Using Social Media to Enhance Customer Loyalty
July 8, 2010
Social media is certainly the hot topic in marketing today. Given the unique nature of social media – it’s viral, scalable, two-way, inexpensive communication – it deserves a lot of hype. Currently, though, many organizations are using social media as another “push” channel. In other words, they use social media as a means for one-way dialogue to broadcast the company’s message rather than engage the consumer. Additionally, many are using social as simply another vehicle to provide discounts and offers. Nothing wrong with that per se, but it sub-optimizes the potential of the channel.
My perspective is that social media can be a great channel to develop customer loyalty. Done well, social media can increase consumer engagement, add value beyond a traditional transaction and deepen the brand/customer relationships. The core of building loyalty through social media is in content, which can be company-generated and user-generated. In general, the communication goal of content falls into one of two categories: to educate and inform or to entertain.
The most prevalent content is used to educate and inform. Examples abound across industries, but in general, the goal is to provide relevant information that consumers will seek out and, ideally, forward to others. For example, home improvement chains can post a number of DIY videos to educate consumers on home projects. Likewise, sporting goods retails can post how-to videos to help golfers improve their game or provide online yoga classes. Airlines can provide information on travel delays and other travel information. Auto manufacturers can post online owners manuals and maintenance tips. Apparel and fashion retailers can preview new fashions, provide tips on accessorizing outfits, or highlight new designers. The list goes on and on, but virtually any industry can take content that most likely already exists and repurpose it for social media. Examples of user-generated content are things like product reviews, travel tips, and user forums (like the Apple users forum which has saved my bacon a few times).
The next form of content is entertaining content. Entertainment doesn’t preclude other messaging, but the primary function of this content is to amuse. Entertaining content can take the form of videos, contests and games, photos, polls, et al. Examples include Budweiser which has a “paint-your-face” feature on Facebook linked to World Cup soccer, as well as information on their music and NASCAR sponsorships. The Sports Authority posted previews of humorous videos featuring Michael Strahan on YouTube with links on both Twitter and Facebook. In addition to posting pictures of ships and destinations (company-generated content), Carnival Cruise Lines allows guests to post their own vacation photos (user-generated content).
Using social media to build loyalty is not without its risks as well. Companies lose a degree of control over messaging. User-generated content is outside the control of the company. And the viral nature of social media works both ways – negative comments can be circulated among the masses just as quickly as positive comments. Therefore, companies that engage consumers via social media need to have personnel and processes set up to quickly respond to any negative feedback. Social media marketing also requires an investment of resources to create and post content and manage the subsequent dialogue via social channels. The investment is further confounded by the limitations on measuring ROI (see my 5/25/10 post for more on this topic). That being said, the upside to social media outweighs the risks. I am convinced that, when done well, social media holds great promise as an avenue to build customer loyalty.
