Customer loyalty is a key aspect of sustained, profitable growth. Spending valuable resources to acquire new customers just to replace customer attrition is an expensive, zero-sum game.
Social media is the new shiny thing, lots of talk (noise) about it in the trade press, and some companies, like Best Buy, Ford, Southwest Airlines and Dell, seem to be having success with it.
“But,” you say, “I don’t have their budget or brand awareness.”
Even if you manage a small or medium sized business I believe you can use Social Media to build customer loyalty.
Consider for a moment the 5 Relationship Marketing Principles. The fourth states, “Good customers expect to be rewarded.” And the fifth is, “The second most crucial time is when the relationship is at risk.” Using these principles as the basis for your social media strategy you can craft a plan that is both affordable and effective.
Good customers expect to be rewarded.
“Rewarded” does not mean bribed. Rewarding your best customers can be as simple as acknowledging them and adding value, beyond the functional benefits they receive from your product or service, through the ongoing communication facilitated by Social Media.
Reach out and invite them to join you on Facebook. Encourage them to follow you on Twitter. Publish a blog with editorial focused on issues important to your best customers. Be sure they are the first to know what’s new.
This approach bring with it a number of profitability sources:
- They are more likely to buy from you again
- They are more likely to pay full price.
- They are more likely to tell their friends, and
- They are more likely to talk to you when something goes wrong. And something always goes wrong.
The second most crucial time is when the relationship is at risk.
Your best customers are also heavy category users. They know how valuable they are and they know what to expect from your product and from your competitors’ products. If they have a relationship with your brand, if your “brand” is more than a product with a name, when something goes wrong they are more likely to say something. This is especially true if they have a channel, like Social Media, that they can use to interact with you.
Before Social Media they told their friends, significant but not a huge problem, and, if you were lucky, they contacted customer service. Now they tell their social network, which represents a lot more people, and they no longer have the patience to wade through an IVR, designed to reduce costs, to tell customer service what went wrong. United Airlines is a living, or perhaps more accurately dying example of what this can do to a business.
Use Social Media tools to listen to and participate in the conversation. There are listening platforms that aren’t too expensive, Radian6 is one example, that aggregate the conversation from multiple sources based on keywords. Google Alerts is another good resource. It requires more work but it’s free, which is always nice.
When you hear complaints, either through listening or from one of the social media portals you have created, engage these customers in conversation. Listen to their concern. Provide meaningful, honest feedback on what you can or cannot do about the problem. The simple act of being there will be so refreshing to most consumers that your chances of turning a customer at risk into an advocate are high.
Hip Shots
- Social Media isn’t free and it isn’t easy but any sized business can use it to foster loyalty among best customers. It requires a focused and specific strategy and a commitment to the human resources required to actively maintain the program.
- Social Media, except for very specific situations like Dell, is probably not an efficient sales channel for small businesses. It’s most efficient when focused on relationship building with best customers.
- Use Social Media to build relationships with your best customers. It’s win win; they are the ones who will value the interaction and they are the ones who are worth the effort.
- And don’t lose track of reality. It’s a commercial relationship. Your customers aren’t going to be “friends” with your brands. Use Social Media as a portal to add additional value and foster dialogue with best customers.
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{ 3 comments… read them below or add one }
James,
I LOVE the practical advice you’ve put forward in this post. Really and truly. This point is so often missed: “They are more likely to talk to you when something goes wrong. And something always goes wrong.”
Great stuff. Thanks for the shoutout, but more importantly, thanks for giving small biz something to hold onto in this SM craziness, and some real points for how to make it happen.
Best,
Amber Naslund
Director of Community, Radian6
@ambercadabra
Some great points here. We are a small business that believes we can add value by being the go-to people where linen and uniforms are concerned by providing info through various social media channels. Small businesses are always trying to differentiate themselves and compete on levels other than price. Social media gives you the ability to demonstrate (video), educate (blog) and relate (Twitter).
I liked how you emphasized the “corporate” relationship vs. personal relationship businesses have with their customers.
I really enjoyed reading your post. The concept of “good customers expect to be rewarded” is missed by many companies large and small. And it’s really not just about good customers… All customers expect to be rewarded, appreciated, and acknowledged. This does not have to be a huge task and Social Media allows you to take a simple step to acknowledge your customers publicly. I don’t believe this should be the only step in your appreciation process but I would highly suggest including it!
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