Loyalty Truth

I’m honored to have made strong alliances with respected people in my industry. Though I wouldn’t turn down sensible sponsorship, each of the icons on the right hand panel of the Loyalty Truth are there through mutual agreement, not due to an advertising deal.

Once in a while, one of my strategic partners gives me time on the soapbox. I wanted to share a piece here written about the impact of social media on loyalty and millennial marketing.

This was originally published in the Loyalty Guide, a great publication available from The Wise Marketer which I would encourage you to add to your library. A free 50-page Executive Summary, including chapter samples, table of contents, text searching, licensing and ordering details is available here.

How to earn loyalty from social media and Millennials

With data-driven marketing starting to resemble a mature industry, progress and change are clearly just around the corner, according to Bill Hanifin of Hanifin Loyalty. If you agree that the industry has its origins in the American Airlines AAdvantage programme in 1981, and in light of the first North American credit card rewards programme being launched around 1992, then the industry itself is something like 20 to 30 years old. In which case it’s time to stop leaning on the excuse that “we’re still learning” and assume the responsibilities of loyalty marketing adulthood.

For years, Bill has been asked the question, “Does loyalty really work?” and, with growing patience, he answers the question with a practised response: “Yes, it does work. The concept of measurable marketing programmes that link customer and transactional data is more attractive than ever”. I also explain that the magic of successful loyalty marketing programmes lies in attention to the details of execution, the diligent usage of collected data, and attention to financial measurement.

As Bill has turned his attention to recrafting loyalty programme designs to engage Generation Y, he has noticed that value propositions are changing and the communication channels used to convey promotional messages are also new, untested, and evolving before our very eyes. The key to successful ‘Millennial marketing’ lies increasingly with the effective incorporation of social media tools into our communications plans and, despite what you may read on Twitter, there are not nearly as many ‘social media experts’ around the world as you might think.

Loyalty programme sponsors are launching communities, setting up Twitter accounts and Facebook fan pages, and some are even rewarding members with promotional currency for updates on social media sites. With more of this activity being evident in the market now, the new question that he is being asked regularly is, “Is this social media thing here to stay, or is it just a fad?”

That is a valid question on the surface, but his answer is another question: “Do you want to be able to communicate with the 80 million Millennial consumers in the US, a segment which is emerging as the most important economic force in the market, and equal in size to Baby Boomers?”

Of course, implied by his answer is the idea that we don’t have to like social media – and we don’t even have to necessarily understand it – but we do have to admit that social media and social networks are the preferred communication method of the Millennial consumer. While growing rapidly among the 18-29 age group, social media is also making inroads into older demographics as well.

In 2009, there were approximately 40 delegates at a loyalty conference who participated in a Twitter conversation during the conference. This represented about 10% of total attendees and the volume of Tweets during the event was less than significant. Interestingly, almost one year later, Bill made a quick evaluation of the Twitter accounts of those 40 delegates, and found that only a small handful were still actively participating and growing their network. This of course says less about Twitter itself than it does about how the core of the loyalty marketing industry is engaging with social media.

An increasing number of our clients and potential clients with whom we speak are active in social media and inquire about our depth of understanding of the tools. There is interest in incorporating social media into loyalty programme designs. Advertising agencies and specialty ‘new media’ marketing agencies are rapidly taking the high ground in this emerging area of member communication.

So, rather than waste time apologising for social media and wringing our hands over whether Twitter, Facebook, Mixx, StumbleUpon, or Propeller will survive, Bill is listening to clients and learning as much as he can to serve their growing needs.

Fred Reichheld told us long ago that we should listen to our customers to better meet their needs. We need to do the same with our own clients and exercise our own form of retention programme. Some 80 million Millennials may have different tastes from your own generation, but we need to meet them where they are and build transparent and open communication plans to build engagement and engender their loyalty.

This article is an extract from the 30 chapters of detailed coverage in ‘The Loyalty Guide 4’, which is The Wise Marketer’s latest 1,000+ page global guide to customer loyalty and engagement techniques, best practices, models, metrics, practical advice, market data and research. The report provides hundreds of detailed case studies, forecasts, trends, tables and visual materials to support new initiatives, presentations and proposals and represents a complete, portable reference library of customer loyalty, engagement and marketing strategy.