From checkout to check-in

When Mark Peatey and business partner Nadim Saad launched in March, in the wake of their successful car finance comparison website, they put social media at the heart of their loyalty strategy.

Billed as “the Groupon for cars”, and backed by Seedcamp, Europe’s leading startup accelerator, CarRush offers discounts of up to 40 per cent based on “reverse group buying”, where members tell the company which car and model they want, and CarRush aggregates the best available deals, sourcing the vehicles in bulk.

“Essentially, we’re a club,” says Mr Peatey. “A club that’s all about creating loyalty through incentives, competitions and personalised communications.

“If you come to our site and see a great deal and think you have some friends who should know about it, you click a Facebook button and the deal, in the form of a unique link, automatically posts to your wall,” he says. “If two or three of your friends then end up clicking on the link, we attribute those referrals to you. In return, you get a kickback – a £50 Amazon voucher – and you get entered into a competition to win, currently, a home entertainment centre. We do the same thing with Twitter.”

CarRush is one of a new wave of disruptive businesses built on social platforms to drive loyalty; the fashion site FantasyShopper, which blends Facebook with gamification, is another.

Today’s consumers scour the social space for peer-to-peer reviews, red flags and recommendations alike

However, among many more established companies, fear about the inherent risks of using social lingers. This sense of suspicion has been fuelled by the experiences of several high-profile brands, including Paperchase.

In February 2010, the stationery firm became embroiled in a Twitter-storm amid allegations that it had plagiarised the work of an independent artist. Slow-footed in the fast-engulfing public relations fall-out which ensued, the company was forced to issue a “clarification” on its website and belatedly open an official Paperchase Twitter feed to counteract the barrage of critical Tweets.

“When you start trending worldwide for the wrong reasons, you can see why executives in many companies view social platforms as completely out of their control,” says Alex Halliday, founder of SocialGo, a company which builds bespoke social networks.  “Relinquishing that control to the masses can be a very scary thing to people who’ve been doing things differently.”

Nevertheless, the balance of power has irrevocably tilted. No longer can brands monopolise the conversation with their customers. Today’s consumers scour the social space for peer-to-peer reviews, red flags and recommendations alike. Few people book a holiday without consulting TripAdvisor or other travel review sites, or buy a household appliance without visiting price comparison sites.

This raucous free market of opinion, is just one reason why brands should forgo any attempt to try to control comment in the social space, says Ben Ayers, head of social at media buying agency Carat. “This phase of experimentation isn’t for the faint-hearted, but it is essential,” says Mr Ayers. “For the PR people, it’s about control or lack of it. But that horse has bolted. The risks of not being involved in social are seriously starting to outweigh the risks of listening and being part of the conversation.”

Mr Halliday agrees: “It’s far better to cultivate a positive community when things are going well, so that if there ever is a problem, then you have stored up social equity.”

So how should companies go about building up social equity? According to Stuart Evans, general manager (UK) of ICLP Loyalty, the answer lies in having a clearly defined strategy in place. “It should never be left to some junior in the marketing department, who does ‘some social stuff’,” he says. “It’s about working out who is accountable for social media in the business, who is responsible for doing it and do they have the skills and experience? There needs to be a clear policy, which has buy-in across the business.”

For companies who do have such policies in place, social is rapidly becoming integral to branded loyalty campaigns. American Express in the US, for example, has already experimented with embedding its rewards schemes within social and check-in platforms. Last December it trialled a campaign with Foursquare, in which customers could sync their Amex cards with their account on the geo-location network, to claim cash back at participating small businesses across America. US card-holders can now also link their accounts to Twitter for discounts at selected retailers and restaurants.

Mr Halliday thinks such schemes are a growing trend, likely to be adopted widely. “What does seem to be working very well is incentivising check-ins,” he says. “The next wave is definitely integrating social with card schemes, and things like Google Wallet which uses near field communication (NFC) to make the connection between transaction and rewards. I think that’s a huge growth area for companies.”