Putting a Price on Customer Loyalty

by admin on May 14, 2010

The proliferation of social media has enabled the customer to now interact with their beloved brands, turning traditional CRM on its head. The ability for a customer to rave about a brand, air concerns or even provide genuine insight on how a brand can improve on their product or service is now a given. Traditional CRM (customer relationship management) has lent to the convention that businesses had tools to engage and converse with their customers after a customer has initially engaged with the brand. The tables have been turned, where a back and forth conversation is now in play.

Twitter, Facebook, and Foursquare are the social media applications businesses have gravitated to in order to establish a more defined presence and promote conversations with their customer base.

Twitter will soon roll out a business center to allow brands to have multiple users contribute to one account, among other features. Facebook’s Pages (similar to a profile page) allow businesses to engage their customers by posting content, providing offers, allowing customers to post their own content and more importantly allow businesses to create custom pages to make no two fan pages alike. Foursquare is beta-testing a business dashboard which allows business owners to know where people are checked in, simultaneously allowing them to advertise offers if a patron is in close proximity as a way to entice them to come to their establishment, create custom badges, and to also allow business owners to engage the macro-foursquare community.

What we are seeing is a massive paradigm shift. First we saw legacy print mail take a backseat to e-mail and now what we are seeing is e-mail’s resonance deepen as social media networks have allowed marketers to glean valuable information from customer engagement within these channels. “Liking” a brand on Facebook, “following” a brand on Twitter and checking in to an establishment on Foursquare is providing crucial intelligence to these e-mail marketing managers whose job is to constantly tweak and improve the segmentation of their lists, thus providing increasingly relevant messaging to their customers. How that is done is by adding more attributes to a customer’s profile within a company’s backend preference center.

The confluence of social media and email marketing is here. What brands need to do moving forward is to not only embrace this change but localize their appeal. As paid search a few years ago was being used by local business to gain market share by directing traffic right to conversion, social media networks need to adopt a similar mindset. If a national hotel chain has a Twitter handle, for instance, it makes sense to instruct customers to include a local hashtag (e.g. #hotelnyc) on the end of their tweet, so their response is localized rather than being relegated to their national headquarters. Foursquare, since its inception, has provided regional access to users but it should follow the same principle with businesses leveraging its platform by creating local accounts to immerse the brand within a user’s locale. Facebook has created ‘community pages’ for groups of people who share an affinity for a business, cause, or brand. What Facebook needs to do is provide businesses with tools for their pages which will give the page a more local look and feel as way to galvanize their local customer base.

What might we  see in the near future? Based on what I’ve seen, social media applications, such as the ones mentioned here, will be licensed to businesses, allowing them to integrate seamlessly with their existing loyalty programs.

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