social media and loyalty r1

Friday Oct 24 2011

The Planning AgencyThe Insight Led Agency

Today’s Topic

Social Media, its role in Loyalty

Our First Observation

Social media being touted as the Holy Grail

A new way to build loyalty

Our POV

Social media won’t replace existing forms of loyalty building, but add to them

WHY?

When we speak of loyalty, we’re looking at behaviour not attitude

Behavioural loyalty is fundamentally an outcome of recognition and differentiation

but in a business context not a social context

An effective loyalty marketing programme recognises and differentiates between

customers based on value or potential value to the organisation

Don Peppers on Customer Management

Peppers and Rogers, 2003, replayed by Vladimir Dimitroff, Prism Consulting London on Slideshare

A social media programme on the other hand talks to customers based on social influence not

business influence

http://online.wsj.com/article/SB10001424052748704637704576082383466417382.html

There is an inherent loyalty issue in this

People are rewarded based on popularity not actual transaction or purchase

The corresponding impact is ALIENATION

So can social play any role in creating loyalty?

YES

This role must be carefully understood however and the discipline introduced in areas

where of genuine strength/advantage

What social is really good at?

Enhancing Experiences

Enhancing Empathy/Exposure

Understanding Issues

If Singapore’s leading taxi service were listening to customers on social media this

is what they’d know

People are pissed off about

peak charges

People are pissed off about

waiting time

People are pissed off about pick up refusal

People are pissed off about aggressive driving

Many companies don’t know how to listen, and how to act as a result

They are, in effect, Social Cripples

A company that failed to listen and act

It’s ok to pick a fight. Just not with the wrong person! Unit did just that. It refused to fix musician Dave Carroll’s guitar that the airline broke during baggage handling. Dave (clearly disgruntled) did the only thing he could - write a song about it!

The rest as they saw was history.

http://www.youtube.com/watch?v=5YGc4zOqozo

DKNY had its site taken over by PETA (to protest rabbit fur) that cleverly used

profile pictures and message

posts in a coordinated

move that made their page look

like this.

Comcast’s service was so bad, it led to one individual setting up a site called Comcastmustdie! A viral video that had CC technician fall asleep on the phone after being on hold for 1 hour with HQ, went super viral on You Tube. Then came along Frank Elliason Named Time Twitter Man of the Year, he took 8 employees from customer service and set up Comcast Cares. A service that used Twitter to answer queries, acknowledge issues and

do its best to resolve them. IN 2000, xxx decided to take down Comcastmust die. The brand didn’t need it any more, it had learnt and responded to the issues raised.

Listening is fundamental to any social media strategy designed to build loyalty

The starting point to success

The second area that social media is good at is enhancing experience

This is relevant given what most organisations today have come to resemble

IMPENETRABLE FORTRESSES

Companies can use social media to break down the walls between them and

their customers

Companies that are doing so effectively?

Companies that are doing so effectively?

Fairprice was Singapore’s first supermarket to set up a presence on Facebook. The brand uses the page to not just keep customers up to date but also to respond to queries.

One of the few brands to measure progress, Fairprice uses a variant of NPS to understand how it is improving strength of customer relationship.

Companies that are doing so effectively?

A lot of us have heard of Twelpforce. But basically, it’s a service from best Buy that advises clients on technological issues they have with gadgets. The genius is you dont have to have

bought the gadget from Best Buy to receive advice or an answer!

Social media can enhance relationships by addressing issues key to them. Often enlisting the help of a

brand’s very own customer base

The third area that social media is good at - building empathy and exposure

3.22m pages of content on Google

We are Social developed this terrific idea for Heinz. It allows buyers to send the can as a get well card with a prsonalised message on it. Absolute genius!

That led to 3.22 m pages of content on Google.

Warren Buffet the rich should be taxed more3.16m pages of content on Google

The 4 Seasons Hotel, AtlantaReicheld himself, the high priest of Loyalty, talks about 4 Seasons and how during the Atlanta Olympics they didn’t raise room rates but kept them the same. Giving regular

customers preferential occupancy. How loyalty inducing is that?

What we need to understand? This kind of loyalty is attitudinal not behavioural.

There may or may not be a commercial correlation.

Social media is fun, but metrics are key

One brand has measured fans true worth

FairPrice NPS

Neutral, no. of real fans (promoters) v/s detractors and passives calculated with constant measurement along the way

Tips for measuring success

Use as many business drivers as possible (Fournaise report)(revenue, sales, profit, cost elimination)

Speak the language of your CEO - he gives you the investment you need

Beyond measurement, beyond academic truth, how do you make social media a

reality in your organisation?

There is only one way

Through understanding and

Involvement enterprise-wide

Ways to instigate thisManagement Presentations

that show what your audience is saying about

you

Workshops that facilitate an an understanding of social media and how others are

using it as part of their strategy

Evangelistsand the creation

of public support for

them and their teams through

the CEO

Social media structureListeners

Action-takers Executors

Thinking of using social media to build loyalty?

1. Be aware of the two types of loyalty -

attitudinal and

behavioural - consider which is more

appropriate for your business

2. Don’t hasten to shut down traditional transaction

based programmes,

recognise the value

they offer - that social media cant or wont.

3. Listen, understand and

then act.

Ensure your conversations are attuned to those of your customers’.

What they are saying is out

there.

4. Measure your success.

Quantify it in business

terms that your CEO

will understand.

It will get you the

investment you need.

5. Involve your entire

organisation in the

programme.

You will not succeed in

your endeavours

unless you do. Involvement is key to success

Thank You and Questions For answers, e-mail me directly at patrick@theplanningagency.com.sg