Monday, February 01, 2010

Social Media engagement to replace customer loyalty cards.

Social media is a customer relationship management medium. It is in its DNA. Allowing people to speak about brands, and interact with others gives to CRM program a brand new way to think. Now some people believe that social media engagement could replace customer loyalty cards.

Customer loyalty cards are indeed not used as they should, or at least companies are fighting to leverage the full potential. A loyalty reward program implies to create a service dedicated to data mining, to manage the information systems dedicated to it, and also people to create the appropriate message to the appropriate customer. And it is not as easy as it seems. Especially, mastering a loyalty reward programs requires a learn through experience process that could become longer than expected.

Now loyalty cards have been developed a while ago. About 20 years, and it might be the time to think about some new ways. I was reading not so long ago that companies like Directgroup and Prylos are thinking about using the mobile phone to replace the plastic gear. I believe they are right about that.
There are also a great potential in the digital ID concept: You could use your Facebook profile to use as your loyalty reward management system.

The benefit of the fan and follower systemtic is quite obvious…- You become a fan and/or follower when a brand becomes of interest for YOU as a customer- You become a fan and/or follower of your favorite brand when YOU are in a purchase process- You can check status updates on sales, discounts and promotions when YOU need them (not when the company wants to sell more products)

But in the end, it is very different to use a social media to interact with customers and drive sales. Customer loyalty reward program provides a great way for companies to analyse data.

A relationship between a customer and a brand must go both ways. While the customer gets discounts, the company gets data. And that is the key. Getting data from social software about customers behaviour is very difficult. To link a Facebook fan and its purchase in a store is nearly impossible.

I don’t think we can mix both ideas.