Introduction to Episode 596 and the Psychology of Why People Buy
Melina Palmer: Welcome to episode 596 of the Brainy Business. Understanding the Psychology of why People buy. In today’s episode, I’m excited to introduce you to Ron Johnson, author of Shop Different. Ready? Let’s get started.
Announcer: You are listening to the Brainy Business Podcast where we dig into the psychology of why people buy and help you incorporate behavioral economics into your business, making it more brain friendly. Now, here’s your host, Melina Palmer.
Melina Palmer: Hello. Hello, everyone.
Melina Palmer: My name is Melina Palmer and I want to welcome you to the Brainy Business Podcast.
The Iconic Apple Stores: A Look at Their Unique Design and Ron Johnson’s Role
Do you remember when the very first Apple store opened or when one was available in your area if you weren’t shopping then? Makes me feel so old. You’ve probably been to one or seen one now as there are tons of them and they’re still so different from most of the other stores out there. Bright white space, big glass in the front, well lit. Even without the logo, you could probably instantly know what you’re looking at. My guest today is Ron Johnson, and he’s actually the guy who led the charge to create those iconic Apple stores. Ron was recruited by and worked directly for Steve Jobs while serving as a member of Apple’s executive team. Prior to his time at Apple, he was highly regarded for the work he did with Michael Graves to bring good design to all as a merchant leader at Target. Their collaboration set the stage for the brand’s hundreds of later design partnerships and cemented Target as America’s premier upscale discount retailer. He’s here today talking about his new book, Shop Different. Ron has had an amazing career at iconic brands and it was so much fun to get to read his book and chat with him about it today. You’re definitely going to love this one. Really quickly, before we get into that conversation, I want to be sure you know there are links in the show notes for my top related past episodes and books and ways to get in touch and more. It’s all on the app you’re listening to and at thebrainybusiness.com/596.
Ron Johnson’s Retail Journey: From Mervyn’s Stockroom to Leading Design at Target and Apple
Now let’s jump right in. Ron Johnson, welcome to the Brainy Business Podcast.
Ron Johnson: Well, Melina, thank you for having me on a brainy podcast. It doesn’t sound like I fit, but I’m gonna give it a go.
Melina Palmer: Oh, come on. I’ve read the book. I know you fit, but appreciate that. Well, for those who don’t yet know you though, can you share a little bit about yourself and the work that you do?
Ron Johnson: Yeah, I’m a lifelong retailer. I grew up in the Twin Cities, a suburb of Minneapolis-St. Paul called Edina. Went to public high school, went to Stanford and Harvard Business School. And then I had this crazy idea because I love stores to kind of become a retail guy. And I turned down some big jobs on Wall Street to go unload trucks at a Mervyn’s store. But I just wanted to do something I could enjoy for a lifetime. And if you’re going to do that, I kind of thought, what’s the hurry? The most important thing would be to understand what it feels like to be in everyone’s shoes as you lead, if you get a chance to lead someday. And so I had a chance to work in stores and ring on registers and move merchandise around and do all that stuff where the important work of retailing takes place. And I think that had a big impact on my inner voice as my career went on. And I look back fondly at my early days of my career. Oh yeah, I should say then, I’m probably best known for work I did at both Target and Apple. At Target, I was there in the 90s when Target and Walmart were kind of head to head. And this was before online shopping had really kicked in. It was kind of the battle of the rural low-cost behemoth and the suburban, trendy, you know, more fashionable store. And I helped put Target on the map with some design initiatives which were great. And then that got the attention of a West Coast company that wasn’t doing very well called Apple.
Building Apple Stores: Ron Johnson’s Vision and Transition to Leading Retail at Apple
And their CEO Steve Jobs wanted to open stores and he asked me to come on, talk to him about it. And that changed my life because I decided to join Apple and I had the privilege of being the first retailer at Apple and was tasked with creating the Apple Stores. Did that for a dozen years. Then went to do one more thing and went to JCPenney and made an attempt to transform the department store. But I kind of discovered that the team there wasn’t as interested in transformation as I was. And I didn’t manage that very well and it was a very difficult experience. But I’ve had a lot of unique, you know, chances to, you know, impact the retail industry and it’s been a super fun career and I decided to write a book about it and I have a book coming out in September. So that’s enough about me that people probably need to know. But that’s a quick bio.
Melina Palmer: No, I hope that’s not enough. We’ve got, you know, at least 20 more minutes. We’re going to be chatting about you, but there you go. Well, I know. I also, in reading through the book, you know, I don’t know if I should be thanking you or, you know, cursing you for having three children that love going into Target now into the toy section. We can now know this is—it’s your fault. They love those areas of Target so much. Right. And being able to find stuff.
Ron Johnson: No, that was my first job at Target.
The Power of Specialization: Ron Johnson on Becoming the Best Lego Toy Buyer at Target
My first job at Target, I got to be the toy buyer. And it’s kind of—it was a really super fun job because who doesn’t love toys? Ah. And they’re a really interesting category to buy because, you know, half the business happens in five weeks from Thanksgiving to Christmas, when people are stocking up for the holidays. And so you gotta be really razor sharp on your choices, your selection, your inventory management. And, you know, it’s a really interesting category to buy. And I learned a lot doing that. It was a great first introduction to Target.
Melina Palmer: Yeah.
Melina Palmer: I don’t know if you can see I’ve got at least one visible LEGO behind me. I guess there’s another. My LEGO DeLorean up here from Back to the Future. And I’m a big LEGO fan. And so it was a really—I liked the perspective you shared about having LEGO in the toy aisle, and how like really going all in on something where other people maybe weren’t doing that. Can you share a little bit about the philosophy there and things that businesses can learn from that?
Ron Johnson: I’d love to.
Creating a LEGO Destination: Ron Johnson’s Strategy to Transform Target’s Toy Business
You know, one thing I try to do when I take over a merchandise area—if you know anything about retail, it’s broken into two ways. There are stores, and, you know, there’s a store leader for every store. And then within the stores, though, you have buyers or people responsible for what merchandise you pick and how you market it and how you price it for all these different categories like toys and kids apparel and home and women’s apparel and food. And, you know, I always, when I took over an area, I wanted to do a great job buying, which is selecting the items. But then the question was, what could I do that would permanently change how Target competes? If I could do something bold—and, you know, at that time, the big place where 40% of toys were bought was Toys “R” Us, and they had everything. And discounters like Target and Walmart and Kmart, they had a small selection of lots of things. And when I got in there, I looked and I said, well, LEGO, it’s a very profitable category. Right? But they had so many wonderful sets. And what if we carried every set LEGO had? And it was a time when specialty retail was really taking hold in America. And specialty retailers made a commitment to a category, whether it was Abercrombie with their approach to teenage boys and girls or The Gap with their basics. And I said, well, why can’t we make a commitment to something like LEGO? And, ah, instead of carrying 20 feet of LEGO, we carry 48 feet and we put in every set and we created this whole aisle. It was like a LEGO store within a Target store. And then we even displayed under Plexiglas or in glass all these really cool large sets like you’d see at LEGO World. They weren’t that big, but it really got you the idea of, this can be a great category to stimulate some child’s mind and it could be fun for the parent to make the toys with them. And you realized at that time with LEGO, you’re selling to a child but also to a parent because it’s a toy that’s going to help you construct something. And you get this great satisfaction having to follow instructions and start by organizing your LEGOs and you build something, you’re done. You can put it in the room or put it somewhere in the house. And it’s really gratifying. And I just had this idea, what if Target became the best place in America to buy LEGO? Not just a place to buy LEGO, we had everything. And at the time that was pretty bold.
Target’s Toy Business Success: Leveraging Niche Categories to Drive Overall Sales and Customer Experience
And we did that in a few other toy categories too. And Target’s toy business was amazing during the two years that I ran the toy business, um, yeah.
Melina Palmer: And looking at even just the psychology
Melina Palmer: behind the decisions when you, as I read about it in your book, this like—so for one piece being you think about at the holidays and stuff where you’re saying that’s like you have LEGO and the like not quite LEGO, right? The knockoffs that were there. And it’s like those were left over because—and it’s not like people were buying those of like, “Oh good, I really wanted this not-really-a-LEGO for the kids.” It’s like that was all that was left. Right? So what if instead of devoting space to the thing that people don’t necessarily want, we’re becoming that destination and then realizing like you’re saying, it’s like, so if the LEGO brings them in, then they can go and they’re going to get the wrapping paper and the tape and the bows and the other little trinkets and candies or whatever else that you’re needing around that holiday time. Buy the candy canes and these other items and it becomes the shopping trip. And everybody talks these days about, you know, it’s like you go to Target for one thing, right? And you never just leave with—three carts later, you know, you’re walking out of Target.
Ron Johnson: Well that’s Target.
Target’s Evolution: From Discovery to Specialty Retail and the Call from Steve Jobs
Target at its best during its glory years, and they’re getting back to it—I think they’re really making progress again—it was a place to discover things you didn’t expect to buy. The Target one was really fun. You’d walk through your basics, then you’d find something unexpected. And that was Target’s strength back in the 90s and for a lot of years.
Melina Palmer: Right? Yeah. So coming from Target, you get the call to go do an interview. Not many can say that Steve Jobs called and asked them to come have a meeting and bringing them in. Share a little bit about that transition to Apple.
Steve Jobs’ Vision for Apple: Revitalizing the Brand Through Innovative Retail and Market Strategy
Ron Johnson: Well, you look back now, you go, wow, that was a big moment. At the time it wasn’t quite as much—just to really paint the picture, because Steve had returned to Apple after being away for over a decade. He was kind of in the wilderness creating NeXT, and he also created Pixar. He bought Pixar and started to make digital movies, which was a big thing. But he got invited back to Apple because Apple had 30 days of cash. This company that had been around for 25 years, that was a cult-like brand with a very loyal niche following, was running out of money, and Steve had to save the company first. And he launched a great product called the iMac, which was on the cover of Time magazine. But it didn’t change the game because it appealed to the Apple customer. And Apple had a—what Steve concluded after the iMac didn’t really change anything for Apple was that his biggest weakness was how they went to market. And because Apple had such low market share—Microsoft had 95%, Apple 5%—Best Buy didn’t carry Apple products. Circuit City didn’t carry Apple. Apple was at Sears, you know, next to vacuums, you know.
Melina Palmer: Yeah.
Ron Johnson: And, you know, you kind of get it. You know, that’s a store without a heartbeat. You know, they could have sold defibrillators maybe, but not Apple product. And, but you know it was—they had a very poor go-to-market. So Steve concluded, even though it was the dot-com peak and Dell was winning selling computers online, that if Apple had a chance to win, it had to go hand to hand with the customer and really influence the buying experience. And, you know, I decided to go out and talk to him because I knew enough about Apple. You know, I didn’t know that much, but I knew it was a great brand. And I just helped bring design to Target. You know, I had done this partnership with a guy named Michael Graves, which had a really positive impact on Target.
Joining Apple: Ron Johnson’s Bold Decision to Work with Steve Jobs and Build Iconic Stores
And I thought, if I could figure out how to get the people to buy design at Target, what’s so hard about getting someone to buy an Apple computer? So I went and talked to Steve, and most people thought I was absolutely crazy. Why would you leave Target to go to Apple? Why would you leave a company that has a reputation for building great careers to go to a place where someone’s going to fire you in the elevator? You know, because Steve had a reputation at that time that was pretty hard to work for. But I decided I wanted to go meet him. And after three hours on a beautiful November night, sitting in a conference room talking about it, I thought, wow, I could learn so much from this person, and it would be a great challenge to try to build stores side by side with him. And I made the decision to do that. And it probably was the best decision of my life from a career perspective. And sometimes you make bold decisions that turn out really well, sometimes they don’t. This one turned out great.
Reflecting on Career Decisions: The Impact of Early Experiences on Ron Johnson’s Retail Philosophy
Melina Palmer: Would you say that was the best decision, or is it going to work in the stockroom at Mervyn’s?
Ron Johnson: That’s a really good question. Well, if I didn’t go in the stockroom, I wouldn’t have been invited to work at Apple.
Melina Palmer: Right?
Ron Johnson: So you’re right. No, but that’s what’s interesting, as you know, because you’ve written three or four books. I think you’ve written three books. You got a fourth one coming, is that right?
Melina Palmer: Fourth is in the works, huh.
Ron Johnson: It’s in the works. But when you write a book, the beauty of it—it forces you to really reflect on not just what happened in your career, but why did you make the decisions you made? And when we launched the Apple Stores, I think people would say they’d never seen a store like it before. It was so different. But if I look back at every decision we made, it was informed by something in my personal geography.
Reinventing Retail: Steve Jobs’ Drive to Create Unimaginable Shopping Experiences at Apple
Whether it was my childhood, my mom, my time at Mervyn’s, you know, unloading trucks. You know, all those things add up, and they have an impact. And especially with someone like Steve, because Steve didn’t ever want to look at what other people were doing and say, let’s go do something like them. You know, he wanted to create something from scratch and kind of reinvent, you know, like just like the phone, reinvent the smartphone. You know, let’s create an entirely unimaginable shopping experience for people and just figure out what would make this so great that people would have to come to the store and have to buy. And that’s kind of what we did with the Apple Stores as best we could.
The Apple Store Experience: A Distinctive Approach to Technology Retail in Shopping Malls
Melina Palmer: Yeah, I remember when the first Apple Store came to our area, which was at the Westfield Shoppingtown Southcenter here in Washington state, and it was this like, totally amazing reveal. Different than anything where it’s so like bright. Probably across from Abercrombie, actually, as I think about that now, because that was what the mall was all about back then.
Ron Johnson: Yeah. It was about apparel. It was about specialty apparel. Exactly. And some home goods and some, you know, Williams-Sonoma and Pottery Barn and a few others.
Melina Palmer: Right. And just this—but so different of an experience. And it was quite really cool to read through this. You know, if it had been the computer people selling the computers, you have a very different experience than what you were able to create.
Overcoming Tech Fear: Ron Johnson’s Unique Perspective on Selling Apple Products to Non-Tech Users
As someone who was not a computer person at all, I’m guessing you might be the only person that can say the very first email they ever sent was to Steve Jobs and that he immediately replied. I bet that—
Ron Johnson: Well, I guess I’m the only one who had had the idiocy. When Steve said at the end of our interview, “Ron, you know, let’s get together in a couple of weeks,” I said, “Great.” He said, “In the meantime, why don’t you think about if I were to give you this job, what you’d do, and send me an email.” I said, “I don’t have a computer. I’ve never sent an email.” Because I didn’t! Now, I was working at Target, but we didn’t—we used the telephone. At that time we had mainframe computers and stuff, but we didn’t use PCs and I didn’t have one at home. But it turns out half of America didn’t have a personal computer. And what made me probably the right choice for Apple was the fact that I was a technology-light guy and Steve was a technology-heavy person, as was everyone at Apple. But I understood that the real challenge for the stores was not to show someone a Mac. It was to overcome the customer’s fear of technology. Because at this time, of the 50% who had a computer, Windows had won. I told Steve, “Windows won the first half, but the second half, why can’t Apple win?”
The Contrarian Bet: Placing Apple Stores in Malls to Create a Technology Destination
And he had been thinking that we should really target creative pros. But he then said, “Wow.” He goes, “Yeah, well so if we were going to go after everybody, where would we put stores?” I said, “Malls like the one you shopped at.” You know, and you know, we ended up doing that. That was a very contrarian bet because malls are expensive, and you know, why would you put a product in a place that you go for frequency? You know, people buy lots of clothes, you know, they love to just browse clothes. You know, a computer you buy every four years. Why would you pay for that expensive real estate? But we did, and our store became the busiest store in the mall because it gave people something different to do. You know, everybody in the—everyone in the mall, there are lots of places to go shop for apparel. There was one place that could shop for technology. And this was when the internet had just come out and Wi-Fi had come out, and most people just came to the Apple Store to meet a friend, and they could search the internet while they waited for someone to get there, and then they’d go shop somewhere else. But the store was busy and they were getting their hands on the Mac.
Melina Palmer: Right. Getting comfortable with it.
Ron Johnson: Getting super comfortable that this is a really cool store, this is a really cool product, and it’s so easy to use. And eventually it became time to buy a Mac.
They said, “Well, why wouldn’t I consider one of those Apple products?” And we weren’t in a hurry because, like you said, we didn’t hire salespeople because we thought if you had really tech-heavy people trying to sell too hard, it would turn off that customer who’s scared of technology. And let’s just trust that if we do a great job and make them welcome, when the time comes they’ll buy. And they did. But it was—we were very patient about that.
Human Connection in Retail: Empowering Employees to Build Trust and Overcome Customer Fears
Melina Palmer: Yeah. And it was a really good investment I think in the social proof aspect of being able to see someone like me understanding this. Right? So you’re talking about how the different staff—that you don’t want like just super techie people, right? But it’s like another, I’m going to say like a grandma that learned how to do this and is able to sell, and a kid that’s in college that’s able to talk about how they’re using it at school, and someone—I can find another teacher or someone who cares about—that has been just doing sketching, but wants to try to, you know, do art or other sort of artistic things on the Mac. And so finding someone like me who says, “Oh, yeah, I felt the same way. And once I figured this out, like, look how cool this is,” right? They get to show somebody, and then it feels exciting. And even having, like you’re saying, setting up phones for people eventually, and they get to call and say, “I’m calling from my new iPhone,” right? And everybody’s excited, right? And you get that help to get over the fear and knowing, like, investing in classes, like all these things that were so necessary early on that you don’t necessarily need as much anymore because people get it.
Melina Palmer: Right.
Designing the Apple Store: Balancing Product Display with a Comprehensive Customer Experience
Melina Palmer: Can you tell a little bit more kind of about the process or questions you asked, like things you went through? I really appreciated—so I wrote down a line. You know, you had this “Good enough isn’t good enough.” And where there was a point in realizing that the direction you had for the store might have been good enough, but it wasn’t what it needed to be so it could become—can you share a little bit about that?
Ron Johnson: We had to design the store first, and then we had to develop a customer experience, and they kind of go hand in hand. But as we designed the store, we were building a store that was really quite unique. It was in a mall. It was way bigger than it needed to be because we only had four products. You could fit them on a conference room table. As Steve showed me, “There they are.” I said, “That’s it? You have four products?” And I said, “Is your brand as big as The Gap?”
The Digital Hub Vision: How Steve Jobs Redefined the Mac’s Role in Personal Technology
He said, “Bigger.” I said, “Well, we should build a store like The Gap that size, because otherwise no one will take us seriously in a mall.” And he said, “Okay.” And so we had all this space, and we devoted half the store to people buying a product and the other half to people when they bought, after they bought, to come back and learn and take classes and go one-to-one with people like creatives and come get help at the Genius Bar and all these things, because we knew that if we were to get someone to buy a product, we not only had to get them to buy, we had to get them to love it, right? And so we wanted them to come back, and we knew that would help sell the product. And it was kind of one of these unusual things, but we did that. And then, as we built this store, and we had been ready to go with half to try and half to own, but then Steve walked in one day after a conversation we had had and said, “I’ve got the future of the Mac. We’re going to make it the center of your digital life. We’ll call it the Digital Hub.” And Apple would be the first one not just to help you get on the internet, but—you can take a picture with a camera, and this is before digital cameras were a thing, and you could import it to the Mac and you could edit it, and you could share it with a friend. That was a new thing. And then you could put all your music in your pocket by buying a music player and using a piece of software in the middle called iTunes, and organize your library. And you do that on the Mac. And same with making movies. And the Mac would be at the center of everything you did that would be creative and personal and fun beyond just surfing the internet. And when Steve came in with that vision, we were ready.
We had finished designing the first generation of the Apple Store, but I woke up and I thought, wow, if that’s the vision for the Mac, our store is all wrong. Because we had organized the store around our computers. We have portables over here and desktops over here. But what if we organize the store about how to make movies, how to do digital photography, how to enjoy music? Well, suddenly the store had moved from being this tech store to this lifestyle store. It’s kind of what you love in a mall. It’d be a place to discover how to enrich your life through a store experience. And we could take customers on rides. And it sounded really fun to me. And I went in that morning, as we talked about in the book, and Steve looked at me. He said, “What’s wrong?” I said, “I didn’t sleep very well. I realized with your vision of the Digital Hub, maybe we got to change the store.” He said, “What do you mean?” I explained it to him, and he said, “Do you know how big a change that is?” And I said, “I probably haven’t thought it all through, but it’s a big change.”
The Courage to Redesign: Steve Jobs’ Philosophy on Hitting Rewind for Product Perfection
He said, “Do you know how hard I’ve worked with you to design this store? We’ve been working at this for six months, every Tuesday for four hours. I don’t know if I have the energy to redesign the store. So you might be right, but don’t talk about it today,” because we were heading over to this design meeting for four hours with my team. And he’d come every Tuesday. And we drive over in the car. It’s super quiet. He’s not talking at all. Very unusual for him. He’s not a big talkative guy, but we would chat about what’s going to happen this morning, and I guess we’d already had our talk about what’s not going to happen. But we walk in and there’s these 15 people. We’re a few minutes later than we would normally be. And he walks and he stares at the store and it’s all done. And he looks and he said something like, “You know, hey, well done, guys. We figured out how to design an Apple Store.”
He points to me, “But Ron says we’ve got it all wrong. And he’s right. So I’m going to leave right now, and Ron’s going to tell you what’s wrong, and you guys are going to redesign the store.” But before he left, he said, “But I want to tell you a story.” He was a great storyteller. And he said, “Everything great I’ve done in my life, I’ve had the courage to hit the rewind button. It’s typically not when you want it, it’s when you’re about ready to go. But you have to do that because you only get one chance to do something like open a store.” And he had learned that lesson with Pixar with Toy Story. You know, you get to the end of the movie, it’s ready to go, and you realize a character could be better and really change the arc of the story. And, you know, Steve, you know, cared about doing things really the best he could. And so we redesigned the store, and that was a big moment, and it delayed us by six months, but it allowed us to create the Apple Store that people end up loving. But what’s interesting is most of those things you talked about, going for training or personal setup, those ideas came from our employees in the field because we said we could try to imagine how to sell a computer to all these people in the world, but what if we just set up a system where our employees would greet everyone with a warm welcome, ask them why they came to the store today, try to solve that problem, and when you’re done, end with a fond farewell, but then have all of that conversation with customers, encourage the employees to say, “Here’s what might be a great way to sell a Mac.” And so one day—and where I grew up in Minneapolis, the team said, “You know, what if we set up their computer before they left?”
From Wheel-Outs to Setup: The Minneapolis Team’s Innovation in Customer Tech Education
You know, we thought we were good because we would wheel it out to their car and take this big box, like for an iMac, and open the trunk, and weren’t we good, you know, we walked you out of the store, you know, didn’t make you do it on your own. But the Minneapolis team said, “What if we open the computer in the store and taught you how to set it up?” And it could take an hour, but you walk away not with a product you bought, with a product you know how to use. And give people some tips. If they came in because they wanted to do photography, show them how they could do photography on the computer before they left. Wouldn’t that be great? And all these ideas really came from what our teams learned trying to enrich customers’ lives. And we had a great way to share ideas because I knew every store leader. Every store leader met, because I met them all before they started. And every store leader met every employee before they started.
And so every employee on a floor knew someone well who knew me well, and I worked for Steve. So you think of this global company, when I left, 60,000 employees, and everyone was two employees away from Steve Jobs. That’s pretty amazing. And that’s one of the big lessons I think about business. Everyone thinks you get big, you gotta be bureaucratic.
That’s just not true. If you make the right decisions, you can stay quite connected. And one of the greatest things I get to do, I go visit stores. Just my walk of life. I was in a store in Williamsburg, New York this week, and they kind of recognize me still when I walk in, even though it’s been a long time. But I probably met in that store five people who had been there now 15 years ago when I was leading the stores. And they wanted to chat about some experience they had with me while they were working. And it’s pretty amazing that this many years later—so often we think these stores are just busy and there’s no personal relations. The human connection is the most important thing that we do every day, you know, and it’s a chance to really have an impact on people, that you can turn moments into memories if you really take the time to do them. Great, right?
Reciprocity and Kindness: The Core Philosophy Driving Generosity in Business and Life
Melina Palmer: Yeah, definitely. And I think that’s a really good transition too. So in behavioral science we have a concept of reciprocity and that giving to others, they’re likely to give back. Obviously it’s not, you know, totally novel and behavioral science is the idea of it, but in the title there’s a whole thing about—
Ron Johnson: Well, there’s this book, I think the first three words were “In the beginning,” that talked about, do unto others as you have them do unto you.
Melina Palmer: Right. In this case too, it’s like, but being kind, thoughtful. So I end every episode of the Brainy Business with “be thoughtful.” Reciprocity is one of my very favorite concepts. And it’s saying, like, just give generously, give often, and know the universe is going to pay it back somewhere.
Right? Like, that is always like leading with that. And so of course there’s a lot of that same idea coursing throughout the Shop Different book. Can you share a little bit about that philosophy and how that led into like some things you didn’t charge for and, like you said, how you think about employees and all that, as we kind of wrap up the conversation?
Ron Johnson: Yeah, just wrap up. It’s a beautiful story. Steve asked me one day early on, “If you had to describe our customer service philosophy, what you imagine in four words or less, what would it be?” And I said, “It’s very simple. We’re going to love our customers.” And he kind of said, “We’re going to love our customers?” You know, he goes—I said, “Well, that’s what you do, Steve.” He said, “I don’t love our customers. I design great products.” And I said, “But when you love someone, not in a romantic sense, but in a human sense, you identify their needs and you try to secure their good. So your number one priority in designing a product is ease of use. Every time you do on that, you’re doing that to secure the good of the user. That’s an act of love.” And I said, “As we walk through life, you know, the most important thing is to look at whoever’s in front of us and what is it they need today? How can I help?” It’s a question you satisfy, not, you know, “What can you do for me?”
Securing the Good: The Contagious Power of Kindness and Addressing Customer Frustrations
“What can I do for you?” You know, “I’ve hired you, how could I help today? What do you need?” You know, it’s all about how do you secure the good of another person? And when you do that, it creates this multiplier effect because being kind, being helpful is absolutely contagious. And when you’re working in a store and you see everyone running around helping people and doing this and smiling and doing all these unexpected things, it’s contagious. And that’s when people do things that don’t seem to make sense from a business perspective because they can be expensive, but they’re the right thing to do. So one of the times—one of the, in our fourth-generation iPhone, the iPhone 4, it was the first one that had all-glass front, all-glass back. And it turns out it was a beautiful design, great product. But one of the problems was the antennas didn’t work very well, and that’s a separate story. But another one is if you dropped it and it slipped out of your hand really easily, it would crack. But the whole product is about the display. And if you can’t use the display, you don’t have a working product. And I concluded, and our teams concluded, this was really hard. Customers were really frustrated. They’d go, “How much is it going to cost to get it fixed?” It was the price of the phone almost to replace the screen—it’s $200 to fix a screen. And all it did was slip out of their hand. And I just thought, this is on Apple.
We’ve got to design products that don’t break so easily. And so we started just to repair everyone’s phone for free. And, you know, it wasn’t very popular within Apple because it was expensive. And most people said, “They can just buy a case, that’s their fault. You have a lot of cases, Ron. Just tell them about a case.” Well, that doesn’t sound very good when someone’s standing in front of a Genius with a broken phone, and they’re not the only one. There’s about three others at the bar with the same problem. And I just concluded that the best way to get Apple to design a product that worked better was to give away these cracked screens.
Empowerment and Doing the Right Thing: Learning from Ritz Carlton and Creating Positive Customer Experiences
And eventually Apple’s phones worked pretty well, but we just kind of did the right thing. And we did that all the time. Our employees were empowered and we learned that from the Ritz-Carlton, because at the Ritz every employee can spend up to $2,000 to make a customer experience right.
Melina Palmer: Right.
Ron Johnson: Well, I guess it was. We spent a lot of money on those broken phones because we had lots of them. But, you know, I just think, you know, when you do the right thing, you know, good—that’s back to, like you said, reciprocity. That was your idea.
Melina Palmer: Yeah.
Ron Johnson: Or psychology’s idea and psychiatry’s idea. And I think there’s truth to that.
Melina Palmer: Yeah, I love it. Well, I, as I said going into this, I know you and I could chat for days, not just hours. And I look forward to us hopefully getting a chance to chat again. For everyone who is now so excited to get their copy of Shop Different and to, you know, maybe follow you, learn more, you know, what are their best paths to do so?
Ron Johnson: Yeah, so the book, you know, September 22nd is the launch day. And it’s available at all your favorite bookstores. You can go online and preorder it now if you want. But you can also go to ronjohnsonshopdifferent.com.
It’s a website we created for the book. You can download the prologue if you want to read something, just to see what it’s like. But you learn about the book, and I think when our podcast goes live, you’ll be able to see that it’s live on there. So if you want to learn more about it, that’s a great place to go.
Melina Palmer: Perfect. And we’ll have links in the show notes to make it easy for everyone, so they can get their copy and just—thank you again so much for joining me on the show, Ron. It was really delightful to chat with you.
Ron Johnson: The pleasure was truly mine. So thank you for being such a great host, Melina.
Listener Takeaways: Melina Palmer’s Reflection on the Impact of the Apple Store and Ron Johnson’s Philosophy
Melina Palmer: Yeah, thanks. Thank you again to Ron Johnson for joining me on the show today. What got your brain buzzing in today’s conversation? For me, it was so cool to have a chance to talk to Ron. As I said in our discussion, I remember when the first Apple Store opened in my area and the anticipation of it coming to fruition near us and going to see it with my friends right when it opened, it was such a cool place to be, and you knew it was historic.
When I went to college, I took advantage of the student discounts they offered and got a Mac laptop, which I used for years and loved. I remember using iTunes for the first time and loading up my Shuffle. The buzz of that store in those early years was different than anything else that really anyone had seen. And I’m so in awe that I got to talk to Ron about what it was like to build out those stores. I let him know that I felt like we were truly kindred spirits when reading his book and about his philosophies.
As we said in our conversation, reciprocity and leading with kindness is so key to everything we do here at The Brainy Business. And it’s definitely something that’s apparent in his work and the philosophy to love customers that he brought to Apple. They lived that in the experience and the design and by reducing friction and so many other cool ways. It was really interesting to see the threads along his career as well, to see the path from turning down Goldman Sachs to work in the stockroom at Mervyn’s and working up to Target and what he created there before going to Apple.
Melina Palmer: And even though it didn’t work at JCPenney, to share the learnings from something that didn’t come out the way you planned is really amazing for someone to do. He was willing to show the importance of context and trusting your gut and trying things even when it feels scary and knowing that a lot of times, you know, it did work out.
Melina Palmer: He did amazing things and there are still always opportunities to learn. This book had so many great lessons in it and it also has a lot of that inside story of what it was like working alongside Steve Jobs for 12 years, what it was like building the toy department at Target in the grand era of holiday toys and department stores before online shopping. It’s nostalgic and informative and I hope you check it out and of course that you enjoyed the conversation.
Melina Palmer: Ron says that he loves retail. He loves the shopping experience and seeing the various displays and how stores do things. And in the book he shared several displays he remembers even from when he was a kid.
Call to Action: Share Your Memorable Shopping Experiences and Connect on Social Media
So I’m curious, do you have a shopping experience or specific store you remember from your childhood, your teenage years, or even as an adult? Whatever it is, love to hear about it. Please do come share it with me on social media. You’re going to find me as @TheBrainyBiz pretty much everywhere and as Melina Palmer on LinkedIn. There are links in the show notes to make it easy as well as links for my top related past episodes and books, including Shop Different, ways to get in touch, and more.
It’s all waiting for you in the app you’re listening to and at thebrainybusiness.com/596. And thank you again to Ron Johnson for joining me on the show today. It was a delight to chat with and learn from you. Join me next time for another brainy episode of The Brainy Business Podcast. It’s going to be a lot of fun. You don’t want to miss it.
Closing Thoughts: A Reminder to Be Thoughtful and Thank You for Listening
Until then, thanks again for listening and learning with me and remember to be thoughtful.
Announcer: Thank you for listening to the Brainy Business Podcast. Melina offers virtual strategy sessions, workshops and other services to help businesses be more brain friendly. For more free resources, visit thebrainybusiness.com.
