Can social loyalty be taken too far?

Discussion
Apr 03, 2015

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?

Join the Discussion!

5 Comments on "Can social loyalty be taken too far?"

Notify of

Sort by:   newest | oldest | most voted
Kenneth Leung
Guest
2 years 8 months ago

Problem is, as a retailer, your money is made by selling products, not media clicks. You can have massive brand awareness and not necessarily sales. The key is to reward the shoppers separately from the ambassadors. The people who spend the money keeping the retailer is business should be rewarded differently than those who act as mouthpieces (which is really marketing).

Ralph Jacobson
Guest
2 years 8 months ago

Talk used to be cheap. It’s not any longer via social channels…if you truly want to build brand enthusiasm. Investing in online chatter makes sense, along with maintaining the purchase drivers that make sense, so the brand doesn’t get diluted with mass, untargeted promotions.

Bill Hanifin
Guest
2 years 8 months ago

Measuring the value of online influencers is an important step to balance these programs. The financial models used to justify budgets are well known when transactions are the standard of measure. When budget has to be justified on social interactions only (or to a large percentage), the calculation of ROI becomes more difficult.

Dan Frechtling
Guest
2 years 8 months ago
Loyalty programs driven by interactions are fine if you know what you want. Two tips: (1) Work back from a business objective based on ROI, and (2) Reward small steps to get there 1. Work back from a business objective based on ROI Decide what action to encourage. Liking or commenting on content is a low threshold that helps you raise exposure. Referring offers to friends is a higher bar that correlates more closely with purchase. Be sure you have the means to track actions in advance. These actions may not just be on Facebook they may occur on your… Read more »
Mark Johnson
Guest
Mark Johnson
2 years 8 months ago

Loyalty Marketing is more complex, more challenging than ever before. We have the pleasure of speaking to 3,4,5 CMOs/VPs of marketing on a daily basis. The biggest challenge they have is listening to (in an active manner) their customers and their suppliers listening to them. They are being spoken to by their suppliers/partners. They have no metrics as to what to invest in and what ROIs may/should be. Yet we are changing that, now and going forward. The Clarion call for marketers who practice loyalty is simplicity.

wpDiscuz

Take Our Instant Poll

Of the two, how much should loyalty points be driven by social media interactions versus purchases?

View Results

Loading ... Loading ...