Unifying Loyalty, Rewards, and Social Media

A little over a week ago, eMarketer ran a very interesting story, “What Do Facebook Users Expect from Brands?” that speaks loud to social media affect on rewards programs. The article examined an ExactTarget study and “found that 58% of US Facebook users expect to gain access to exclusive content, events or sales after ‘liking’ a company, while 58% also expect to receive discounts or promotions.”

So let’s think about this for a moment. What this is basically saying is that consumers expect special considerations for liking a brand from the start. In other words, they expect rewards (something the “general public” does not get) right from the get-go … possibly even before they start purchasing anything. And yet loyalty programs are typical designed to reward the best shoppers of the brand.

Once again, this demonstrates how social media is changing the way brands are required to market and sell to consumers and smart brands will view this as an opportunity. Let me outline how this can be achieved by modeling a hypothetical rewards program that leverages social media and rallies around the reality as supported by empirical data in the ExactTarget study.

I suggest formulating a tiered loyalty program around two social media channels and then taking it one step further. Our objective here is to create incremental consumer commitment to the brand.

Tier 1

Do exactly what the survey states users are looking for. Create a Facebook fanpage for users to like and give them exclusive content, events, and small discounts and promotions for liking your brand. (Do be aware that Facebook “Like” will change soon … users will soon specify varying degrees of “Like.” You may “like” one brand, but “really, really like” another.) I am not sure of the future classifications for “likes,” but there will be some variance.

The value here is to get users to “opt-in” to a brand and stay engaged with the brand. The shortcoming in using Facebook for “community” is that Facebook does not provide enough user data for companies to do strong marketing campaigns. Still I see positive steps as this is an “introduction” to the brands loyalty program.

Tier 2

Create a brand community accessible from the brand’s home site. A community that requires people to provide their email address to enter and join the community. A community that delivers great content, allows users to engage with the brand and other users, and contains a compelling feature set typically provided by community software vendors such as Jive Software and SaaS companies like OneSite.

Brands must provide some incremental benefit for users “opting-in” to the community sign-up over a Facebook Like. In this scenario, the user is giving you more information about them (you need to have a plan of collecting richer data on the user over time), thus allowing the creation of target marketing programs. The value here is having that users data and targeted marketing programs increases monetization likelihood.

You cannot just “build the field of dreams and they will come.” The same is true for online communities. You have to have an awesome reason for them to come. Focus on great content, an easy to navigate user interface, a high level of engagement, and ability for users to provide their own voice. There are numerous articles available about considerations for great online communities. Here are a couple … “Where Audience Fits in Social Media” and “How 7 Startups Are Building Their Online Communities.”

Tier 3

Now we move off of social media (yes I can do that :)) and move to even greater brand commitment from users. The highest degree of commitment comes if your consumer is willing to pay an annual fee for their loyalty. In return they get great benefits – assuming they are truly loyal to the brand. Membership has its rewards and American Express is a great example. Starting at $40 per year, you can sign up and earn points for great products, travel accommodations, concerts, and much more. The benefits are extremely rewarding if you use the card often and the fact that you paid is psychological motivation.

The loyalty tiering model I have laid out highlights two very important facts:

1) Unequivocally, social media is a game changer. It is changing the way people do business and the way they make purchase decisions. Those companies that do not adapt will be trumped by those companies that do.
2) Social media is not a stand alone function. It must go beyond integration with other marketing endeavors and be unified.

Where do you see other opportunities for unifying social media with existing programs?

Make It Happen,
Social Steve

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14 Comments

Filed under brand marketing, brands, community, Facebook, loyalty, marketing, marketing plan, rewards, social media marketing, Social Steve, socialmedia, SocialSteve, Uncategorized

14 responses to “Unifying Loyalty, Rewards, and Social Media

  1. Do you think something like this to a lesser degree could be accomplished within the recruitment world. For example a referral rewards program that is advertised through social media outlets for a recruiter? (twitter, linkedin, facebook, bullhorn).Perhaps every time you refer a candidate who is submitted for a job you gain points and even if they don’t get the job but you have referred 5 candidates to a particular recruitment firm (lets just say the bond street group! : ) you get a gift card of some sort… etc. Not sure if I’m making sense and if you refer 10 candidates whom are submitted the gift card doubles etc.. and then certain rewards for referrals who are placed –May be all in the form of gift cards… I was thinking of this for myself buy maybe making it company wide and some what branding the company in terms of candidate referral PROGRAM instead of a candidate referral fee?
    Any thoughts on this are appreciated and perhaps how effective you think this may be… ?

    Thanks, hope you had a nice weekend.
    Dawn

    • Hi Dawn,

      I do not think that type of reward program would be a successful implementation. I feel the program would be games. That is, people would refer anyone. Not just good candidates, but anyone. Most search firms that have contacted me offer straight up cash for a referral that is placed. That is the best incentive and I do not think that can be topped. Maybe with some creativity things can be enhanced.

      But then again, I do not think the program you suggested is a loyalty program or reward program for consumers.

      Best,
      Steve

  2. Great article Steve.

    Fans do expect more from the social media experience. I’m sold and your vision for the future is inspiring.

    The team at Presence Films have been avidly reading your articles in preparation for the launch of a new kind of website that will allow fans to:
    1. Participate in the development of the film
    2. Become members of the films community
    3. Join one of the tribes from our genre films
    4. Pay an annual subscription fee during the development of the work
    5. Crowd-fund stages of the development

    The fans participation and subscription increases their rank in the community. They can even view auditions online and vote on cast.

    As for the content created, we’ll be giving that to the subscribers for free via download along with a whole bunch of special goodies they can keep as memorabilia.

    This shifts the model from distribution of films to subscription and brings back the revenue to Presence Films. We can still do theatrical distribution but with flare, holding cos-play style dress up events and so forth for community based fans all over the world.

    I have to say we couldn’t have done this without your most excellent articles. Thanks so much and keep them coming!

    Regards
    David Steinhoff

  3. Jim Matorin

    I would like to see more companies utilize some the listening tools that are now available and reach out proactively to select people, reward or even just acknowledge just to start the buzz.

  4. As outlined, this seems like a promising approach to build the potential cuatomer base for consumer brands, especially in more crowded segments – as part of a comprehensive program to add market share, or at least maintain it if the brand has a dominant position.

    But, shouldn’t we also pay attention to overall barnd equity, and avoid driving potential customers to expect discounts below “list?” Consider how the car comapnies have trained us all to expect major price promotions, to their detriment.

    Also, how does this balance aginst the need for more exclsusive or luxury brands to maintain cachet? Some brands work by creating the aura of scarcity.

    • Hi Henry, Great questions and I think you have a valid point. It should not be only about discounts. But brands do need to figure out how to give their most valuable customers something special. I am reminded of a story I read last week about a restaurant that was jammed on the weekends, but had little traffic on the weekdays. They created a “frequent flyer” program for the weekdays and those that hit a certain level got to move to the front of the line on weekends. It upped their weekday traffic and delivered value to the most important customers. Thus, discount not used, but a value was delivered. also helped to increase revenue … perfect design of a loyalty/rewards program.

      Best,
      Steve

  5. For me brands should do what people have always done make the people they interact with feel wanted. Listen when they talk, support them when they ask for help and be there. because they want to share what they enjoy, it’s not always money bribes but simple things like being listened to that will make someone share an experience with their 44,344,242 ‘Likes’.

    For many being part of a connected community is more important than the CEO imagines, I do like David’s focus on interaction and participation with a community. Down the line loyalty and support can and will be paid back but shouldn’t be the instigator for a brand from day one, you’ll get too many greedy likes and followers that way and it’s not natural [unless you’re from the 1980’s].

    Best to make it make sense support is something that people when they care.

  6. SL

    Hi Steve, great article on social media being a game changer in this landscape. Rewarding your fan base (whether small or big) is a great way to keep them engaged and feeling special. I think marketers tend to forget this aspect when they are creating different social networks for their brand. Fans tend to follow you on these networks looking to interact. We must remember to keep it dynamic and consistent for them.

    On that note, I was wondering if you’d be interested in sharing your articles with other like-minded ‘loyalty and rewards’ bloggers? If yes, please email me. I’d be able to explain all the lovely details then. :)

    Your blog is very informative and I would love to have you on board!

    Cheers and happy Friday!

    -SL

  7. Hi Steve:
    Enjoyed your article and thought process. Your idea of actually charging for a loyalty program is indeed out-of-the-box thinking in a Groupon world of “rampant discounting as a strategy”.

    I run marketing (full disclosure) for SocialTwist, a customer acquisition platform that drives viral customer referrals for businesses through the social networks of their customers. Clearly as you point out, social media has already changed the way people make purchase decisions. We put this into play through a platform.

    You talk about rewards and loyalty and their connection to social media. My view is that consumer incentives (that brands and retail already invest in heavily) should be linked to referrals, rather than be the giveaways of today. Tying this into social media creates a win-win scenario and seems to make sense. Your thoughts?

    Love to dialog with you separately in any case… Keep writing. You are an insightful voice in the mayhem.
    Vijay

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