87% customer loyalty : the magic recipe to make billions

In the last years, I’ve been very cautious in explaining to our clients how to increase customer loyalty. When I was giving conferences 10 years ago the equation was still “easy” to solve: more customer satisfaction led to increased loyalty. This equation doesn’t hold anymore. Yet one company achieves an incredible loyalty rate and drives billions out of it : Apple.

Apple achieves what is probably the highest loyalty rate in the world: 87%. More precisely 87% of current iPhone users have been loyalty to the brand (see this Kantar report for more information) which is way higher than the loyalty rate of Samsung at 62%.

Apple would never achieve such a score if iPhone users weren’t satisfied, right? In the case of Apple it goes actually beyond mere satisfaction. We are talking here about an addiction. An addiction to simplicity and to devices that do work. The quest for satisfaction was conceived in the past as “more and better service around the product”. The product was taken for granted and what firms were striving for was a way to differentiate through excellent service. Whereas Apple certainly has an excellent service too, their key to success is elsewhere. Customer satisfaction through simplicity is what drove the very conception of the iphone. Apple differentiated from the crowd through building simpler and better products and forged customers’ habits. This strategy is paying off today.

Users have been used to iOS in general and to the iPhone in particular. When the time comes to change phone, the choice is quickly done: either stick to existing habits or switch. Michael Porter found a name for it “switching costs”.

Conclusion

The efforts of Apple are paying off.

They first build differentiation through building better and simpler products. Customers get used to this standard of excellence.

Today, customers prefer to stick to a system (iOS) they know and to habits acquired over the years. This leads to an incredible 87% customer loyalty rate and leaves time to Apple for unlocking new business opportunities and conquer new market shares.

By Pierre-Nicolas Schwab Dr. Pierre-Nicolas Schwab is the founder of IntoTheMinds. He specializes in e-commerce, retail and logistics. He is also a research fellow in the marketing department of the Free University of Brussels and acts as a coach for several startups and public organizations. He holds a PhD in Marketing, a MBA in Finance, and a MSc in Chemistry. He can be contacted by email, Linkedin or by phone (+32 486 42 79 42)