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Social Loyalty Programs Reward Customers and Retailers Alike

Most marketers think a Facebook “like” is an endorsement of content, while users more often view it as a show of loyalty

The ability to combine traditional loyalty programs with social media holds great promise for retailers and brands trying to strengthen retention, says a new report by eMarketer. But there are several key steps retailers must take in order to be successful—or they’ll risk simply becoming another forgotten “like.”

The new report, “Social Loyalty: From Rewards to a Rewarding Customer Experience,” analyzes findings from dozens of third-party research providers and interviews with industry executives, outlining several best practices for marketers looking to improve customer loyalty.

Why? Because many traditional loyalty programs are not highly effective, eMarketer notes. While loyalty programs have been popular in the US for years—with the average American consumer belonging to 18 loyalty programs according to loyalty marketing publisher COLLOQUY—whether these members are active is another story.

“Points, coupons and freebies are great for grabbing initial attention,” eMarketer says. “But in the long run these promotions can’t make up for a lackluster customer experience. Through the use of social media, retailers and brands can identify and interact with the most profitable internet users.”

The full report examines the benefits social loyalty programs provide consumers and brands, as well as the challenges they create for marketers.

“Loyalty can be won through encouraging word-of-mouth and creating advocates, by raising a user’s social status, by surprising and entertaining shoppers in unexpected ways and also by listening to customers’ needs and suggestions and responding in a mutually beneficial fashion,” eMarketer says.

Key Takeaways from “Social Loyalty: From Rewards to Rewarding a Customer Experience”:

  • Brands that most often succeed typically encourage sharing, raise customers’ social status, develop highly entertaining loyalty programs, and listen and respond to feedback quickly.
  • Loyalty programs are only as effective as the overall 24/7 customer experience.
  • Using social media as part of a loyalty strategy is still a relatively new practice. Many brands and retailers are testing the waters and attempting to add a social layer to an established program while building upon already proven principles of customer relationship management.
  • Social loyalty programs provide brands with an unprecedented amount of customer data, but turning that abstract information into meaningful results is a challenge.

Major challenges for loyalty marketers addressed in the report include:

  • Data overload
  • Customer segmentation
  • Measurement
  • Privacy and permissions

About eMarketer
eMarketer publishes data, analysis and insights on digital marketing, media and commerce. We do this by gathering information from many sources, filtering it, and putting it into perspective. For more than a decade, leading companies have trusted this approach, and have relied on eMarketer to help them make better business decisions.
www.eMarketer.com

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