BrainTrust Query: How the Rapid Rise of Social Media and Social CRM Impacts Customer Loyalty

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Jun 14, 2011
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Through a special arrangement, presented here for discussion is a summary of a current article from the Loyalty 360 blog.

According to the 2010 Colloquy/DMA survey, two-thirds of respondents were unable to express what the most important measure of social media success would be. All new media seems “promising,” but consumers and brands have a hard time defining what the promise is and what it should be.

To quote a CMO at a large Fortune 500 brand, “We realize there is potential in all of these new technologies and media and there is a need for us, but how do we define it? It seems to be a moving goalpost.”

The technologies that can create, engender, and enhance loyalty marketing, specifically, as well as CRM, CEM, and marketing/engagement in general, are very interesting — such as Social CRM and its ability to follow numerous web/mobile-based conversations and give meaning to them for their “additive attributes.” I do not look to these new technologies as a replacement for loyalty or CRM, but rather as a complementary technology that can increase the efficacy of existing infrastructures.

However, my question is, with this rapid proliferation of technologies, how can the individuals who run marketing programs for brands, merchants and banks of all sizes better understand this? How can they tell if the product (new media or packaged good) is going to be the next new Coke or Red Bull, the next My Space or Facebook?

I think this space is even more challenging with respect to bandwidth. We live in a day and age of increased responsibilities, opportunities and time constraints. I know most of my friends and colleagues are short on one resource: Time. How does the average individual have time to engage all of these new products and technologies given their lack of time?

According to the 2010 Cone Consumer New Media Study, more than 80 percent of consumers say they follow only five or fewer brands online, whether through Facebook, Twitter or an RSS feed. Marketers now have to question not only what the next new, breakthrough technology is going to be, but “How do you get to be one of those five?”

Companies, in my view, will be challenged with regard to where to next look for actionable data and how to quickly identify the new sites where dialogues are forming and can be measured and monetized in this quickly evolving social landscape. It will be challenging to not only keep up with Twitter, Foursquare, Flickr, Living Social, Gowalla, Facebook, the company blog, communities, etc., but also to keep up with the quickly evolving social media (not to mention mobile) landscape. The opportunity lies in the ability to get a comprehensive and consolidated perspective of the conversations happening across this landscape and to give it insight.

Discussion Questions: If most consumers follow five or fewer brands online, what loyalty marketing strategies should brands use to make sure they’re among them? How does social media bolster and perhaps complicate existing customer loyalty strategies?

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12 Comments on "BrainTrust Query: How the Rapid Rise of Social Media and Social CRM Impacts Customer Loyalty"


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Phil Rubin
Guest
9 years 10 months ago
There is very good research published that addresses the very question of what it takes to obtain and sustain customer engagement, and it starts with being able to make a customer feel valued. We often talk about the quid pro quo of what it takes to create customer relationships, and that means a balance of dialogue and doing. Mark, your point about bandwidth is right on and not only for marketers, but for consumers as well. They suffer the same time famine and potential for overload as everyone else. The implication here is clear: marketers have to be present and able to listen to customers based on the customers’ choosing, not the marketers’. It’s then up to the marketer to make the customer feel valued and make it easy for them to engage. One of the challenges for marketers in general and loyalty marketers in particular is that in large organizations there is typically insufficient marketing integration. Loyalty and CRM are often in one part of the organization while social is in another (often tied… Read more »
John Boccuzzi, Jr.
Guest
John Boccuzzi, Jr.
9 years 10 months ago
Social media and the untapped potential is very exciting and, at the same time, overwhelming. Does a CMO focus on daily deals through services like Groupon? Do they spend time and money creating strong and informative Facebook pages for people to follow, or do they use a service like smiley360.com to help them get their message out through independent bloggers? I recommend that CMO’s let small groups within their department experiment with several strategies. Create an environment in your marketing department that spurs on entrepreneurship and where failure is okay and accepted as part of the process. Without that safety net for employees, it is hard to ever let them reach their full creative potential that would be game changing for your company. IDEA: This summer create a social media competition within your company. Teams would be created by selecting individuals from different departments (not just marketing). For example, a team could include a brand manager, someone from HR, accounting and sales. These teams would then have 60 days to create and present a social… Read more »
Max Goldberg
Guest
9 years 10 months ago

The ultimate measure of success in any marketing campaign is sales. Social media is one form of marketing in a media mix. It is not the end all and be all.

Websites will come and go. Some will be broad and others will be niche. A marketer does not need to be a seer and divine which sites will succeed first time out. That’s the beauty of social media. For relatively little expense, it allows a marketer to experiment.

The key takeaway is to get involved. What works for one company may not work for another. Brands need to dive in and learn to swim as they go along.

Ryan Mathews
Guest
9 years 10 months ago

Social networks are best at…er….networking people, i.e., building community.

The difference between a good brand approach to social networks and a poor one is the difference between night and day.

Want to see a winner? Go to the Marmite page on Facebook and/or the Marmite website. They are nothing short of brilliant.

Want a “not so much” example? Look at Best Buy’s Facebook page which brooms complaints off to a form letter page.

Ralph Jacobson
Guest
9 years 10 months ago

Social media only enhances loyalty strategies. This is a whole new world of marketing opportunities. The costs are far lower than traditional advertising and the reach is far superior.

They key is to provide a resource for “followers” to utilize to stay on top of trends and product information without becoming a non-stop advertisement for your brand. No one wants to be “sold to” every time they hear from your brand. Balance your messaging with industry/category/consumer news and trends without mentioning your brand in each post/tweet, etc.

Additionally, it’s not like there aren’t myriad tools, both free and more robust, that can put a tangible handle on your ROI for your social media efforts. tweet.grader.com is just one of those free tools.

The brands that are typically followed appeal to the culture and lifestyle of the shopper, rather than to their specific product needs

Dan Frechtling
Guest
9 years 10 months ago
The averages can be deceiving. Ever since the earliest refer-a-friend programs, social marketing has invited differing engagement. The way to succeed has been to win the ambassadors. With today’s social media tactics, this may mean seeking Sharing rather than Liking or Following, which don’t necessarily signal engagement. So rather than thinking about the average social media participant, how do brands reach the upper 33% of the Cone study who engage with brands 2+ times per week? What kind of people share more? This month’s ShareThis/Rubinson Partners/MediaVest study suggested Sharers are not universally influential but rather category-specific. What kind of content matters? Dr. Yuping Liu-Thompkins’ YouTube study found the most important content qualities are entertainment and education, not production quality. Young users’ contributions are more influential. The ShareThis study suggests the very first click, not virality, determines success. At a minimum, brands should make it as easy as possible to share their content. How to find the category-specific influencers that spread the word is a bigger challenge. Cone suggests the biggest motivator by far is (not… Read more »
Camille P. Schuster, PhD.
Guest
9 years 10 months ago

If you had a network of people who like your product, how would you want to approach them? With what information? How often? What would you want to hear from them? If you can answer these questions, you have the beginning of a strategy. The huge difference between a traditional communication campaign and a social network strategy is that the social network strategy must be truly interactive, current and constant; facilitated, not led by the company.

Cathy Hotka
Guest
9 years 10 months ago

Ralph is right. The right way to approach social media is to inform customers, give them a glimpse of the future, ask their opinion, and engage them in the brand. Wrong way? Send an email every day. Ugh.

Larry Negrich
Guest
9 years 10 months ago

I’m with Max on this one. The goal is sales, sales, sales. Creating and executing a marketing plan to drive high social media engagement without driving sales is a great strategy to undertake if your goal is to better understand your company’s unemployment benefit package.

Create small pilot programs to find which combination of vehicles and messages work best for the product/service, then expand and build upon the winners. And a critical early step in this process must include a sales-based measurement system for social media initiatives. Every business must measure the success of the entire initiative and the contributing elements around their social media programs.

John Karolefski
Guest
9 years 10 months ago

It’s simply about engaging consumers in ways they prefer. An engaged consumer is a loyal one.

The important related issues are measuring social media in terms of ROI, as well as qualitative and quantitative metrics to evaluate the success of social media initiatives.

Robert Piller
Guest
Robert Piller
9 years 10 months ago

Great article. If you do not know the goal of your social media program, then how can you determine its success?

I agree with Max and Larry in that the core metric needs to be SALES. This may be short term, mid term or long term–but sales must be the true metric that you base your social media program around.

Too many organizations get caught up in “feel good” metrics, such as Likes, Friends, ReTweets and others–which may not have any correlation to sales.

Social Media Loyalty Programs need engagement by both the company and prospect in order to be most effective.

Communication should be consistent, as well entertaining or educational(or both), and the program should offer exciting benefits.

If it meets those criteria, your social media campaign can yield great results.

If not, it is wasteful, at best.

Bill Hanifin
Guest
9 years 10 months ago

Mark raises great questions and notes an important reality, that social media requires time–both for survey and understanding of the market and also for participation in chosen channels.

Social CRM buzz can be distilled to mean traditional CRM adding the variety of new digital channels into the inventory of contact points.

Brands don’t need to be one of the top 5, they just have to be among “the top 5” among customers that matter to them. In other words, if I am a hotel chain, I have work hard to be among the 2-3 hotel chains that a consumer may follow on Twitter/Facebook, etc. Achieving that goal is going to be related to value offered and the transparency of the communications sent.

Buffalo Wild Wings, Dunkin’ Donuts and Carrabba’s are each meeting with success through their use of location, game, and SMS based messaging and offers. These are good examples to track.

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