Retail embraces social loyalty campaigns - but is a 'like' actually worth anything?

Realising the value of a like

Conventional methods of building loyalty – great customer service, flexible pricing strategy, incentivisation and product evangelism – still hold credence, but multi-channel retailers are looking at new ways of keeping the customer on board.

Companies such as Amazon have set the bar high, offering competitive prices, slick mobile functionality in the form of One-Click Payment and the Price Check App, customisable check-out screens and a predictive analytics engine that makes product recommendations based on customer account history.

Amazon is using the release of its own virtual currency Amazon Coins as a way of inspiring loyalty, offering shoppers free handouts to use in the app store.

Not every retailer can compete with Amazon. Advanced web functionality such as dynamic menu navigation and customised apps might be a step too far for some, however personalised Facebook, Twitter and Google+ brand pages are mission critical for social loyalty campaigns.

At first, I was a little skeptical of this lemming-esque, ‘like’ phenomenon, and whether virality could amount to loyalty. It seemed like a bastardised version of loyalty, grounded more on consumer greed and opportunism than any genuine affinity for the product or brand.

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However, speaking to industry experts such as Adam Grunwerg, a director at Searchable digital marketing agency and owner of investing.co.uk, changed my tact: "Under no situation should Facebook ‘likes’ be undervalued by businesses. It costs five to six times as much to bring in a new customer as it does to keep the old ones you have. A Facebook Page or even Twitter profile should be seen as one of the most important conduits for building on existing customer relationships or generating customer feedback."

This view is echoed by Play.com’s Marketing Director Adam Stewart, who tells Loyalty 360 that "fans continue to spend time on our page because of the way in which we engage our fans with new and exclusive content—whether it be further competitions, channel specific product offers or sneak peeks into future releases."

Facebook pages also provide the customer with a sense of empowerment. Brands are starting to reveal new products and prototypes, asking fans for feedback and suggestions.

In addition to creating a personal relationship and communication platform between the brand and the customer, the ‘like’ tool provides a simplistic means of calculating brand loyalty and engagement level in real-time.

Public pages mean that when a customer hits ‘like,’ it creates brand awareness on their own wall, showing future customers that a retail organisation is committed to customer feedback. The launch of the Facebook Graph Search will see brands appear more prominently in local searches based on friend likes and recommendations. The value of a ‘like’ increases in this hyperconnected environment, as retailers look to capitalise on virtual word of mouth and loyal fan communities.

The significance of ‘likes’ has been confirmed by the University of Cambridge’s Psychometrics Centre, which studied the profiles of 58,000 people in the US. It found that online activity can be used to make "surprisingly accurate predictions about users’ race, age, IQ, sexuality, personality, substance use and political views." The investigation channelled Facebook preferences into an algorithm, and created models "which were able to determine male sexuality with 88% accuracy, race with 95% accuracy, political leanings with 85% accuracy and religion 82% of the time." This information may prove helpful for retailers looking to draw up customer segmentations.

Vendors jumping on the social loyalty bandwagon

The importance of social loyalty campaigns is being recognised by a burgeoning vendor market. TagNpin builds on the phenomenon by installing a brand with a loyalty tab on its Facebook page. Users are turned into hyper-local social marketers, accumulating points for social activities such as likes, shares and friend invitations, which can then be redeemed for discount coupons.

Meanwhile American start-up 500friends has partnered with voice of the customer analytics provider Bazaarvoice to help retailers interact with customers, and encourage brand advocacy. Ecommerce giant Run.com is one of the beneficiaries: its loyalty programme includes social features such as badges and leaderboards, which incentivise users to create product reviews and recommendations. VP of Marketing Lucy Diaz tells internetretailer.com, "With this integration, we have increased the ROI on our marketing efforts by encouraging, rewarding and measuring the quality and quantity of social conversations taking place with our brand."

Going forward, the challenge for retailers may be to incorporate gamification into social loyalty campaigns. These initiatives throw fun, competition, achievement and rewards into the mix, generating unprecedented levels of customer engagement. The InterContinental Hotels Group’s trivia game "Win it in a Minute" is a prime example, rewarding right answers with club points that can be exchanged for air miles. It remains to be seen whether brick and mortar stores, who are turning to experiential marketing and timely check-out recommendations as ways of inspiring loyalty, can keep up with digital developments.

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