How Apple Built Its iEmpire: Brand Loyalty in Electronics and How It Affects Consumers
Across every industry, brand loyalty is something that companies strive to achieve. By building up a myth around a product or by encouraging association with traits such as boldness, innovation, or stability, a brand image can work wonders for converting and retaining clients. In the electronics sector, no one knows this better than Apple and its competitors.
How Brand Loyalty Is Fostered
Taking steps in order to ensure that customers stay loyal to a brand is a strategy shared across different industry segments. Sometimes it is focused on a clever advertising campaign, like Volkswagen’s legendary “Think Small” approach. Other companies prefer to be practical about keeping customers happy: according to casino reviews, many online casinos offer loyalty schemes and VIP points that translate in bonuses for loyal players. Gyms and supermarkets often do the same, as do airlines with their “frequent flyers” programs. Yet in the electronics industry, things are a bit tougher: technology keeps changing and people are nowadays much more willing than before to invest in a new smartphone or laptop.
Consumers spend money much more frequently on electronics than they do on goods like a car, but they won’t come back as often as they do with grocery shopping. This means that electronics companies have many chances to lose valuable revenue – so brand loyalty is crucial. Apple was quick to catch on to that and has developed one of the smartest client retention policies of modern time. It has managed to build a brand that represents lifestyle choices rather than simple consumer choices. People who associate themselves with the Apple brand see a whole worldview embedded in it: simplicity, creativity, clean design, dreaming of the impossible and making it happen. These are values which Apple clients feel are represented by their buying choices.
Why Brand Loyalty Is Key for Customer Retention – and Generating Profit
And the strategy works well in terms of sales and client retention. In mid-2018, iPhone brand loyalty helped the company stay ahead of competitors like Samsung and LG. According to recent research, for Q1 2018 consumers who remained with the Apple brand rose to over 90%. Its second biggest competitor, Samsung, managed to retain 70% of its consumers during that same period. This means that people who were iPhone users and looking to buy a new smartphone would most probably upgrade to the next iPhone model, which is a major success.
Yet, Apple does not dominate across all markets. In fact, a recent survey across UK consumers has given the top spot to Samsung when it comes to brand loyalty in the tech sector – with Apple claiming second place. Customers who are happy and loyal to a brand are key for its financial success, as they are likely to keep coming back and expanding to its other products and services, too. A rise of just 5% in client retention can lead to an increase of up to 95% in revenue, while happy customers tend to bring more people in by acting as informal brand ambassadors: over 80% of people have stated that they consider word-of-mouth advice on what to buy as the most reliable kind.
So, next time you are looking to buy a new smartphone, consider the factors that will help you make a final decision – it is likely that your previous experience with a brand will prove crucial.
Dave has over 20 years experience in the digital industry, and is founder and editor of Geektown. Obviously a huge geek himself, he can often be found in front of the latest tv show or movie, on various video games, or with his head in a comic book.