Can social loyalty be taken too far?
Through a special arrangement, presented here for discussion is a summary of a current article from LoyaltyTruth.com, a blog published by Hanifin Loyalty.
Some of the digital communications habits we’ve adopted aren’t always "better," they just "are."
Instead of calling a friend to talk through a concern, we often engage in a long stream of SMS messages. Instead of sending a handwritten note to congratulate a friend on a personal accomplishment, a quick "Congrats" to their LinkedIn timeline suffices.
Some habits we’ve picked up in customer loyalty marketing are also showing signs of being trendy, with lots of adoption but not necessarily "better" execution.
To strike up authentic conversations with Millennials, marketers are shifting the emphasis of loyalty programs to the online channel. They are encouraging interaction in the digital realm and are willing to reward the activity by offering Millennials the opportunity to earn perks for interactions, not just purchases.
On the surface, the idea is spot-on and aligns with something we refer to as Contextual Loyalty, essentially treating customers like the human beings they are and meeting them in their communications channel of choice, closer to the point of purchase decision. Swept up in this wave of change are points programs. It is popular among industry pundits these days to label currency programs as "spend and get," dismissing all value associated with the model with one hand wave.
Everything in moderation, I say. Points programs can be expensive, create financial liability, and can fall short of meeting the expectations of digital natives — especially when the points feature of the programs are overemphasized. At the same time, in the rush to shift to rewarding online interactions, brands may find their programs falling short as well.
Even the most digitally conversant consumers may grow tired of having to tweet, favorite and post about "Brand X" to gain access to rewards. A social-only model tempts members to game the system, as even true brand loyalists succumb to the need to post quantity over quality. When volume posting is the key to rising in the ranks of a social loyalty program, the value of user-generated impressions are diluted and the program impact suffers.
Remember the value of authentic reviews, recommendations and posts? The more transparent, the more they express true brand love and serve as confidence-building evidence for others to shift their patronage away from a competitor. A balanced value proposition has delivered the best results over 30 years of loyalty marketing and no matter what new technology or digital communications channel you have to add to your mix, remember to keep some balance in your program structure.
How would you rate the value of loyalty programs driven by interactions online and in social channels versus those based on purchases? Is the backlash against purchase-based loyalty programs overdone?