How can social media drive customer loyalty?

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By: Wise Marketer Staff |

Posted on August 24, 2011

How can social media drive customer loyalty?

There are not many people who don't value rewards, simply because the feeling of being wanted is an emotion that we all hold dear and strive to achieve. But, while retailers worldwide are playing on this basic human emotion and driving customer retention and sales through loyalty programmes, not all of them are getting it right all of the time, according to Bill Mooney, director of marketing services for GB Group.

Most current loyalty programmes are quite short-sighted in their approach, Mooney warns, offering basic 'points means prizes' rewards. But, to really elevate their position in the consumer's mind, retailers need to analyse the identity data they have about customers and use that insight to offer a reward that is personally relevant to their engagement with the brand.

Whether this takes the form of a supermarket offering a regular port drinker a set of crystal port glasses, or a sports retailer offering a regular buyer of tennis products an opportunity to obtain cheaper tickets to Wimbledon, brands must begin to break the 'one reward for all' loyalty barrier and find the loyalty element that fits each of their customers individually.

Is this where social media comes into its own? Well, yes, according to Mooney. Social media has been a game changer for the way that retailers collect data and interact with their customers. It has allowed them to gain access to more personal information about their target market than ever before.

In fact, retailers can now see in real-time what their customers are interested in, and they can also interact, ask questions, and learn. Monitoring the conversations that customers are having online can play an integral role in shaping a successful loyalty programme.

By increasingly harnessing the power of social media and using it as a tool for learning, retailers will be able to profile their customers with more accuracy and can therefore better tailor the rewards they offer them.

If businesses can use social media to help create an environment of perfection, where customers receive appropriate loyalty rewards, this will certainly have a positive influence on increasing the average spend from each customer over their lifetime or tenure with the brand. It should also help to increase the frequency with which they spend in the retailer's stores and via other channels, and it will also increase the average transaction value of their purchases.

"So it is no secret that, in a world where there is a real chance of people becoming saturated with loyalty programmes, online retailers need to be creative about how they give their loyalty programmes traction," concluded Mooney. "By harnessing social media, retailers can tap into the trust and emotions of customers and deliver rewards with a real emotional value, leading not only to more but also to happier customers."

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