The IBM effect

Of the few things I actually learned in college, one of the things that stuck with me was “the IBM effect” from marketing class.  I’m not sure if there’s a more official codename for the concept, but that’s what I remember it as.  Essentially, the idea is a marketing strategy that IBM was successfully able to pull off, in that “you never get fired for picking IBM.”  Getting to that point continues to pay enormous dividends, and can be seen in countless other big companies as well.

The reason this is powerful is that business owners / CEO’s often forget who the person is on the other end and how they make their decisions.  Unless you’re dealing directly with the boss on the other side (and even then with their board), your customer reports to someone at their company.  Part of their decision to use you or one of your competitors will be their desire to “make the right decision” internally, so as to advance their career or depending on the situation make a critical decision that could decide their fate.  For instance, picking a supplier for critical hardware and software that will power your company’s infrastructure for the next 10-15 years is a really big decision that you can’t screw up as the buyer.

I wasn’t able to pull up some of the old commercials, but someone told me they explicitly called out that point in their advertising.  This allowed them to leverage their scale and successfully pitch against upstarts who couldn’t make the same claim.  Big Blue was able to turn around the image that being big was bad and make it a good thing, while also labeling their competitors as risky.  By going with their products/services, you were making the safe decision.