Social Networking = Advocacy = Loyalty? Maybe.

June 23, 2006 · 0 comments

There was an interesting write-up this morning on about the keynote address at a marketing conference yesterday that was given by Rick Ferguson, one of the editors of (one of the industry resources that I link to here on CompareRewards).
Ferguson talked about the impact that social networking could have on advocacy. “Mr. Ferguson said social networks are important for loyalty programs because they ‘attract advocates, or people who are champions of your brand.’”
Ferguson mentions HP’s online support forum which, in providing troubleshooting support and other tips, is creating loyalty for their brand. Huggies’ Baby Network has a large forum with 17,000 registered current or expecting moms. He also mentions ClubMom, which has both a loyalty (rewards) program and a huge online forum.
Not only do these social networks allow members to share information, but they can provide useful information to the companies as well.
“Currently, 100 million consumers worldwide earn promotional currency. In addition, loyalty points are the second-largest currency in issue, 58 percent of consumers worldwide own a credit card and 70 percent of grocery shoppers use a loyalty card.”
Ferguson posits that the build-up of all this data and all these people in these social networks, plus data that comes together thanks to mergers and acquisitions, is going to “enable the growth of coalition loyalty programs, or large, wide-ranging programs run by third parties such as the ClubMom and Upromise programs.”
I agree that social networking can provide very useful information for both members and companies. My site attempts to undertake that somewhat, with the posting via comments of members’ experiences with various rewards programs. The general public is willing to share their opinions, and their data — willingly or unwillingly (with cookies and beacons and loyalty card transaction histories, and the like) — but companies need to actually take action on that, to make changes and be responsible for maintaining and BUILDING loyalty.
It’s not enough to just send a monthly coupon to your newsletter subscribers. That’ll incent the subscriber to go to your store once to redeem the coupon. REALLY rewarding loyalty means providing incentives to your members or customers to continue to spend, to shop exclusively, to refer members to your program, to thank them for x number of years of active membership. Those who shop more get better rewards. Your core members are shown that they’re appreciated.
Otherwise, companies (including rewards programs) will find that this whole social networking thing is working against them. And that can be very bad for business indeed.

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