After two consecutive recalls of Samsung Galaxy Note 7, Samsung Electronics Co Ltd. (KRX:005930) finally decided to halt the entire production. This is a good decision for Samsung to avoid further mishaps. Branding Brand recently conducted a survey from October 11th to 12th with 1,000 Samsung smartphone customers. The purpose of the survey was to understand the customers’ confidence and their loyalty towards the brand. The issue with Note 7 was grave. However, only 40 percent customers said they’d prefer to opt for smartphones from brands other than Samsung. This means, a majority 60 percent still chose to remain loyal to the brand.
Previously, Branding Brand had conducted a similar survey on September 23, with 1,000 Samsung customers. This survey was done immediately after the recall of Galaxy Note 7 devices. According to the survey, 34 percent wanted to ditch Samsung as a brand forever. This shows that after the production halt, this number scaled up by 6 percent (as revealed in the October survey).
Looking at the figures, it is clear that Samsung lost an additional 6 percent customers’ loyalty after killing Galaxy Note 7 device permanently.
Out of the 40 percent users who do not wish to use a Samsung phone again, 30% of the customers have only ever owned a Samsung phone. Moreover, out of all the customers willing to switch from Samsung, 8% would buy the new Google Pixel, 30% will switch to iPhone (down from 34% from the previous survey), and 62% will consider another Android phone (up from 57% from the previous survey).
What is Keeping the Majority chunk Loyal to Samsung?
The first survey also revealed an interesting fact about Samsung smartphone customers. Majority of the customers are still ready to vouch for a Samsung phone because:
- 52 percent are in awe of the Style
- 44 percent prefer the customizable experiences it offer
- 39 percent voted for Samsung device’s battery life
- 35 percent finds it’s cost attractive and affordable
- 28 percent simply dislike other Smartphone brands!
The incident has left a dent in Samsung’s image and sales. Samsung is lucky enough to have 60% loyal customers who still want to stick with the brand. This is probably because of the apology from Samsung Mobile’s chief for the incident. The brand has promised to regain the trust of its customers by identifying the exact cause of the issue with the device.
Moreover, Samsung is also offering $100 bill credit for the customers who are willing to exchange the Note 7 for another Samsung smartphone as a reward for their patience and loyalty with the brand. Simultaneously, it is still offering $25 bill credit or a full refund for those who want to buy a different brand’s phone as an acknowledgement for the inconvenience.
Effect of Note 7 Debacle on Galaxy S7
For the 60% who wants to stick with the brand, Galaxy S7, and S7 Edge is the best available option. The Note 7 debacle and the exchange program has apparently increased the demand for Galaxy S7 Edge as it is still cheaper than the company’s explosive flagship, Note 7. Samsung’s Galaxy S7 Edge has emerged as the world’s top-selling Android smartphone in the first half of the year as the company shipped a whopping 13.3 million units, globally. And that’s the reason the company is reportedly beefing up the production of flagship Galaxy S7, Galaxy S7 Edge and other lower-end smartphone models. Also, the customers are still eligible for a partial refund after replacing the Note 7 since Galaxy S7 Edge is cheaper.
The holiday season is the most lucrative period for the OEMs as more and more consumers are out to shop. Samsung is planning to sell more and more of the S7 and S7 edge to cover its losses. The company is well aware of the fact that these flagship devices are considered as some of the best Android smartphones ever manufactured. Hence, they have now decided to scale up the production to ensure that there is no shortage of these devices in the stores, when in demand.
Samsung is planning to put more focus on the Galaxy S7 by ramping up production of the handset, said an industry source.
It is a very tough phase for Samsung as there has been a heavy impact on the brand’s goodwill and profits. The company is striving to cover up all the damages that Note 7’s explosions have done to the company. However, Samsung mobiles form just one part of the giant, so the financial losses might not bother them much, but it is the reputation which needs to be rectified as a priority.