Loyalty Truth

eMarketer, a respected online source of marketing research, analysis, and insight, published a new report last week titled “Social Loyalty: From Rewards to a Rewarding Customer Experience”.

The report was based on research findings from dozens of third-party research providers and interviews with industry executives, and promised best practices for marketers looking to improve customer loyalty.

The report tagline read “Social Loyalty Programs Reward Customers and Retailers Alike”, and I was hopeful that I was about to tap in research providing new evidence of how communicating with customers across social channels could breed strong brand loyalty.

Regrettably, the report summary doesn’t shed any new light on the progress of various social loyalty experiments, but did provide endorsement of views shared by Loyalty Truth about how loyalty can be created among the growing legions of digital natives.

Here is my interpretation of a few of the findings that mesh with what we have been suggesting to be “Loyalty Truth”:

• Consumers are making purchase decisions based on word-of-mouth recommendations from friends in their social networks rather than listening to advertising through mass channels
• Listening to customers’ needs increases the mutual benefits of loyalty programs for both brand and consumer
• Surprise and delight can becomes a supercharged tactic when delivered in the context of game mechanics
• No amount of points or miles can offset a competitively subpar customer experience

In sum, the report noted that tapping into the social graph is a great way to spark the much promised “dialogue” from the first generation of loyalty programs. If data is the new oil, then social loyalty can reinvigorate the wellhead of customer data, encouraging people to share personal data with your brand at a very low cost of acquisition.

How brands catalogue this data, position it in support of marketing campaigns, and become more intimately linked with customers without breaching the invisible line of personal privacy is still an area of opportunity.

We’re finding that the real learning about Social Loyalty techniques is being won in the shady fringes of loyalty program execution. We’re currently involved in several projects where linkages between loyalty programs and social channels are being tested. It takes time and a disciplined approach to measurement to understand if rewarding for check-ins or shifting loyalty communications to new channels will pay off.

As we learn, we’ll share progress with readers of Loyalty Truth. Stay tuned.