Want Social ROI? Time to Design a Virtual Social Loyalty Program
by Leslie Ament
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.
Social Champions: The New BFF4 for Sales & MarketingEngaging 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 PracticesSome 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:
Suggestions for ways that loyalty rewards points may be redeemed include:
Return on Social Investment is TangibleOur 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:
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.
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