have great success and profits with business clients feel the need to ditch them for the fickle, finicky and thin-margined consumer?

Dell has been making the very same mistake for years. Instead of staying focused on businesses, they continue to spend time and money chasing consumers. Consumers who will never think Dell is cool.

Cisco learned the consumer lesson the hard way, too. After buying Flip cameras for $590 million in an attempt to be cool, they are shutting Flip down. It didn’t work, Flip didn’t make Cisco cool, nor did it make them much money. Compared to enterprise networking systems the Flip profits likely looked too slim to make it worth continuing.

The reality is the business market isn’t cool or sexy, but it can be extremely profitable. Just ask Cisco. The business market also works very differently than the consumer market. Consumers are less loyal and always looking for the next new thing. Business users are extremely loyal and like to keep the same product or software for as long as possible, sometimes even if it is inferior.

BlackBerry has been chasing consumers with an array of new phones with touch screens and other flashy features. New, different and flashy is exactly what business consumers don’t want. Flashy and sexy turns off business buyers.

Not to mention that fighting the sexy war is a losing battle. If BlackBerry is going to compete on beauty, Apple is going to win every time.

You can’t beat or even compete with Apple on the cool “it” factor. The only way to succeed is to avoid Apple and do the opposite by stayed focused on your core customers.

For BlackBerry, the core customers are corporate users that value security above almost all else. Consumers who post every dumb photo of themselves online could obviously care less about security. But every company does. And with more and more business communication taking place via phone and email, security is going to get even more important.

But if RIM wants to get credit for BlackBerry’s successes and wants to continue to thrive in the future, it needs to refocus on security and business. If they let their brand erode too much longer, they risk losing their leadership as well as their luster the way Dell did.

No business could take a $50 million Dell contract seriously after they launched the “Dude, you got a Dell” commercials. BlackBerry is in the process of making the same mistake.

There are some other fundamental issues with RIM’s marketing that are problematic:

1. Why the double-naming?
Research In Motion is a long and meaningless name. And it usually gets shortened to the even worse-sounding “RIM.” The company would be better off just calling itself “BlackBerry.”

2. Where is the powerful visual?
Apple has the “Apple.” Android now has the “Robot.” Blackberry has some weird dots that nobody understands or even uses. Never underestimate the power of a visual.

3. Why not focus on three aspects of its core market?
Business. Security. Email. It doesn’t mean RIM can’t sell anything to consumers. It doesn’t mean RIM can’t add cool features like cameras or touch screens. It doesn’t mean RIM can’t launch a tablet. But it does mean that anything RIM does should be tailored to what the business customer wants and needs.

All brands need to stay focused on the battles they can win. Not the ones they can’t. RIM needs to forget about being cool. Ugly can be great and very profitable.

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