Organizations can boost customer loyalty by better understanding customer behaviors and attitudes, and leveraging social media to create an army of brand advocates.
In the era of social media, marketers have been marginalized in their brand promotion efforts. In the past, they were information producers, and customers were mere consumers. But today, customers generate more information about brands on social networks, blogs, online communities and contact centers, while marketing teams struggle to consume and analyze this information in order to understand customers, their purchase patterns, acceptance rates and satisfaction levels. At the same time, the form, content and speed of this information also gives marketers an opportunity to leverage these new marketing channels to promote their brands by winning over detractors and developing customer brand advocates. Turning customers into brand advocates is not a simple matter. While traditional loyalty programs are geared toward rewarding customers for their spending behavior, companies now need to proactively engage with individual customers and reward them for their attitudes, as well. Until recently, it was difficult to identify a brand’s advocates and evangelists due to a lack of tools for data collection, mapping and analytics; additionally, older approaches of measuring advocacy — such as Net Promoter Score (NPS), customer interviews and surveys — have failed to validate individual customer satisfaction levels. Now, however, tools are available that gather and analyze unstructured data, making it possible to construct a 360-degree customer view and create an accurate and actionable view of customers and their satisfaction levels. For an industry such as travel and hospitality, where purchase decisions are more often determined by recommendations and online reviews than advertising, it is crucial that positive sentiments overwhelm the negative ones on digital media. To better understand customer perception of a brand, companies are now tapping into various touch points to gather information about their sentiments. By combining that data with information from other business functions, such as marketing, loyalty and customer service, they are building an integrated database that helps them understand customer loyalty levels.
From Satisfaction to Advocacy In the world of social media interaction, there are three modes of engagement:
• Follower-to-friends. A “brand-to-followers” interaction is usually seen as marketing, while “followers-to-brand” engagements mainly consist of customer queries or rants. Marketers often work to create the third form of communication, “follower-to-friends” (popularly termed “electronic word-of-mouth” or “earned media”). Such engagements can grow from brand-to-follower interactions, but they are even more valuable when they are triggered by the customer and are positive for the brand. Earned media includes expressions of satisfaction or delight about a particular product or service, referrals to friends and family and sharing of videos or images that are positive for the brand. Word-of-mouth marketing has always been considered one of the most cost-effective marketing tools, and this is even more true with the emergence of social networking sites.
The availability of customer data from social media helps companies analyze brand sentiment. Traditionally, companies used tools such as NPS to determine advocacy levels; but now, using tools such as social listening and text mining, they can understand customer behaviors and attitudes much more easily and quickly, enabling them to introduce new products or services that will be highly valued by customers. Building an army of brand advocates is not an easy task, as it entails gaining customers’ satisfaction and then winning their loyalty, both in terms of their behaviors and attitudes. By itself, behavioral loyalty does not necessarily reflect true loyalty, since there are many reasons why customers spend money on a company’s products or services, including the lack of a better option or higher switching costs. A customer can repeatedly repurchase your services or products but fail to refer you to their friends or advocate for your brand on social media — a much more useful (and profitable) measure of loyalty. A company’s most valuable customers are the ones who are both frequent buyers and effective marketers for the brand. Customer satisfaction, meanwhile, can be gauged through surveys that measure the customer’s willingness to recommend a product or service to their social circle. With the social circle now moving to digital channels, conducting surveys with a limited population of frequent and highspending customers may not be ideal in the long run. With new technologies, it is now possible to bring your entire customer base into the satisfaction measurement process and obtain an accurate picture of customer satisfaction.
Developing the Social CRM Ecosystem The much talked about customer-centric model and 360-degree customer view are possible when external data is mapped with internal customer data and combined in an integrated database. The internal customer data (behavioral data) can be obtained directly from traditional CRM databases developed from the loyalty and booking databases. External customer interaction points include social media, the Web, contact centers and transactional data from third parties. Once both databases are developed, they can be merged into an integrated database, in which customers can be mapped to their social identities (see Figure 1, next page). This integrated database lays the foundation for new-age social CRM and is a potential tool for much-needed marketing efforts, such as personalization, localization, direct marketing and targeted marketing, which can be further utilized to co-create products and services. Building the Customer Brand Score The integrated database segments customers on the basis of a score we call the “customer brand score,” which takes into account both the behavioral and attitudinal aspects of the customer with respect to the brand. As such, the customer brand score is a much better indicator than traditional advocacy tools such as NPS because it helps companies identify not only the degree to which individual customers are bonding with the brand, but also how much they’re sharing their sentiments about the brand, or advocating, to their social circles.