Every company needs to keep selling the new products it manufacturers and the same was true for companies like Samsung that launch new smartphone models almost every month. There are only certain number of people using smartphones so to whom do you sell the new models? After a while, you need to sell your new smartphones to people who already own your smartphones. The best way to do is, as is done by Apple, encourage people to upgrade to a newer model by returning the older model.
It doesn’t mean that you can return your older model and then you get the new model for free. You will get it at a reduced price. But in South Korea Samsung Electronics has introduced a creative scheme that will help you upgrade your Samsung model without shelling out a hefty amount.
Samsung is in the process of launching its latest models – Samsung Galaxy S7 and Samsung Galaxy S7 Edge. According to this Reuters link, if the customers go for a 24-month instalment plan offered through Samsung Card Co. Ltd. they just have to pay 7,700 won (approximately $6.35) every month in addition to the monthly instalment and after 12 months, when the new Galaxy S or Galaxy Note smartphones are launched, the customers will be able to exchange them for the device they purchased. This way they will already have a big chunk of the market ready for the next generation of their smartphones.
I think this is a good way of constantly offering your customers the latest upgrades without the cost factor. After all, the new version of the smartphone is always more expensive than the previous version and this keeps many people from upgrading. But if they are paying just a small amount with every monthly instalment, all they have to do is return the old model (which, can be resold to someone who is fine with using the old model) and get the new smartphone.
They have launched a similar program in the UK. This 9to5Google post explains the maths involved in paying the monthly instalments and how much you are actually paying to get into this loop of having the latest Samsung smartphone every 12 years. Is it an expensive deal? It depends on how much you are ready to pay to have the latest smartphone and the latest upgrade because to some people, that matters a lot and if it is not drilling a hole into their pockets, they wouldn’t mind paying a few extra bucks every month to cushion the expense.