Are people more loyal to socially engaged businesses?

brand loyalty word cloud

 Are you more loyal to businesses that you follow on Twitter or Facebook?

Increasing customer loyalty is one of the key business objectives behind social media campaigns and the research points to the facts.

People that follow you on Twitter or Like you on Facebook are more likely to be brand advocates, participate in and share brand experiences. But they are also more likely to visit your cafe or bar more frequently, be repeat buyers and recommend you to their friends and family.

I for one know that it's terribly frustrating when you want to share a good experience on Twitter or Facebook and the business doesn't have a Twitter account or you can't easily find the Facebook page to tag and check in to. Making it easy for people to talk about you and share experiences is the first benefit from any social program.

Finnair is a great example: According to a senior manager

“The key to delivering quality is to innovate and act together with the customer.” Another executive explained, “The emotional tie is more sustainable than what can be bought with money or with frequent flyer miles.”

The company well understood that the key to successful interactions was to match the value orientation of its customers with its own values if it were to be successful in attracting a loyal customer base outside its home  market.

Source: http://information.aalto.fi/en/research/ressem/hiccs2012_jarvenpaa_tuunainen_final.pdf

I asked this question on Twitter a few days ago.

http://twitter.com/cathmarygeorge/status/219926645937676289 http://twitter.com/kiwafruit/status/219927126399397888 http://twitter.com/H_Davison/status/219927394272804864 http://twitter.com/ahmadnz/status/219929987229302784 http://twitter.com/JustinFlitter/status/219927985594183680 http://twitter.com/cathmarygeorge/status/219928277781983232 http://twitter.com/H_Davison/status/219929119146774528 http://twitter.com/kiwafruit/status/219930918587080704

We know that people generally need to see messages three to five times before they create a change in behaviour or drive an action. The light weight interactions that flow through our time-lines and news-feeds are key moments to foster and strengthen relationships. Those interactions are much more frequent and much much cheaper than Radio or TV ads. Social Media engagement is permission based where as traditional media is served up, interrupting the actual content the person is interested in. As long as the brand manager respect that permission and deliver quality, relevant, useful interactions the audience will grow.

The study, conducted by Constant Contact and research firm Chadwick Martin Bailey, analyzed the behavior of 1,491 consumers ages 18 and older throughout the U.S., and revealed a number of details about how people interact with brands on the world’s beloved 140-character social network. So, just how powerful is the Twitter connection between consumers and businesses? The study found that 60% of brand followers are more likely to recommend a brand to a friend after following the brand on Twitter, and 50% of brand followers are more likely to buy from that brand.

These findings mirror those from a previous report, detailing how consumers interact with brands on Facebook. The study found that 56% of consumers said they are more likely to recommend a brand to a friend after “Liking” a brand on Facebook, and 51% of consumers said they are more likely to buy a product after doing so. The findings from both studies seem to show that customer loyalty is about the same across both social networks. Any increase in customer loyalty is great news for brands, especially those lucky enough to make the coveted list of followed companies. According to the study, though, the chances of making that list are slim, as only 21% of Twitter users follow brands on Twitter, and of those, 79% follow fewer than 10 brands. When it comes to a consumer’s decision to follow brands on Twitter, exclusivity and access to promotions reign. Here are the top five reasons given by respondents:

  • 64%: I am a customer of the company
  • 61%: To be the first to know information about the brand
  • 48%: To receive discounts and promotions
  • 36%: To gain access to exclusive content
  • 28%: To receive content/information to retweet and share with others

For the most part, brand interaction on Twitter is still largely a one-way process. While 84% of followers read tweets posted by the brands they follow, only 23% claim to tweet about the brands they follow.

Source: http://mashable.com/2011/10/20/twitter-brands-purchase-intent/

More statistics about user behaviour

  • 67% of brand followers expect unique content from the brands they follow.
  • Of the people that do follow brands on twitter (21%) 36% of them follow just 1-2 brands, 28% follow 3-4 brands, 16% follow 5-9 brands and 21% follow 10 or more brands
  • 26% of them are under 35, 17% 35-49 and 13% 50 plus in age
  • 50% said they are more likely to buy a brand after following them on social networks

Source: http://www.socialquickstarter.com/content/104-10_facts_about_consumer_behavior_on_twitter

It also appears that Social Media increases viewer engagement on TV

The study tracked the engagement of 126 Millennial viewers watching episodes of “Conan” and “TMZ” along with their varying levels of social behavior (AdAge).  The researchers used biometric monitoring and eye tracking to effectively measure engagement.

The results:

  • viewer engagement while watching with a friend or connecting with a friend over social media was 1.3x higher than for viewers watching alone and not using social media
  • viewer engagement among those co-viewing apps (that allow conversation simultaneous to the program) was 1.2x higher than for those viewing along without a social app
  • despite the distraction of social media, viewers were more engaged during commercials than expected: eye-tracking results revealed that viewers responded to audio cues during both the shows and commercial breaks

Viewers also responded well to brands supporting the second-screen: AT&T sponsored a Team Coco app to use while watching “Conan,” and viewers who used the app were 33% more likely to view the brand favorably.

Source: http://therealtimereport.com/2012/07/03/social-tv-viewers-are-1-3x-more-engaged/

What is Customer Loyalty?

Marketers and marketing consultants all too often make the mistake of equating customer loyalty with customer experience. Whether out of laziness or sloppiness, this is a critical miscue in the measurement, analysis, and management of customer loyalty and experiences.

Loyalty is a relationship concept. While abstract, that concept is made tangible in the form of loyalty behaviors, the actions through which customer express their loyalty and which create value for a company. For any given customer, they express their loyalty to and generate value for a company by

• continuing to be a customer, which creates retention value • buying more (or more expensive) products and services and giving the company a larger share of their spend, thus increasing cross-sell or upsell value and • recommending the company to others, which drives referral or positive word-of-mouth value.

Every experience, every customer touch, and interaction is an opportunity to deliver on the company's value proposition and reinforce the relationship, as well as a risk of failing to deliver on customer expectations and weakening the glue of the relationship. Experiences matter because they affect and are part of the gestalt of the customer relationship. But the experience is not the same as the relationship, and loyalty is more than the sum of the customer's experiences.

Source: http://www.1to1media.com/weblog/2012/03/the_customer_loyaltycustomer_e.html

Bob Thompson says;

Products are all commodities, so trying to innovate is a waste of time because a competitor will just copy you. You can't compete on price, either, unless you're Wal-Mart.

Improve the customer experience, CEM proponents argue, and your customers will be loyal, a competitive edge is assured, and the profits will roll in!

Really? This doesn't jibe with my personal experience as a consumer, where both product and experience are important. For example, when I bought a new BBQ grill I chose a Weber grill because of its innovative design (product). However, I purchased it from Home Depot because it had the best multi-channel purchase process (experience).

For some it's all about the car. But for others the dealer experience matters a lot, too. Chris Travell, VP of the Automotive Research Group at Maritz Research says that car makers continue to innovate but find it hard to get an edge with their products. Result: at any price point you can find several cars will similar features. But there are still large differences in the customer experience, so car manufacturers are focusing more attention there.

Travell says that American cars have become more competitive in recent years, and have historically done a pretty good job delivering a good experience at the dealer, including greeting customers, sales hand-offs, product knowledge and delivery. Customers with the highest level of customer satisfaction are five times more likely to repurchase.

While there is no one "best" method for finding loyalty drivers, in my research of top performing companies I find that leaders are obsessed with asking and answering these questions:

  • What do customers in our target markets really value?
  • Which issues make our customers unhappy and cause them to leave?
  • What pleases customers and causes them to recommend us to others?
  • How can we turn customers into true advocates for our business?

Source: http://socialmediatoday.com/bobthompson/559683/what-really-drives-customer-loyalty-its-not-just-about-experience

Many loyalty programs integrate with mobile apps.

Over half of customer loyalty programs either have a social media or mobile communication-enabled component currently in place or in development, according to research recently conducted by VIPdesk and Banyan Branch.

  •     27% of customer loyalty program members prefer to utilize a mobile device to access program features
  •     32% of customer loyalty programs reward members with points or other currency for participating in social media and/or online discussions about their brand
  •     While only 17% of customer loyalty programs offer members a mobile application to use when redeeming rewards, another 30% have a mobile app currently in development: meaning that 47% of loyalty programs have a mobile app either in place now or will soon

Source: http://www.prweb.com/releases/customer_loyalty/social_media/prweb9462949.htm

 

Building loyalty through social channels is not just about specials, discounts and vouchers.

http://twitter.com/justadandak/status/219930418550542338

http://twitter.com/justadandak/status/219931344619323392

As individuals and brands building communities through social channels we must focus as always on our audience. It's not as much about US as it is about THEM. Loyalty is earned. Loyalty is the consequence of consistently exceeding customer expectations and constantly delivering a fantastic customer experience, on and offline.