Samsung's Service Problems may have Doomed it for Years

Rich Tehrani : Communications and Technology Blog -
Rich Tehrani
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Samsung's Service Problems may have Doomed it for Years

Apple's biggest global competitors are Samsung, and coming soon, Xaomi and Huawei but only Samsung has the global name recognition to be a serious counterbalance to Cupertino today. With the recent poor handling of battery-gate surrounding the Galaxy Note 7, the company showed it didn't handle the crisis as well as the design of the phone.

In fact, the reviewers raved about the phone and until the news broke of all the battery problems, recalls and potential explosions, Samsung had done an amazing job one-upping Apple.

As Rob Enderle points out however, service is a crucial part of selling to customers. the relationship and customer experience is a major area of focus for companies today and it should be. Social media makes it a lot easier to complain about a bad experience.

Many years back I realized the Internet made it so much easier to complain about a product or service which didn't live up to expectations. At the time the generally accepted rule was it costs ten times as much money to get a new customer than to keep one. The law needed updating in the age of the internet.

In 2001 I coined a new law, Tehrani's Law of Customer Service which states it takes 100x more money to attract a new customer than to keep an existing one. The idea being an exponential effect of negative publicity thanks to Twitter, Facebook, etc.

In other words, a few decades back it was difficult for customers leaving you to complain to more than about ten people when you upset them enough to leave. Social amplification took the ten people and added a factor of ten to it.

This is the challenge Samsung now faces. As Rob points out, Samsung was the only real counterbalance to Apple. If they don't get their act together quickly and turn things around, Apple will get that much stronger and take even more people into it's growing ecosystem.

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