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Why the Best Customer Loyalty Programs Use Social

tags Loyalty Programs

Loyalty is not built overnight. Programs are strategically thought out to drive up a company’s KPI’s and increase their ROI. Traditionally, program benefits usually boil down to a “spend and get” model. 97 percent of loyalty programs rely specifically on transactional rewards. Of the 97 percent, 77 percent of these transaction-based programs fail within the first two years of being implemented.

Loyalty360 reported that 84 percent of consumers said they would spend more with retailers that offered points for activities other than spending. Yet, only 25 percent of loyalty programs reward customers for other forms of engagement. Customers want loyalty programs that offer a variety of opportunities, besides spending, to earn rewards. Modifying loyalty programs to include social media engagement is the solution that customers are looking for.

Social Media is Powerful

Social media is a gateway to one of the largest pools of people in the world. We Are Social’s global statistics provide insight on social engagement. Their 2018 Global Digital Report lists that the number of social media users worldwide increased 13 percent from last year and increased 7 percent in the U.S. With the number of current users upward of 3.196 billion, marketers need to take advantage of the enormous potential social media has in loyalty.

Brands Leverage Social for Loyalty

Social engagement creates a mutually beneficial relationship between the customer and the brand. Customers are happy to receive points for an activity other than spending, and, in return, companies receive valuable information about their customers’ specific interests.

Urban Outfitters’ UO Rewards program and Adidas’ Connect & Get Rewarded campaign already utilize social engagement. UO Rewards members receive points by using #UORewards when they post on Twitter and Instagram. #UORewards currently has more than 5,200 posts on Instagram. Adidas uses handouts during checkout that encourage customers to post about the brand on Twitter, Instagram and Facebook using #adidasStore to receive instant email offers.

Measuring ROI

It is naïve to think that this addition will come without any limitations. The first challenge is going to be how you measure ROI from social media posts. Urban Outfitters and Adidas have already conquered this challenge. The programs identify any online brand engagement by a social ID and link it back to an existing customer record. For example, Urban Outfitters asks customers who wish to receive points for social media usage to connect their personal accounts to the UO mobile app. When a customer uses #UORewards, they can tie the account back to the customer.

Once this information is linked, brands can use the data in various ways to measure the success of the program’s social component. The data can not only provide the brand information on which customers use social engagement, but it can be attributed to a range of purchase behaviors. For example, Adidas linked its customers’ social IDs to its CRM records, then tied them to its eCommerce system and determined that members who used the social aspect of the program spent 25 percent more than members who did not.

The ability to calculate the ROI from social media posts will be extremely valuable in order to determine if this tactic truly drives financial success.

Brand Exposure and Advocacy

It should be no surprise that what customers post on social media is public information. This information can be useful when it comes to loyalty and brand exposure. When a customer makes a post, it reaches his or her entire network, creating a digital snowball effect of exposure. The addition of social in loyalty programs has been proven to help brands acquire 45 percent more customers.

Social engagement not only increases brand exposure, but it tethers the customer closer to the brand. This interaction gives brands a front row seat to their customers’ top interests. When a customer’s interests align with the brand’s goals, they have the potential to become a brand advocate. The more a customer posts, the more connected he or she becomes to the brand. By leveraging existing customers, you can increase brand awareness, receive valuable customer feedback and develop long-lasting loyalty with that customer.

Brand advocates are proving to have more power with consumers than influencers because they are driven by their commitment and relationship with the brand while influencers are not as committed. According to the Forrester Research Inc., only 18 percent of consumers trust influencers while 92 percent trust brand advocates.

Building Relationships

One of the greatest powers of social media is its ability to allow brands to interact with customers directly and in a more meaningful way. It is important to remember that relationships between brands and customers should be mutually beneficial. Customers appreciate when their brand advocacy is recognized. This recognition creates a personal relationship between the brand and the customer that traditional loyalty programs sometimes struggle to build. The feeling of connectivity a customer has with a brand will result in longer lasting loyalty and ultimately a happier customer.

The value of a repeat customer is not a new concept. Loyalty programs have had success from strictly using the spend and get method in the past. However, there is no question that social media is becoming increasingly mainstream as it permeates every aspect of our lives. Marketers need to utilize the power of social media to not only take advantage of brand exposure, but to build loyal customers through social engagement and transform their best customers into brand advocates.

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