After years of launching some of the most talked-about smartphones, tablets, and laptops of all time, perhaps Apple’s management team thought it could afford to not listen to its customers.

In April, for the first time in 10 years, Apple reported shrinking profits and declining shipments of the iPhone. In a conference call with investors, CEO Tim Cook made a frank admission to those who were disappointed in the company’s financial performance. “We know we didn’t meet everyone’s expectations,” he said. In fact, the expectations Apple needs to meet include not only analysts and shareholders, but also the consumers who put Apple back on top in the first place. What’s surprising is that these consumers, like consumers across all product categories, are voicing their concerns loudly and clearly.

As competitors begin to gain traction at its expense, Apple’s failure to tap into what’s being said through social insights and develop a data-driven marketing strategy is becoming an object lesson for businesses everywhere. Consider this a cautionary tale.

Conversation about features like screen size, battery life, and connection speed all spiked immediately on the social web.

When Apple launched the iPhone 5, there were loud cheers from the company’s live event in California. Offstage, however, the conversation was broader and more sophisticated. Across the social web as the unveiling took place, socially active influentials were homing in specifically on the features that mattered to them most. Social analysis painted a clear picture of the key elements that would be driving consumer purchase decisions for Apple and its competitors. Conversation about features like screen size, battery life, and connection speed all spiked immediately on the social web.

The evolution of marketing decisions

Contrast this with the traditional approaches to marketing that have been commonplace. There used to be only two ways key decisions about product design and marketing were made. There was the Steve Jobs model, where a highly influential leader imposed his taste on the public at large. These kinds of organizations are rarely successful and sustainable even less frequently. The ongoing criticisms of Tim Cook’s leadership make this clear.

Then there is the focus group model, in which companies invested considerable time and expense tapping into consumer opinions using dated research and divorced from the way their target customers behave in the real world. Surveys suffer from the same shortcoming.