In the golden age of TV advertising, brand loyalty was dictated primarily by advertising spend. The brand had complete control of the message and whoever spent most gained the greatest loyalty. The market place has changed dramatically. Social media and the ease with which consumers can share information, opinions and insights has left many brands re-evaluating how they can optimise their engagement with customers and how to mine the valuable social data contained in social platforms, thereby increasing loyalty.
The customer has changed
Customer needs evolve at a rapid pace and nowhere more so than in the area of social networking. Although the use of social tools is increasingly independent of age and background, there is no doubt that the most prevalent active behaviours have their origin in the Generation Y tendencies of instant gratification and a desire to participate in ways that are rooted in status and interactivity.
Applying the 90-9-1 principle of social engagement, it is the 10% of active participants who present the greatest opportunity to influence the 90% of spectators who consume brand or user-generated content. This mass of passive consumption is still vital in contributing to brand perception, level of loyalty and purchasing decisions.
Regardless of the level of participation, for today's social consumers, if relevance and value is not realised in a short space of time, interest can be lost indefinitely. Brands must work hard to sustain the level of attention, which makes it extremely difficult to engender long term loyalty. The very popular game Angry Birds is a good example of sustaining and growing its following by introducing new levels, editions and content to drive over one billion cumulative downloads since its launch in December 2009 1 .
Some brands have struggled to keep up with their consumers and, in particular, understand and meet their needs in this increasingly social world. Others have made the mistake of believing that repeating the broadcast message strategy of traditional communications is an appropriate social approach - witness the number of airline sites where a Facebook page has been hurriedly created and populated with content from the company website and then left without regular updates or updates with little relevance or cut-through.
Customers increasingly expect the brands they use not only to have a presence on social networks but to continue engaging with their audience. Anything less risks a negative perception of the brand.
Loyalty and social engagement
Dell Computers learned early on that loyalty was built on listening and responding. This establishes trust and builds credibility, two of the key elements to any social interaction - and especially vital in the social space where every interaction can be public.
Loyalty in Dell's case stems from fully understanding their customers and their needs and wants - not from market research but from direct communication with a large and very active customer segment. After a number of high profile service disasters, Dell established a social space where faults and problems were acknowledged openly and promptly. Customers could request new features and suggest improvements - and receive feedback. Within a year, Dell became the darling of the non-Mac geek brigade and the brand became perceived as both innovative and credible.
Dell has also extended their successful social approach to their channel partners. They have recently launched training courses to leverage their social media best practices to support their own business and marketing efforts, in addition to tools, tips and forums 2 .
The opportunity is huge
No matter which segment of social behaviour a customer falls under, participating in social makes sharing the norm and as vital as the data shared, is the relationship data that links customers to each other and to other social platforms.
It is this social data that offers the greatest potential opportunity for brands. Currently, only 7% of European marketers use it to provide a personalised experience. With a well-chosen approach, it can enable the identification of customers across social sites. Giving customers the ability to reveal their unique identities on different platforms means that you can build a richer picture of their lifestyle and tap into new information that you might otherwise not obtain through your existing relationship, e.g. music preferences, date of birth, marital status etc.
Giving customers the option to login using their social credentials offers an opportunity to gain new social data insights. With access to the data comes access to the network of influence beyond the initial contact. Adding this rich social data layer is a huge opportunity for brands, especially those with loyalty programmes. Being able to connect behaviour in social channels to transactional behaviour via a loyalty initiative provides immense value in identifying the overlap in customers with high commercial value and high social influence. This will support the creation of more sophisticated segmentation and communication strategies in understanding behaviour across multiple channels and touch points to further brand advocacy and loyalty.
Rewarding behaviour in social channels is another opportunity to drive loyalty and is being considered by brands across sectors including airlines. Estonian Air is going beyond the frequent flyer programme by introducing a Facebook app (AirScore) to reward customers and fans for being strong online advocates without having to fly.
Integrating social into loyalty
Traditional loyalty models need to extend into the social world if they are to maintain relevance. At the same time, loyalty initiatives need to respond to customer expectations and activities on social networks.
It is essential that any social strategy complements the business strategy and that the initiative is driven by a business case and measured against well-defined KPIs and ROI. But it's equally important to ensure that the structure of the organisation is able to follow through on the strategy. Social is both cross-functional and inter-departmental. Within a company, the very notion of what comprises social will be understood differently in those different departments. A unified view is necessary if the strategy is to have a consistent and successful approach across all functions and meet its goals. Top level buy-in is mandatory for success.
When British Airways made the decision to embrace the internet wholeheartedly, they pulled together all the expertise within the company and made sure they understood the implications and its potential across all areas of the business. They created an internal environment in which to incubate plans and ideas and when a strategy was clearly established, the correct resource and expertise were injected back into the organisation to implement the plan across all areas of the day-to-day operation.
Things change and evolve quickly online - and especially in the social arena. Your social strategy must embrace the flexibility to respond to changes in market demands without sacrificing its integrity. A large part of that ability to maintain focus will depend on measuring and analysing the correct data.
Embrace social now - but with a strategy
If one is thing is clear, it is that doing nothing with regard to social is not an option. On the other hand, doing something and then letting it fade away through lack of engagement and a wider strategy is just as bad.
Social needs to become an integral part of any loyalty strategy. It provides brands with a significant opportunity to reinvent their value proposition to all consumers whether they are members of an existing loyalty initiative and a "creator" or "spectator" in the social sphere. Traditional loyalty initiatives still have a place, of course, but consideration needs to be given to how best to drive loyalty beyond a transactional relationship. Leveraging social data to build a richer understanding of individual consumers and their interactions across all your brand channels will present a clear strategy for creating a more relevant customer experience and a platform for achieving competitive differentiation.