Social media is increasingly dictating the customer loyalty agenda as smartphones and mobile apps conquer the high street, writes Mark Palmer
Delivering instant gratification to a consumer is part of modern-day loyalty.
It can be in John Lewis with access to knowledgeable and helpful staff or clicking online and collecting in-store. Vodafone, for example, has flipped the negative experience of being on hold for customer service by guaranteeing to call you back soonest.
The irony that comparethemarket.com, a company which has disrupted the concept of loyalty in insurance, would be the one offering the loyalty incentives, in the shape of collectable meerkat dolls, may be lost on some.
But technology and social innovations have changed what brands do to grab customer relationship, and have also changed consumers’ ideas of what loyalty means.
Smartphone penetration is around 50 per cent in the UK and predicted to be 100 per cent in five years. In the United States, a study by Interactive Bureau reveals that 53 per cent of consumers have stopped an in-store purchase as a result of price comparisons using their mobile phone. Thirty per cent have done so because they found a better price online.
Being “liked” on Facebook, because you’ve given someone free stuff, is like being popular in a bar for buying strangers drinks. Calm down if you are a retailer being followed on Twitter. According to recent research by LBi, a third of all Twitter users follow at least one retailer.
Think you are ahead of the curve offering mobile coupons, tickets, store cards or boarding passes? Watch out - the latest iPhone software update has an app called Passbook, which puts all these different mobile-commerce offerings in one place and connects to the app store.
Built a mobile app? Sorry, it is only a temporary respite without bigger consumer insights, benefits and an active joined-up social community of users to go with it. Getting an app downloaded doesn’t mean it will be used. Being used doesn’t mean it increases loyalty. The ill-fated Comet electrical retail chain has an app with a geo-store-locator, barcode price reader and links to magazine product reviews. It didn’t make consumers more loyal to Comet.
Technology and social innovations have changed what brands do to grab customer relationship
Compare that to Amazon’s in-app search bar, which allows users to type in a keyword, scan a mobile bar code and snap a picture of an item for Amazon to match, not only on price but also on delivery. It is set up to make “showrooming” easy by checking a product in-store and buying it online. The app is synced to your online account. Your experience is personalised. Clicking to buy out-of-store is as convenient as can be.
Social and mobile can increase convenience, but also build new forms of loyalty and word of mouth. This is epitomised by Starbucks in the US. Its loyalty card migrated to mobile. It’s the biggest pioneer of mobile payments – more than a million a week. Under the “My Starbucks Idea”, consumers can suggest and vote on new product ideas. They can even suggest the furniture for a new store.
However, with social power also comes great social responsibility. When news broke recently that Starbucks paid no corporation tax in the UK last year, the initial four-day spike reached more than ten million users on Twitter. Research conducted by social media agency Yomego showed 1,400 unique mentions of “boycott” appeared from November 12 to 17.
Chief executives may want to control and departmentalise a company’s brand behaviour, its loyalty programmes, customer service, use of digital, social and mobile, but it just isn’t their decision anymore.