Samsung wants to give its customers a small financial incentive to stick to its brand after exchanging the ill-fated Galaxy Note 7.
It's not easy to recover after a recall, let alone two recalls for the same product, and the whole Galaxy Note 7 fiasco has undoubtedly affected the company's reputation and finances.
Samsung has officially confirmed the second Galaxy Note 7 recall on Thursday, Oct. 13, but it doesn't want to lose its current Note 7 customers. In other words, the company wants to ensure that people exchanging their Galaxy Note 7 choose another Samsung device and not some other smartphone from the competition.
Analysts already estimate that millions of fans will remain loyal to Samsung despite the Galaxy Note 7 recall, but Samsung wants to improve its odds and motivate more customers to stay loyal to its brand.
In a press release on Thursday, Samsung announced that customers who exchange their Galaxy Note 7, be it the original model or the replacement unit following the first recall, will get a $100 bill credit if they buy another Samsung smartphone.
Meanwhile, those who would rather purchase a non-Samsung smartphone or just get a refund after exchanging their Note 7 will get a $25 bill credit.
The move comes as Samsung is trying to save its reputation and recover from the heavy blow it took with two recalls over exploding Galaxy Note 7 units. The smartphone launched back in August, but a manufacturing defect caused the battery to overheat and, in some cases, explode. The company issued a recall and offered $25 in bill credit to owners who exchanged their Galaxy Note 7, but also promised to fix the issues and relaunch the device.
Samsung put the Galaxy Note 7 back on the market just recently, ensuring customers that the replacement units were safe to use and would no longer overheat, but reports started piling up again that even replacement Note 7s caught fire. The company was forced to recall the Note 7 for a second time, which is estimated to burn a $17 billion hole in its wallet.
Bill credits of up to $100 will add more expenses related to the recall, but it might help Samsung save its reputation and boost customer loyalty.
The move follows a recent report from research firm Branding Brand, which found in its latest survey that 40 percent of existing Samsung customers will not purchase another Samsung device following the second Galaxy Note 7 recall. The majority of those who plan to move away from Samsung will go for another Android smartphone, while 30 percent will switch to an iPhone.
Samsung's decision to offer a larger credit to those who stick to its brand is likely an attempt to offset customer losses. By offering four times the amount customers would get if they chose to switch to an iPhone, for instance, Samsung hopes to convince more users to continue trusting the Samsung brand despite the Note 7 disaster.
It remains to be seen just how Samsung will play this down, but it has quite a big mess to clean up. Do you still trust the Samsung brand, or would you rather switch to a competing smartphone brand?
