Customer First to Profit First: The Transformation of Tech Behemoths

If you are anything like me (and 99% of the world) Google is your interface to the web. So when I want to interact with a company - visit the website, find directions, call, email, chat, or make a reservation - I google it...

But as I type in the name of the hotel I want to book, I am greeted by a dozen other links: competing hotels, car rentals, comparison sites, special deals - many of them picking up my search terms which makes them seem deceivingly relevant. Google served me everything but the thing it knew fully well I was looking for. Because the hotel had not paid... or not paid enough... You see companies are paying Google millions just to be amongst the first links when people search the name of their company.

Imagine going to a bar, ordering a Stella and the bartender hands you a Heineken.

This not a situation where you are asking "What beer do you recommend?". Google / the bartender knows 100% that you want a "Stella" but it serves you "Heineken" because it makes them money. This is a really shit bar and emblematic of a slow creeping shift by the world's leading tech giants from customer-centric strategies into more short-term self-serving business models.

Apple, Amazon, and Google grew into behemoths on the back of their visionary CX focused strategies, but now they are unfathomably large and still chasing growth. The pressure to deliver ever higher profits at all costs is leading to customer hostile decisions which might open doors for competitors.

Amazon

Long celebrated for its customer-first approach, Amazon has now turned into a digital billboard, pushing sponsored products not because they're the best match for your search, but because they've paid to be in your face. With an advertising business booming to the tune of $30 billion, the platform has shifted from being a shopper's paradise to an advertiser's playground.

Amazon has transitioned into a formidable advertising platform, leveraging its e-commerce dominance to fuel a rapidly growing ad business. This shift has subtly altered the consumer shopping experience on Amazon. Where once the platform was lauded for its customer-centric approach, prioritizing product relevance and customer satisfaction, it now emphasizes sponsored products and brands that pay for visibility. This change, driven by the pursuit of advertising revenue, which significantly contributes to Amazon's total income, compromises the quality of search results, favoring advertised products over more relevant or affordable options. The platform's ad business, which commands a significant share of the digital advertising market, outpacing giants like Snapchat and Twitter, has thrived on this model, drawing advertisers away from traditional digital giants like Google and Facebook.

The Federal Trade Commission (FTC) took action against Amazon for enrolling consumers into its Prime service without their consent and making the cancellation process deliberately challenging. This involved using "dark patterns," manipulative design tactics, to trick consumers into unintentionally signing up for automatically renewing Prime subscriptions and complicating the cancellation process to discourage users from unsubscribing. The term "Iliad" was used internally by Amazon to describe the intricate, multi-step process to deter Prime cancellations, reflecting a strategy to retain users by making the exit process as cumbersome as possible.

Google

Remember the good old days when you could Google something and actually find what you were looking for on the first try? Those days are long gone. Now, it's like trying to find a needle in a haystack, except the haystack is made of ads.

Google, long the gateway to the internet for millions, has increasingly prioritized paid advertisements in its search results. The once straightforward experience of finding information or websites now involves navigating through multiple ads, often pushing organic search results further down the page. This model, while profitable for Google, raises questions about the quality of the search experience and whether the platform prioritizes revenue over user convenience and relevance of information.

Google also initially offered unlimited photo storage on their Google Photos service, reeling in millions of users. However, once these users had committed to the platform and Google started charging for storage after all.

We are so used to it by now it is hard to remember the old YouTube. The YouTube that focused on the experience of watching videos. At the very latest the introduction of unskippable ads signaled the irreversible switch to monetisation over CX. Nowadays I am happy when there aren't two ads and they don't last longer than the actual clip I'm trying to access.

Further Google's ban on third-party cookies was presented as a move towards enhancing privacy, yet the company continues to collect vast amounts of user data through its services, raising questions about the true intent behind the ban.

Apple

Apple, once the rebel brand urging consumers to 'Think Different,' now wants its users to think alike: "Just buy more Apple products."

Apple's strategy has increasingly focused on ecosystem lock-in, exemplified by decisions such as the non-integration of iMessage with other platforms to maintain its user base. The initial promise of a cross-platform iMessage, aimed at enhancing user experience, was retracted when the potential to prevent platform migration was recognized. Particularly in the US this has led to a huge divide and barrier between iPhone users and everyone else. The experience of chatting across platforms is purposefully broken. Apple could easily fix it. Internal documents prove that it is a conscious decision by the company for customer lock-in and against customer experience.

Tim Cook was asked by a customer why he can't send photos to his mother (an android user)... Cook's answer: "Buy her an iPhone".

Apple's approach, particularly in its App Store policies, which impose a 30% fee on transactions, reflects a broader strategy to maximize revenue from its ecosystem. This policy not only affects the cost to the consumer but also limits companies from directing users to alternative, less costly subscription options outside the App Store. Restrictions that are detrimental to the customer and only designed to generate more profits.

Apple's decision to remove chargers from iPhone boxes, while maintaining the product's price, drew criticism for increasing costs for consumers under the guise of environmental sustainability.

Additionally, Apple's restrictions on setting default apps limited user choice, compelling them to use Apple's own apps over third-party options.

The removal of the headphone jack from iPhones forced users to purchase wireless headphones or adapters, further locking customers into Apple's ecosystem.

Finally, Apple's latest actions to align with the European Union's Digital Markets Act (DMA) have sparked a debate, presenting a textbook example of "malicious compliance." While superficially allowing app side loading on iOS devices, Apple has introduced exorbitant commission fees for developers choosing this route, effectively preserving its monopoly while appearing to conform.

Microsoft

In a surprising twist, Microsoft, the erstwhile antagonist in the tale of tech giants, has turned its narrative around. From forcing Internet Explorer on everyone like an unwelcome party guest, it's now embracing a more inclusive and customer-friendly approach.

In contrast to the other tech giants, Microsoft initially grew through practices considered hostile, such as bundling its browser with its operating system to edge out competitors. But in the last ten years Microsoft, under the leadership of Satya Nadella, has made significant strides in becoming more customer-centric. Nadella is seeking growth through customer-centric innovation not squeezing more and more cash out of their existing products and customers. This move demonstrates a potential for tech giants to recalibrate their strategies towards more customer-friendly practices without sacrificing profitability or market dominance. This is evidenced by the fact that during this time Microsoft grew it's valuation by 10x to become the most valuable company in the world.

Nadella shifted Microsoft's culture towards a growth mindset, prioritizing customer needs and fostering innovation and collaboration. He expanded the mobile and cloud offerings, acquired new business lines and invested heavily in AI - all in response to customer demand. All his moves reflect an ideal of growing by giving customers more and better experiences rather than milking legacy products.

Interestingly Microsofts change came after being slapped with multiple record setting anti-trust fines by US and EU regulators and now Apple, Amazon and Google are all facing similar challenges on multiple fronts for abusing their market position to the detriment of customers. Only time will tell how they will respond to these circumstances, if they will be able to return to their CX roots and use it as a catalyst for customer-centric growth.

There's always room for a new hero to emerge

While their dominant market positions may protect them in the short term, these developments potentially open opportunities for new entrants that prioritize customer experience and could disrupt the status quo. The reality of competing against such entrenched incumbents remains a daunting challenge for any would-be competitor, but empires usually crumble from within.

The trajectory of these tech juggernauts from being heralds of user-centric innovation to entities primarily driven by profit margins underscores a complex narrative of growth and stagnation. While these companies have undeniably revolutionized the way we live, work, and communicate, their growing tendency to succumb to the lure of sacrificing CX for immediate profit may cost them the trust and loyalty of the very users who have propelled them to their towering statuses. While their dominant market positions may protect them in the short term, this shift opens opportunities for new entrants that prioritize customer experience and could disrupt the status quo.

I am not saying that all is bad at Amazon, Apple and Google, far from it - But if there is ever a threat to their dominance, I am predicting that it will come from this shift from customer focus to profit focus. They are self-inflicted wounds in the name of short term shareholder gains that might fester into weaknesses that can bring down these giants. These might seem like small little cracks in the grand scheme of things, but they are telling signs of a culture that is only looking to squeeze as much as possible from their cash cow rather than taking care of it.

So beware, if you don't provide a great customer experience, a competitor might swoop in and eat your lunch.