Once Microsoft has gained new customers through advertisements and promotions of the new features of the Windows Mobile 7 Operating System, the question will be: “How are they going to retain their customers in the long term and not lose them when smartphones with new features are being published?”
Retention of customers is a very important aspect in business. The costs for gaining new customers is 5 to 10 times higher compared to selling products or services to already established customers. It is thus of the uttermost importance to hold customers and tie them as deeply as possible to the company in order to not only gain a big market share, but also to ensure future profits and growth. A study by the McGraw-Hill company came to the conclusion that “highly satisfied owners are more than 50% more likely to repurchase the same brand than those who are not satisfied with their smartphone”. Loyal customers are also more likely to pay premium prices for products than new customers.
Given this big incentive to retain customers, what strategies can be followed to ensure that customers will stay with the company? One of the most important aspects is a high-level of quality in products and services offered. A delivering or over-delivering of the promised features is a very good starting point to build a relationship between the company and its customers. A direct, honest communication even after the sales are being closed helps to build trust and increases the satisfaction of the customers. Creating a place or community in which customers, suppliers of the hardware, business professionals and Microsoft can share their experiences and discuss issues and further development provides a big help with this. But besides ensuring a high quality, a company can also choose to close-in the customers through products and services that cannot be transferred to other platforms e.g. the linkage of names to photos on Facebook. Thus, a high exit-barrier can prove to be a very successful way to retain customers.
In the past, Microsoft had problems keeping their customers loyalty, especially in the Smartphone market. Before the emergence of the iPhone, Windows Mobile had market share of nearly 50% with the biggest competitor being Palm. Due to the lack of innovation in the fields of User Interfaces as well as not keeping their latest Windows Mobile 6.5 supported with continuous updates, Microsoft is not at all being perceived as an innovative and leading company, resulting in a continuing loss of market share to the 18% share today. The major issue in this area is that in the fast paced environment of smartphones, keeping up to the latest developments and offering services that are either as well as the competitors or are proprietary is elemental to retain customers. If a newer smartphone or smartphone OS is being offered by a competitor, the customers will decide if the new services or technologies are worth to remain loyal to the brand.
Given these past problems in keeping customers loyal, Microsoft unofficially build some strategies to ensure a tighter binding of the customers to the company:
- Focus on customer experience, as we saw earlier, Microsoft does not focus on corporate users. Instead the Windows Phone 7 is build for everyone, including customers that have never pre-owned a smartphone before. The initial and continuous customer experience is one of the cornerstones of the new Windows Mobile 7 OS. An intuitive and easy to use interface that is very similar to the iPhone, but yet more advanced in this area will give users an easy access to most of the functionalities that they need and will drastically improve customer satisfaction. The keyword used by Microsoft is to provide an “integrated experience”. The close control over the hardware vendors (see Hardware requirements) will further ensure that the new features will be the same user experience on every smartphone and the lacking of these cannot be blamed on the Microsoft.
- Building of functional-hubs, to ensure that all information that the user needs is available in an instant, Microsoft build the new sorting structure named “hubs”. These hubs merge the different information streams and will show changes on the main screen. The focus in this area is to enhance the communication between people and thus concentrating on the core functionality of why customers use a smartphone. This will further enhance customer experience and be an innovation that directly aims at the key buyers, the average people.
- Mobile Gaming Feature, since the XBox Live features are proprietary to the Windows Phone 7, they cannot be copied. This imposes strong exit barriers to owners that would lose this gaming features since a transfer of data e.g. Trophies won in mobile gaming, would be inevitably lost.
In conclusion, Microsoft did actually listen to their customers this time and provided some very good steps to keep customers closely linked to their Windows Mobile 7 OS. The mixture of providing new, proprietary technologies and experiences as well as closing-in the customers through restrictions will have to show in the future if it was successful.
References:
Relationship Marketing by Martin Christopher, Adrian Payne and David Ballantyne, Chapter 1, Butterworth-Heinemann, 2002
CNet, "Microsoft hits redial in phone effort (Q&A), Feb 15, 2010, http://news.cnet.com/8301-13860_3-10452710-56.html
ComScore, "comScore Reports December 2009 U.S. Mobile Subscriber Market Share", Feb 8, 2010,
http://www.comscore.com/index.php/Press_Events/Press_Releases/2010/2/comScore_Reports_December_2009_U.S._Mobile_Subscriber_Market_Share
PCWorld, "Windows Phone 7: An in-depth Look at the Features and Interface", Feb 15, 2010, http://www.pcworld.com/article/189347/windows_phone_7_an_indepth_look_at_the_features_and_interface.html
