Loyalty Program of the Apple Inc - Essay Example

APPLE’S LOYALTY PROGRAM ANALYSIS It has been said that a business that is not committed to ensuring return-clients is facing a bleak future irrespective of how many new ones are coming. While getting new customers is very business owner’s plan, maintaining them significantly shapes the future of that business. For customers to remain loyal to any business, they have to be compelled by a number of issues. Either clients will flock a business to buy a product because it offers them best service they seek or its price resonates with their affordability. In other words, customers will not repeatedly buy a service or a product just because a company enjoys a brand name. Understanding how customer loyalty can be earned is an imperative to every business owner. For that reason, this paper will focus on the loyalty program of the American firm, Apple Inc., and offer necessary recommendations on how to improve it. Background Apple Inc., is an American-based company operating in various countries, headquartered in the state if California. The company specialises in the designing, developing and sale of electronics including software, personal computers and cell phones. In addition, the company offers other services and products including Smartphones, tablets, web browsers to name but a few. As of year 2014, Apple offered permanent jobs to over 72,000 people, and its profit for same year stood at a whopping $182 billion (Chen and Ann, 2014). Some of the competitors Apple faces include Samsung, Nokia, and Microsoft among others, all of whom offer either part of the similar services or the same as Apple. Apple’s loyalty program When it comes to the company’s loyalty program, Apple Inc. has been noted to have a strict one where a majority of the customers hardly qualify for it. According to Meyer-Waarden (2015), Apple’s customers are expected to spend a considerable amount of money for them to qualify to the company’s loyalty program. Sadly, many of them do not hit the target thus keep missing the goodies the company offers. Even though the company has recently announced adjustment to its loyalty program requirements, it is still hard for many consumers to reach the target. For instance, Apple recently announced that any school intending to have its classrooms filled with the Mac computers would indeed enjoy a discount. Such institutions will enjoy a discount of 6% to 8% when the purchases are made from the company. From the above findings, it is clear that Apple’s loyalty program is wanting, and requires improvement since there are other competitors who could capitalise on this weakness. While Apple has continued to offer still competition to other players in the industry, its loyalty program requires measures to make sure customers are retained. As Meyer-Waarden (2015) noted, not only does customer retention help in making profit, which is every business’ core goal, but also helps in establishing a relation which is fundamental in the future. In line with that, the following section will explain the various customer loyalty programs and techniques, and how Apple could employ each of them in constructing an effective loyalty program especially in this digital age. Types of loyalties From the onset, it is vitally important to understand the various types of techniques employed by business owners. Also, it is worth noting that as Meyer-Waarden (2015) found out, it is almost impossible to find clients who are 100% loyal to one company. Normally, customers will frequent a business from time to time, but still visit the competitors. The first kind of loyalty exhibited by customers is the polygamous, which in essence entails a customer’s trend to purchase goods from several places, but more in one store. For instance, a customer could purchase products from Apple’s store 70% of the time, 20% at Microsoft and 10% at Samsung. This is a kind of loyalty almost for every customer, and Chen and Hsu (2013) attribute this trend to a number of issues including experimentation or dissatisfaction. When a business realises this to be the case, it is recommended that availability of various products be made to the customer to limit the need to try other products. The above explanation can be found in Apple’s sales of smartphones where competition with its major rival, Samsung, keeps changing. At the beginning of 2014, Apple’s smartphones sales trailed Samsung’s, but the scenario changed later in the year when the two tied (Mack, 2015). It was reported that the companies sold over 74 million smartphones in the last quarter of the year 2014 (Kharpal, 2015). These findings reveal that the Apple customers were somewhat reluctant to purchase its brand at the beginning of the year. However, the situation changed as the year ended, and the reason for that is the introduction of iPhone, which was the reason behind this increase of sales. At a time when the internet has become a phenomenon in the world of business, Apple’s sales were boosted by this invention. Even before its launch, iPhone was advertised on various platforms including websites and social media. Notwithstanding these positive outcomes in terms of sales, Apple still struggles with the issue of customer relationship. Recently, the company’s rating in terms of customer care was poorly rated at 47.72 out of 200 and this was classified as disappointing (Meyer-Waarden (2015). Customer’s loyalty is significantly influenced by the quality of services received. Thus, where clients are promptly and satisfactorily served, their loyalty to a business is likely to last. Evidently, Apple needs to work on this area, as it is clear customer complaints are well handled. Attitudinal and behavioural loyalty is the second method that determines how companies craft their loyalty programs. In fact, many firms tend to create these programs with the full view of this in mind where customers are encouraged to spend as much to benefit from the company’s program. Attitudinal loyalty is expressed through the psychological attachment a customer has to a commodity. However, this does not always translate to the customer making a purchase, but tends to speak much about it to others. A case in point entailed the Samsung’s versus Apple’s smartphones in UK where a majority of the people owned Samsung, but desired to own an Apple product (Chen and Ann, 2014). In order to overcome this hurdle, Apple ought to employ the tactic of pricing in order to guarantee practical loyalty. These assertions are informed by the findings that the respondents in the UK cited price as one of the main reasons for not owning an Apple smartphone. Customer relationship can lead to gaining repeat customers if only one clearly understand the needs the clients have and strive to meet them. At a time when the internet is proving to be pivotal in the business world, Apple could utilise it for customer loyalty. First, having a social media profile will go a long way to ensuring that any questions clients might have are satisfactorily answered. Meyer-Waarden (2015) asserted that one mistake companies make is failing to engage clients after making a purchase. Gone are the days when a company’s main goal was to make a profit without establishing a relationship with the customer. Since the internet has made this possible, Apple needs to improve its interactive platforms with its clients. That means there is need to interact with the clients prior to and after buying a product; this way clients will most likely become part of the company. The result is that customers will want to know the upcoming products by the company, and the latter will not have to spend many resources in advertisement. Online offers have become a new way of attracting and retaining customers for a majority of companies in various industries. For instance, it is common to find cell-phone makers allowing customers to do a pre-order. Samsung has been involved in this trend as has Apple, and the results have been tremendous, but there is still need to improve on the Apple’s side. While the company does not delay in its shipping of various products, as evidenced by the recent shipping of the Apple Smart watch, it was reported that there lacked significant discount on the customers who pre-ordered. Besides the use of social media, which is part of the digital marketing, Apple ought to embrace display and search advertising. In the recent times, companies like Google Inc. have greatly aided many businesses in becoming more profitable through the search engines’ platform (Fraering and Minor, 2013). In addition to clients searching for the products through Google search, affiliate marketing has made easy for companies to have their products displayed almost everywhere without having to spend as much money as would be the case if mainstream media were used. Earlier, it was noted that customers do shop elsewhere because to satisfy the need for experimentation. Yet, sometimes the very products bought elsewhere are offered in the usual company, but since there is no information detailing where these products are, businesses misses these opportunities. To make sure this is not replicated at Apple, it is imperative that the company uses the digital marketing techniques as the ones mentioned above to increases visibility online. Email marketing is yet another technique employed in the digital marketing by companies in order to optimise their sales. Often, the mistake firms make is spamming subscribers with unnecessary and non-existent promotions, and this tends to be detrimental because clients will hardly read such emails. However, Fraering and Minor (2013) recommend a different approach whereby segmentation strategy, publication schedule and content personalisation are employed. That is to say, a firm will not send a message to its clients randomly, but only when a particular promotion exists. Secondly, the message will not look like a formality for everyone; rather it will cater for the needs of that particular subscriber. These two can only be achieved when the company clearly understand the preferences of its clientele. That calls for the company to remain engaged with the clients such that when a product that fits the preferences is in the offing, the customers could even pre-order. With the recent findings showing that the social media is shaping consumer’s buying attitude and decision, it is important to for companies to capitalise on them (Turner and Wilson, 2009). Apparently, the social media is having a great influence on the online shopping with a majority of people seeking opinions from their friends to reviewing the comments left by other shoppers. Where these comments are negative, the company involved finds it hard to make sales no matter the amount of marketing. A company that engages in its clients often is at a higher likelihood of gaining more loyalty thus remaining profitable than ones that does not. A case that proves these assertions to be true entails the Houston-headquartered company, Tesco where it was noted that the firm’s social network page is not as active that Macdonald’s (Turner and Wilson, 2009). While Macdonald kept introducing new products and posting different pictures of their various products, Tesco had a different trend. As a result, MacDonald handles issues in a faster way than Tesco, and this has an impact on customer loyalty. Similarly, Apple ought to have a modification of its approach when it comes to the online platforms, specifically, the social media. In 2011, one of the company’s employees was sacked after failing to adhere to the company’s social media policy. Apparently, the customers complained about the company’s way of handling them on the Facebook platform. The company is also known to be very strict when it comes to releasing promotional information where it is releases when the product is almost close to luncheon. Other competitors like Samsung do it a bit earlier thus giving customers ample time to pre-order and this ought to be approach Apple adopts. One of the requirements that come with customer retention is that the latter has to feel connected to a product and the company most of the time. This can only be possible when the customer is often informed on the upcoming products and having their queries adequately addressed. Overall, Apple ought to implement a particular loyalty program called the Satisfaction-Profit Chain (SPC). In this model, a firm analyses all its major areas for any shortcomings and rectifies them accordingly in a bid to increase productivity. It is a model that seeks to ensure that all the channels through which the customer is served are up to the task in order to encourage loyalty. For instance, employees’ satisfaction is an imperative when customer loyalty is being sought. This is because, as noted, customers need to have their queries answered within the shortest time possible and in the most convincing way. Obviously, this is a task left for the employees whose morale will determine how they serve the customers (Meyer-Waarden, 2015). That would mean that in case the clients are dissatisfied because of poor customer services, their loyalty will dwindle. It is expected that once a company assures its employees of the needed satisfaction, their productivity will increase, subsequently pleasing the clients. In a recent study, it has been confirmed that employee satisfaction is vitally important in gaining customer loyalty (Meyer-Waarden, 2015). In the case of Apple, there is a lot to improve when it comes to the employees’ satisfaction. In 2012, it was reported that the company has a tendency for “disposing it employees once they get burn-out” (Denning, 2012). These claims coupled with the other reports of the sacked employees confirm that there is a need for a scrutiny of the company’s attitude toward its employees. Clearly, unless there is a change in way Apple approaches employees’ plights, there is a likelihood of more cases poor customer-company relationship. Nonetheless, the situation can be turned around by employing this SPC model especially in regard to the employees and customers. By employing the above model, Apple could increase not only the levels of customer loyalty but also sales, subsequently profitability. According to Meyer-Waarden (2015), the SPC model encourages the improvement and the monitoring of the essential systems in a firm. Hence, when these are working perfectly, the output is tremendous, and this translates to profitability and the realisation of both the short-term and long-term a company might have. In this case, of Apple, it should ensure the relationship existing between its employees and customers remains healthy as this would greatly affect the overall performance of the firm. To sum it up, Apple is undoubtedly a profitable firm whose products are simply amazing, and whose profits keep the company among the top in the world. Notwithstanding these facts, customer loyalty at the company is somewhat wanting. Consequently, taking the right measures is important to be future state of the company. To turn things around, the company needs to embrace and utilise the opportunities resulting from the invention of the internet. Many customers practice attitudinal or behavioural loyalty and Apple has to find a way to seize this opportunity. Adjusting its loyalty program is a requirement, working on the prices and keeping the customers satisfied through addressing their questions will transform the company. If this strategy is adopted and coupled with the other recommended tactics, Apple time for playing a secondary role to Samsung can reach a dramatic end; otherwise, the company should brace for more position two. Bibliography Chen, C. and Ann, B. (2014). Efficiencies vs. importance-performance analysis for the leading smartphone brands of Apple, Samsung and HTC. Total Quality Management & Business Excellence, pp.1-3. Chen, T. and Hsu, H. (2013). Service marketing tools influencing attitudinal loyalty and behavioural loyalty. IJECRM, 7(3/4), p.173. Denning, S. (2012). Apple's Employees Have A Hell Of A Ride. [online] Forbes. Available at: http://www.forbes.com/sites/stevedenning/2012/06/25/apples-employees-have-a-hell-of-a-ride/ [Accessed 28 Apr. 2015]. Fraering, M. and Minor, M. (2013). Beyond loyalty: customer satisfaction, loyalty, and fortitude. Journal of Services Marketing, 27(4), pp.334-335. Mack, E. (2015). Samsung Is Undisputed King Of Smartphones; Apple Still Distant Second. [online] Forbes. Available at: http://www.forbes.com/sites/ericmack/2014/04/30/samsung-is-undisputed-king-of-smartphones-apple-still-distant-second/ [Accessed 28 Apr. 2015]. Meyer-Waarden, L. (2015). Effects of loyalty program rewards on store loyalty. Journal of Retailing and Consumer Services, 24, pp.22-29. Kharpal, A. (2015). Apple vs. Samsung: Who's the ultimate winner?. [online] CNBC. 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