Tech Companies’ Customer Retention

As my Apple Iphone 4 is approaching three years old and is starting to have some problems, I have been researching some new mobile phones and seeing what is out there. While I haven’t made a purchase yet, the two I was deciding between are the Samsung Galaxy S5 and the Apple Iphone 5s. With Apple’s most recent software update for their Mac computers (OSX Mountain Lion), you are able to use iMessage on your laptop. When it dawned on me that if I switched to the Galaxy S5 I wouldn’t be able to use this feature, my mind was made up, I would be sticking with an iPhone.

It is worth noting that usually Apple’s major operating system updates would cost twenty or thirty dollars. The most recent one was free. While I am sure that there were other reasons, I am also sure that this idea of getting Macbook users to stick with the iPhone by adding a whole new level of seamless interaction between the devices was part of the justification for giving this software update away.

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While the above infographic shows that this problem of customer loyalty isn’t really an issue for apple, it is for many other major tech companies. This got me thinking of ways that tech companies can do a better job with customer retention. As the example above demonstrates, Apple’s messaging feature being linked to their laptops got me to stick around as an iPhone customer. Many have noticed this trend of high customer retention with Apple. South Park even made an episode that made drew parallels between Apple and a cult or religion.

Clearly Samsung, LG and the others could take some lessons from Apple. With Blackberry’s terrible decline from the dominance they once held over the smartphone market, these companies have a lot of incentive to learn a thing or two about customer retention. As this driving sales article points out, and in line with the example I gave in my introduction, Apple’s products work flawlessly together. This is one benefit to the fact that you can’t buy Apple’s software unless it comes preinstalled on one of their machines. This is much different from Microsoft’s Windows or Android’s mobile operating system, that can be used on many different brands’ devices. While Apple’s policy on this has drawn some criticism, from the standpoint of brand loyalty, it has surely been a winning strategy.

One thought on “Tech Companies’ Customer Retention

  1. jhchamot

    Apple has definitely done something right in terms of costumer retention. It is hard to say what it is, though. The only Apple product I own is an iPhone, which I love, but I personally don’t think buying a Mac is worth it (for my purposes). I don’t see the huge difference between Mac’s and PC’s in terms of quality, so I am not sure if their customer retention can be attributed only to this. But I agree that it is important for companies to do this. Cell phone providers are susceptible to societal tendencies, though, which make it harder to do this. Apple was able to because it is also has computers and other products (unlike Blackberry).

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