If you are reading this blog, I think you have already accepted the premise that SoLoMo, or whatever you choose to call it, is the next phase of consumer engagement. When your stakeholders ask what the value proposition is, what is your answer? Do you tell them that well consumers are looking for deals and if we aren’t offering it we are getting left behind? Like my previous example of being offered a coupon for a furnace filter when I walk into a local home improvement store. There is so much more there, and that is where the real value lies.
According to Rhythm Media’s survey of their users, most users like brands and connect with brands in social do so to show support or loyalty. It is almost axiomatic that loyalty drives increased sales, but let’s review some examples:
- In the automotive game, Toyota saw an almost 6 percentage point increase in their loyalty numbers year over year, which translated to an increase in market share of 1.3%. General Motors, which saw a decrease, had a corresponding drop of 1.6%. Jeffrey Anderson article on Dealer Communications
- In the coffee game, Costa Coffee drove increased revenue from the top 5% of their customers through an enhanced loyalty program. For the social angle, Costa Coffee, based only in the UK has almost 1M fans on facebook, with 20,000 people talking about it. This for a coffee shop that I had never heard of before I started researching for this blog post. Meg Carter article in Fast Company
These are just two examples, and there are many case studies from companies that offer loyalty programs. Hitched up with an effective engagement strategy on social will provide a power-up to those numbers. I think the Costa Coffee example is pretty good given what seem to be very strong FB numbers.
Loyalty programs can drive increased loyalty. In one survey half of all respondents said they would buy more for more rewards. In the same survey 72% said that service drove loyalty, with 89% pointing to the service they received either at the first sale or wne resolving an issue as a way for the company to gain loyalty. Your SoLoMo strategy should be taking this into account. How do you provide service to the consumer either when they buy from you, or when they have a problem? In the furnace example did you reduce my frustration with buying the wrong size? For me that is more of a delighter than a 10% coupon. What if I had gone onto Twitter to confess that I bought the wrong size furnace filter again. Would your brand have reached out to me to get me back in the store? Little delighters like that will drive loyalty and loyalty will drive more sales.
And loyalty will drive more loyalty. In the same survey, 78% said they would spread the word for brands they love. Apple is always held out as the gold-plated case study. Even in the depressed days for the brand, its users were fanatic and would plead the case of their favorite brand to whoever listened to them. As a counterpoint to my axiom that loyalty increases sales, Apple’s sales were incredibly depressed during this time except in a few markets. So loyalty only can take you so far.
So, whither SoLoMo in all this? Just another way to increase that customer loyalty. Be there when the customer needs you, or wants you. Provide timely and relevant information and service to them. These are things that the corner grocer has been doing for years, but it needs to be applied to this new age. The ubiquitous nature of phones and network connectivity make it easier for the consumer to self-service themselves so the challenge is inserting yourself into that. That is what you need to figure it out. Once there, the numbers all prove that they will pay off, but you need to get them there.