Apple Pay: A Customer Experience Lesson

The trick to staying ahead of the competition is by better listening to and serving our customers.

When Tim Cook first introduced Apple Pay in September of 2014, he said, “It’s all about the wallet. Our vision is to replace this. And we’re going to start by focusing on payments.” And wow, what a business that promised to be.

As Mr. Cook said at the launch event: “Payments is a huge business. Every day, between credit and debit, we spend $12 billion. That’s over $4 trillion a year and that’s just in the United States. And this business is comprised of over 200 million transactions a day. That’s 200 million times that we scramble for our credit cards and go through what is a fairly antiquated payment process.”

Apple has begun to make progress against this goal. It has succeeded at bringing improvements to the payments landscape, including a higher bar for simple and secure mobile payments and an easy, enjoyable user experience. And by some measures, it continues to grow. The number of people who have tried the service once has tripled since launch.

Why Apple Pay Doesn’t Have Traction

We’re just a couple months past the 20-month anniversary of Apple Pay. And looking back over these 20 months, this article in PYMNTS.com notes that “after you take into account both who has adopted the service and how often people who have adopted it use it, the numbers have barely moved over 20 months. Roughly speaking, only one person in 20 who have the service use it when they can; 19 out of 20 people who have the service don’t even bother.”

So the reality is, Apple Pay hasn’t taken off. Why? It’s a classic mistake. It has solved a real problem. But the solution isn’t compelling enough to change current customer behaviors. The fact is, nearly half of those who have tried it say they like other solutions better—like cash or cards that offer rewards.

Unfortunately, we see this same cycle repeat itself in the startup and customer experience worlds. A great idea on paper targeting a well-known and large-scale problem appears to be a clear winner. But the one audience required to turn that conceptual win into fiscal and market reality is among the most overlooked: the customer.

Be Better Than What’s Available Today—As Defined By Customers

It’s a harsh reality any company can learn from. To drive adoption and engagement, your solution must be more compelling than the current available options. For a new product launch, it has to be all those things that Apple Pay is: easier, more secure, faster. But it also has to be one thing that Apple Pay is not—at least not today: more desirable than the current experience.

For startups, the number of failed companies that solve nonexistent problems (or that solve real problems poorly) is legion. After all, the number one reason startups fail is the lack of market need. Think eToys, Joost, and Pets.com.

When companies deliver solutions that make it harder to do business, add friction to the process, or don’t solve real customer issues in super compelling ways, customers are either annoyed or happily ignorant. In other words, they will simply do whatever is easiest.

In the world of customer experience—and you can argue Apple Pay falls into this world as well—customers are pretty adept at finding the shortest distance between where they are and where they want to go and taking it.

The Simple Secret Of Success: Understand Your Customers

In each of these areas—company, product, service, and experience design—the secret of success is remarkably similar. It’s in leveraging straightforward, problem-solving processes that enable you to listen to and address the needs of customers, as well as employees and other business stakeholders.

According to Graham Clark, former EVP and global head of digital services at NIIT Technologies, listening to and actually addressing your customers’ needs is one of those “eat your vegetables and exercise regularly” discussions. We all know we should do a better job of it, but not everyone does.

Apple is quite likely currently a victim of the tenth most common reason startups fail: The product is mis-timed. But it has the resources to avoid most of the other common failures (lack of cash, poor product, wrong team, etc.)

For the rest of us? Eat your vegetables and exercise regularly. The trick to staying ahead of the competition is by better listening to and serving our customers. If we succeed at that, our risk of failure in any customer-facing endeavor drops radically.