Oops! The input is malformed! Want Social ROI? Time to Design a Virtual Social Loyalty Program by Leslie Ament - BeyeNETWORK
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Want Social ROI? Time to Design a Virtual Social Loyalty Program

Originally published May 7, 2014

This part of the headline of this article bears repeating – a virtual social loyalty program. Properly designed, a virtual social loyalty program will enable brands to engage more intimately with their customers, facilitate loyalty, expand social influence toward conversions to commerce and fuel product innovation. Customers will tell your company what they want to purchase, when they want to purchase and how they want to purchase if you are listening and analyzing1 their conversations to create customer intelligence.

"Wait," say brands! "We have already invested in a social community2 with managers to engage with our customers and retained bloggers to help influence the online communities. How is this different and why the urgency?" As the number of users on social networks continue to grow – 48 million joined Facebook in the last three months alone – advertisers will continue to increase their spending accordingly,3 making it harder for brands to differentiate themselves and retain customer loyalty. Keep this in mind: genuine peer-to-peer influence with authenticity will always have more impact on commerce than paid advertising or search.

Social Champions: The New BFF4 for Sales & Marketing

Engaging with prospects and customers via today’s multi-channel environment is increasingly complex. Consumers are constrained by time, overloaded with information and tightening their wallets. Likewise, companies are resource-constrained in navigating micro-channels of audiences for various products and services. Prioritizing opportunities presented takes time and effort unless repeatable processes to triage and engage with customers are employed. As one end user articulated, “How much of your day do you spend on each social media platform? I’m finding myself getting overwhelmed by the amount of time it takes to be ‘engaged’.”

Enter brand advocates and social champions, a type of corporate “best friend forever,” if you will. Harnessing the expanded network influence of loyal, key customers is an effective way to augment sales and marketing efforts to engage with as well as to influence prospects and customers. Whatever metrics, methodologies or criteria one uses to identify and score customers as (a) champions and promoters, (b) best customer$, defined by annual spend or (c) most loyal customers, defined by frequency (Klout, Net Promoter and Customer Commitment or Customer Engagement Index scores are popular, but not necessarily applicable to all companies), it is important to fully understand the dimensions and logic behind each – and to align them with corporate objectives.

Effective Best Practices

Some organizations advised by Hypatia Research Group have had success in offering small discounts, advance notice of sales, coupons or loyalty program upgrades (i.e., advocate to champion) to these brand ambassadors complete with SWAG (something worth actually getting) or rewards when their followers convert to paying customers. We encourage brands to make these incremental thank you gestures rather than pay outright fees for promotional services, which might be perceived as bribes by others and thus lacking in authenticity (for example, retained bloggers or those that provide online product reviews for monetary compensation).

Other techniques include setting up a points system (not dissimilar to airline rewards type programs) to incentivize loyalty for certain behaviors. Those behaviors may include:
  • Completing a specific number of reviews on products or services actually purchased during a given year

  • Recommending products or services actually purchased to others in their network or in the brand’s community each year

  • Sharing one’s authentic experience by answering a certain number of questions posed by potential customers on products or services actually purchased.
This can be done within the brand’s own social community via commercial social media software programs, or on other ratings sites for these particular products. Examples include Angie’s List, CruiseCompete, TripAdvisor, Amazon reviews  and Consumer Reports.

Suggestions for ways that loyalty rewards points may be redeemed include:
  • A small percentage discount on future purchases redeemable after earning a specific number of social points.

  • Early access to sales, products or services before they are launched

  • Complimentary or discounted passes to local conferences related to the brand’s products or services

  • Certificate for dining free at brand selected restaurants

  • A seat on the brand’s customer or consumer advisory board

  • Meet-and-greet or cocktail reception with brand executives at local events or press conferences

Return on Social Investment is Tangible

Our point of view is that when it comes to social return on investment metrics, one size does not fit all types of organizations, functions or objectives. In support of tracking metrics, many software solutions and tools offer dashboards, drill-downs or other types of visualization to illustrate a variety of performance indicators such as:
  • Online sentiment analysis (positive, neutral, mixed or negative)

  • Influencer or net-promoter scores

  • Share of voice, volume and frequency of brand mentions

  • Product quality issues or innovation recommendations 

  • Brand reach and frequency

  • Customer commitment or engagement index

  • Competitive intelligence tracking
Our analysis reveals that most organizations measure social interactions best categorized as either: (A) listening and analyzing social conversations for sentiment trends, share of voice and demographics, or (B) engaging in social conversations to encourage customer activations, build relationships or propensity to recommend or purchase products and services. We strongly  encourage brand-invested companies to focus on the latter to spur loyalty and conversions through social or digital interaction and engagement.

Remember, while the tracking metrics listed above are a good place to start, there are more ways to measure the success, effectiveness and return on social investment. Although enterprise-level social business is still in an early adopter stage, organizational benefits realized to date, as illustrated in Figure 1, are significant when compared to percentages of annual marketing spend.

Figure 1: Return on Social Intelligence Investment: Branding & Marketing
©2014 Hypatia Research Group, LLC. All rights reserved.

More than advertising, direct mail, email or coupon promotions, winning the hearts and minds of consumers in our highly competitive, global and extremely commoditized ecosystem is essential for retaining market share. Our analysis reveals that "customer experience" is an intangible metric. In fact, our assessment is that customer experience management is a business process that is currently enabled by multiple types of customer-facing software technologies – not only social.

Bottom line: True customer engagement, based upon superior customer management best practices,5 has a higher probability of tangible outcome. Effective usage of social technologies, as part of the ever-evolving multichannel interaction with customers, may well create a differentiation for early adopters. Brand-centric organizations should carefully evaluate how virtual social loyalty programs would enhance their customer engagement initiatives as well as their bottom line.

End Notes:
  1. ©2013 Hypatia Research Group, A Social Analytics & Intelligence Vendor GalaxyTM Evaluation Study: Converting Contextual to Actionable Insights Plus Maturity Models
  2. ©2011 Hypatia Research Group, Benchmarking Social Community Investments: Best Practices & GalaxyTM Vendor Evaluations
  3. Facebook Inc. – Its recent advertising windfalls nearly tripled on a 72% increase in revenue in its first quarter and surpassed Wall Street expectations.
  4. Anachronism: Use of term “Best Friend Forever” – a term which gained popularity from the 1980s onward
  5. Defined as systematic business processes that ensure a good customer experience at all times, and at each and every touch point.

SOURCE: Want Social ROI? Time to Design a Virtual Social Loyalty Program

  • Leslie AmentLeslie Ament

    Leslie Ament, Senior Vice President and Principal Analyst at Hypatia Research Group is a customer intelligence management thought-leader and industry analyst who focuses on the business value of technology in regards to how organizations capture, manage, analyze and apply actionable customer insight to improve customer management techniques, reduce operating expenses and to accelerate corporate growth. Her research and advisory services include: Customer Analytics & Interaction, Advanced Analytics, Business Intelligence and Big Data Analytics, Social Media Intelligence/Text Analytics, CRM, Digital Marketing Automation, Customer Data Management/Data Quality and Governance, Risk & Compliance.

    Editor's Note: More articles and resources are available in Leslie Ament's BeyeNETWORK Expert Channel on Customer Analytics & Insight. Be sure to visit today!

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