Sony to streamline portfolio and focus on customer retention

by XB on 25th November 2014

in Featured Content, News

sony-logoSony held an Investor Day for its Electronics business in Japan earlier today, where it gave some initial insights into its plans for the mobile division. Sony will be providing a full strategic update on the mobile business in early 2015, but some of the key themes were laid bare now.

Sony has had success in its premium Xperia Z series range, reporting an increase in FY2014 sales within this segment, however the low/mid-range segment saw a significant year-on-year decline, as previously reported. So how does Sony plan to address this situation?

First of all, Sony will streamline its product portfolio. Sony specifically mentions that by reducing the number of products it will be able to improve the “resource allocation per product”. This is what many readers of this blog have been shouting about for years now: less phones, better support.

One of the slides attached below, show a number of competitor companies that have reduced their portfolio over the last couple of years. According to Sony, it has reduced its portfolio by 30% from 2012 to 2014. However, we don’t know where this number has come from as we count 14 models released this year (not including dual-SIM variants), which is the same number as in 2012.

What we did find really interesting from today’s event was how Sony’s customer retention rate has been steadily increasing. The customer retention rate currently stands at 35%, with Sony targeting 50% by 2017. This shows that customers that buy an Xperia device is increasingly likely to buy another.

Customer satisfaction will become a key driver in Sony’s future strategy. Sony says that a focus on retained customers will take precedence over acquired customers. One of the charts below, shows Sony’s Net Promoter Score (NPS) of Sony Xperia’s retained customers versus an acquired customer. The NPS for retained customers is significantly higher than for acquired customers.

By shifting marketing towards retained customers and increasing support of existing products, Sony should have a good chance of driving profitability and increasing customer satisfaction at the same time. Now we need to start seeing all of this put into practice.

In your view, what should Sony be doing to reverse its mobile slump? Are the above steps the right ones? If not, let us hear what you would do different.









Via Sony.

Thanks Clarence and Hendra!

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