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Social media ROI, loyalty and the customer experience

While marketers know in their gut that social media is important as customers are clearly there and sharing, they often lack the return on investment to prove to executives why the investment is paying dividends.

Photo source: istock.com

December 7, 2016

By Chris Teso 

Retail executives have begun to question the role of social media marketing. While marketers know in their gut that social media is important as customers are clearly there and sharing, they often lack the return on investment to prove to executives why the investment is paying dividends.

Meanwhile, traditional loyalty programs that are often terrific at tracking and calculating ROI, such as customer lifetime value, are seeking ways to evolve and make themselves more relevant. For a growing number of retailers, they are addressing these dual issues with a single solution: the marriage of social media and loyalty.

Called engagement loyalty, this union also embraces messaging platforms and addresses several key issues for retailers. Not only does it bring ROI to social media and messaging, and increase the relevance of loyalty programs, but it also increases engagement and advocacy for the brand, deepens customer loyalty, increases spend and helps feed new customer acquisition. Last, it closes the loop on a 360-degree customer experience by connecting the dots between social IDs and personally identifiable information in the CRM or other customer database.

As the name implies, engagement loyalty begins with engagement. Retailers who have walked down this path start by asking their existing loyalty program members to sign up for social media rewards by linking their loyalty program account to their social media ID. Once these two are connected, retailers can reward customers directly in social media or messaging platforms for engaging with activities such as advocating for the brand, participating in a specific campaign, and more. The results are measurable and impressive.

For example, a leading outdoor and sportswear retailer recently conducted a study benchmarking its results from its engagement loyalty program to find that engagement, loyalty and spend all increased. Indeed, this brand's socially connected loyalty members are more likely than non-connected loyalty members to have a higher Net Promoter Score, of 79 percent vs 73 percent. And, share their activities on social media, at 53 percent vs 42 percent. Socially connected loyalty members are more likely to engage and become advocates on social media as they rewarded for doing so.

Moreover, socially connected loyalty members have an even greater level of loyalty and brand trust than average loyalty members. This is due in part to the fact that customers like being acknowledged and rewarded for their brand advocacy. And, engagement loyalty allows brands to do so in near real-time, quickly reinforcing desired behavior, and providing a pleasant experience with the brand which further cements a positive brand relationship.

Specifically, socially connected loyalty members:

• Have a higher trust in the brand at 65 percent vs 60 percent
• 62 percent mark the brand as their No. 1 in preference over competitors compared to 57 percent of nonconnected loyalty members.
• Socially connected loyalty members are less likely to purchase from competitors.

And, where retail executives get especially excited about the marriage of these disciplines is the fact that engagement loyalty can be directly traced to top-line impact. Illustrating this point, our retailer's study found that 75 percent of socially connected loyalty program members are more likely to purchase from the brand three or more times per year, compared to 68 percent of those that had not connected their social media accounts to their loyalty program account.

Indeed, these customers are also more forward looking as they are more likely to shop online now and in the future, and they are also more likely to make mobile purchases.

It makes a great deal of sense that socially engaged loyalty members would be more loyal to and spend more money with a brand that recognizes and rewards them for their participation. These are the very activities that make people feel acknowledged and appreciated and creates a sense of true value exchange in the brand relationship.

Engagement loyalty allows retailers to simultaneously move beyond vanity social media metrics like "Likes" and engage loyal customers in a way that increases engagement, loyalty, and spend while providing important customer data. And, just as importantly, it gives customers the personalization, recognition and experience they deeply desire. After all, today's customers are interested in an experience with their favorite retailers where they are recognized and treated as special, loyal customers regardless of the channel where they interact with the brand.

Chris Teso is founder and CEO of engagement and loyalty solutions provider Chirpify. Twitter: @christeso; LinkedIn: Chris Teso