Measuring Loyalty of Social Media

We know that companies that engage their customers online gain a unique ability to build loyalty beyond what is otherwise possible. Social media sites teem with activity between brands and consumers, and these online interactions often present opportunities for building engagement and loyalty unavailable in any other channel.  However, they also present a challenge because social customer relationship management requires new methods of measuring impact, particularly in the case of loyalty.

Companies are exploring ways to link activity on blogs, social networks, private communities, microblogging sites (e.g. Twitter), and forums to increases in loyalty using new and established measures.  In the brick-and-mortar, email, and e-commerce channels, specific behaviors often indicate loyalty, whether attitudinal or behavioral.  These behaviors include actions like purchase frequency, survey completion, and loyalty program participation.  However, in the case of social media, since most social sites aren’t transactional, the increased interaction often linked to behavioral loyalty doesn’t necessarily equate to a stronger, more loyal relationship.

Clicks and visits aren’t always a reflection of engagement.  More accurate measurements are number of postings, completed profile percentage, participation in polls and surveys, or service-related questions asked or answered in a forum.  These activities make attitudinal loyalty more measurable within the social realm than in other interaction channels… and closely correlate with success or failure of a brand’s blog, community, or other social initiative.

In fact, “listening” to customers via social media helps companies to measure customer loyalty, and delivers the added benefit of helping to build loyalty.  Social media is an instantaneous addition to emotional loyalty because customers see a different side of the company… one that cares about you.  So, if part of your company’s strategy is to create emotional loyalty and lifetime customers, giving customers a great experience through Facebook or Twitter is one step closer to that goal.

Community breeds loyalty.  (Think Dell’s Idea Storm)  Customers who participate socially remain customers longer and repeat customers longer and repeat purchases more often.  And, most important, you’re able to recognize when customers say something about you… you’re actually able to respond.

Advocacy (like ratings) strengthens loyalty and brand perception.  Whether customers post positive or negative comments, the ones who participate are the brand’s core customers.  The end-game isn’t just messages on a wall.  Use these tools to drive traffic and build repeat business.  The average Facebook user has 180 friends, which translates into a lot of impressions.

In the recent report “Social Brand Strategy,” Forrester Research principal analyst Lisa Bradner outlines how to best integrate a social media strategy into a multichannel marketing initiative.  Here’s three steps for success:

1. Do not require opt-in: Registration is essential to understanding customers and their social behavior, but it should be optional for most social media access.  Encourage registration (via your newsletter or by offering discounts), but the site should be freely available to anyone.
2. Understand the number of advocates: Measure how many people are already engaged with your brand online, like how many people opt in via a social site to receive a newsletter or who comment frequently in a forum.  Knowing these numbers are especially important in the planning stages to gauge interest and determine how extensive a social media initiative should be.
3. Integrate loyalty programs: The same people who join loyalty programs are likely to participate on social media sites.  Companies can encourage participation using such means as creating a private customer community for loyalty program members or giving members additional points or rewards based on their level of activity in the community.