Does Apple’s Quiet Loyalty Program Make CRM Sense?

Apple has bumped up the discounts offered in a loyalty program available to customers who spend at least US$5,000 on its products over 12 months, TechCrunch reported.

It reportedly added unlocked iPhones and Apple TVs to the program as well.

Two weeks ago, Apple improved its iOS management tools, and speculation is that the company is seeking to improve penetration in the enterprise market while shoring up its position in the education sector in the face of increasingly fierce competition from Google.

The loyalty program has not been widely publicized, but “it’s not so much keeping it under wraps as taking a very focused market approach targeted towards particular enterprises or verticals, or the retail or education markets,” Mukul Krishna, digital media senior global director at Frost & Sullivan, told CRM Buyer.

“Why spend money on blanketing the market?” Krishna asked. Apple is “probably using a very sophisticated marketing automation system that helps them target potential markets.”

Gimmes for the Customer

There reportedly are three tiers in Apple’s loyalty program, based on how much a customer spends with the company over a 12-month period. Red tier customers spend $5,000 or more; green tier customers spend $35,000 or more; and blue tier customers spend $200,000 or more.

Such customers typically would be purchasing on behalf of IT departments or large enterprises or customers in the educational system.

“The program is not really a secret,” Ronald Gruia, director of emerging telecoms in Frost & Sullivan’s ICT Practice, told CRM Buyer.

Apple reportedly is now offering discounts as high as 8 percent on the Mac, up from 5 percent; and 10 percent or more on third-party accessories, up from 5 percent. Further, Apple apparently has launched a campaign offering discounts for purchases of 50 or more iPads that are greater than the typical 2-4 percent.

“They’ve crafted some marginally useful discounts for their biggest customers and improved the functionality for setting up iOS devices after an upgrade,” Denis Pombriant, founder and managing principal at Beagle Research, told CRM Buyer.

“Why not?” Pombriant continued. “Apple is showing it’s listening to its best customers.”

Fighting Off Competitors

“There’s a lot of lower-cost Android tablets out there now, and one of the primary factors for customers to go away from Apple and towards Android products is cost,” Todd Day, a senior analyst at Frost & Sullivan, told CRM Buyer.

“Offering better discounts and special pricing to large customers does help to retain their loyalty,” he added.

Although Apple dominates the education market in tablets, “technology keeps changing and there’s a lot more competition now,” Krishna said. “Especially in North America, there is a lot of experimentation with technology ranging from One Laptop per Child to BYOD in the classroom, to providing tablets and computers in classrooms.”

Google is pushing aggressively into the education market. In November, it unveiled Google Play for Education, a curated market distributing apps for teachers. Schools can place bulk orders for Nexus devices through the market, and Google also offers an app to help activate the tablets when they arrive.

Chromebook has become a serious challenger to Apple in the classroom, and some students in higher grades prefer a Nexus 7 tablet or Chromebook to an iPad.

Making Nice With IT

Apple’s recent upgrades to its iOS management tools, which now include mobile device management capabilities and over-the-air device setup, were to be expected, Frost’s Gruia suggested.

With the imminent demise of BlackBerry, Apple “sees an opportunity in the enterprise and an installed base coming to a decision point of whether to stick to BlackBerry or give the iPhone a try,” Gruia said. “So they’re trying to make things easier for IT.”

Richard Adhikari

Richard Adhikari has written about high-tech for leading industry publications since the 1990s and wonders where it's all leading to. Will implanted RFID chips in humans be the Mark of the Beast? Will nanotech solve our coming food crisis? Does Sturgeon's Law still hold true? You can connect with Richard on Google+.

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