Google could learn a few things from Samsung’s smartphone strategy, but the lesson isn’t very much about the devices themselves.
Phew! I don’t know if they found out, but Samsung held its first special super-duper-neato event of the year on Tuesday, and the company has a few new phones for everyone on Google.
The devices themselves look good enough, in their own way. I will summarize them quickly for you, because what I really want to talk about is something deeper. So here’s the truth:
Galaxy S20 is the new flagship model Samsung 2020. It comes in three models, all powered by 5G in the US, and are as good as Samsung: large screens, small frames and All The Specs ™ – tons of numbers that look impressive on paper ( 108 megapixels! 8K video! Displays 120Hz! 16 GB RAM!), But in the end it means very little when it comes to the real impact. And they are expensive: $ 1,000 at the lower level and up to $ 1,600 for the high-end model at the maximum.
Galaxy Z Flip is a new foldable horizontal flip phone, practically a better version recently launched Motorola Razr, by its appearance, and an interesting technological progress, but it is almost certainly something that no normal person should buy right now .
However, this is the ultra-shortened version. The reality is that Samsung is forced to sell a lot of Galaxy S20 phones, as is usually the case with its new major flagships, and this is the area it really wanted to explore.
First, a brief touch of context: in addition to creating good-looking devices, Samsung has worked hard over the years to build brand awareness and loyalty. This was initially driven by bold, memorable and ubiquitous marketing, but then, at least in part, turned into a cycle of self-propagation. By that, I mean that the longer someone stays with a certain style of Android phone and the more they update from one generation of the phone to another, the more likely they are to perform the same type of upgrade. next time the problem comes it comes. need. .
Think about it: How many people do you know who jump between different Android brands? In my experience, apart from a small subset of enthusiasts, most people don’t even consider the idea. They’ve had Galaxy phones in recent cycles, so when it comes time to update, the only question I consider is what model and style of Galaxy phone they want to receive. Just as the preference for the smartphone platform has become largely tribalized, the preference for the Android smartphone brand seems to have become largely static.
And their effects are even deeper: when someone who doesn’t yet have a strong brand preference in Android is looking to make a purchase decision, an average phone buyer, either for individual purposes or at company level, in What Do You Think ? the first? Most of the time, it is the brand I know and see everywhere I look, both in the hands of colleagues or colleagues, and in the most prominent positions on store shelves. Once that cycle begins, it is difficult to interrupt it.
Samsung knows this and this week showed us how carefully it is working to consolidate that cycle, in a way that is almost the opposite of what Google is doing with its Pixel line of phones.
Think about these general offerings from this week’s Samsung event and the contrast they illustrate between the approach to selling Samsung and Google smartphones:
1. Samsung has revealed that Galaxy S owners are waiting longer than ever to update their devices.
This was largely just for context, but it’s important: the average refresh cycle of Galaxy S owners, in particular, increased from 22.6 months in 2016 to 26.6 months in 2019, an increase of 18%, according to Samsung. This reflects the industry-wide model we’ve been hearing about for some time, but seeing that Samsung recognizes the same specific trend for Galaxy S owners and sees it come with the full assumption that those Galaxy S owners will be updated. for a new Galaxy S phone and not for offering any other brand, it is quite revealing.
It also takes us directly to our next point:
2. For the first time, Samsung will continue to produce its next-generation phone, the Galaxy S10, and will sell all of these models for $ 150 less than their original prices.
This is something that Apple has been doing for a long time, but most Android device manufacturers (including Google) haven’t done it yet, and, God forbid, it makes so much sense that it almost hurts.
Yes, Samsung Galaxy S20 prices can be a little outrageous, but if you don’t want to spend a lot or more on a bunch of state-of-the-art technology you probably don’t need, well, now you can get the picture from last year . Pretty impressive Galaxy S10 phone for a much nicer price of $ 750. Heck, you can go up to $ 600 if you want to get down to the S10e model, which is still perfectly beautiful.
Google did this very briefly with Pixel 2 when Pixel 3 appeared, which gave me hope to adopt an equally smart strategy, one that would be particularly sensitive with Pixel phones, in fact, because they are the only ones Android devices have received a full three years of guaranteed operating system updates, but it turned out that the company only sells its remaining stock, rather than continuing to produce the old model as a deliberate and continuous strategy. Poor me.
And then there is the most important point of all:
3. Samsung is doing its best to encourage current Galaxy owners to upgrade.
Sure, the Galaxy S20 can cost a thousand dollars, but if you have a Galaxy S10, you can trade your old phone and get the new one for just $ 400 (unlocked and no contract). Do you have a grade of 10? Samsung will grant you a $ 700 exchange credit and sell you the new $ 300 model.
Even older Galaxy models have decent discounts. Galaxy S9 and Note 9, for example, offer you a $ 300 discount on the price of a new phone. And if it comes from a Pixel, Pixel 4 will give you a credit of 600 USD, which will bring the price of the S20 model to 400 USD. Pixel 3 from 2018 will offer you 300 USD from the initial price of the S20 model. And even the mid-range Pixel 3a will give you $ 200 off the price of a shiny new S20 phone.
Google also has its own exchange program for Pixel phone purchases, but it is fading in comparison. The company offers a maximum credit of $ 265 for a Galaxy S10, less than half of what Samsung offers for the same device. Even for its own previous-generation Pixel 3 model, Google offers a maximum exchange value of $ 165 for a Pixel 4, compared to Samsung’s $ 300 credit for the same phone made by Google.
Samsung clearly knows the value of motivating customers to stay with the Galaxy brand
A widely quoted adage states that acquiring a new customer costs five times as much as retaining an existing customer. Samsung may not offer anywhere near the level of software support for the Google exchange market and, damn it, even quietly sell its users’ data! – but when it comes time to think about buying a new phone, Samsung clearly knows the value of strengthening its relationship with existing customers and motivating them to stay with the Galaxy brand. Google, on the other hand, seems to be doing little more than a symbolic effort.
(And by the way, this isn’t just on the phone side: when it comes to smart speakers, where Amazon absolutely sacrifices Google, despite having a worse target product, Amazon wisely encourages Echo owners to trade your devices to receive store credit plus an instant 25% discount on any new Echo product Google launches many new smart speaker models, but does absolutely nothing to encourage the same brand loyalty and repeat purchases among the owners of their old products).
When I think about all the things Samsung announced this week, the phones are definitely everything everyone expected them to be: attractive, technologically impressive, and probably the exact amount of oomph needed to maintain Samsung’s dominance. on mobile technology. But the circumstances surrounding these phones seem much more important to me, especially in the broader sense of what Samsung is doing to support its technology and strengthen the loyalty it has worked so hard to create.
We can talk endlessly about how Google could position its Pixel phones and market them to the table, but even if it manages to gain new users, it needs to come up with a smarter strategy to keep up the momentum and create cars. -propagation. customer loyalty cycle. And, as Samsung reminds us all this week, you don’t have to look far to find an example of how exactly this should be done.