"Repeat business or behavior can be bribed. Loyalty has to be earned."
- Janet Robinson, CEO, The New York Times Company
I was recently in the market for a new car. My lease was up and I wanted to try something new. I did what I always do when I prepare to make a higher ticket/considered purchase - I made a list of the things that were important to me, and then prioritized them:
I even made a list of things I didn't want:
There were also a million other things I needed to consider from brand to styling to color to technology to financing to efficiency and on and on.
As a digital marketing professional with a current focus on social and mobile, I really wanted to see what role they would play in my purchase.
In a nutshell:
I ended up buying a used Audi A3 and I love it. As soon as I bought it, I quickly followed Audi and even a few Audi fanatics on Facebook and Twitter. I've gone back and watched more videos and I'm even now following my local dealership. Social was not very important when I was buying, but is great for staying connected to the brand and my newfound Audi community now that I've made my decision. Prior to social media, I don't know that I would have ever connected to an Audi community or become an Audi loyalist.
Many years ago I worked for one of the biggest beer brands in the U.S.; I helped lead their digital marketing strategy. Very early I learned that roughly 70 percent of all their revenue came from "loyalists" - people who drank at least 10 servings per week. Therefore, the vast majority, at least strategically, of their marketing efforts were focused on "growing share" among loyalists. It was easier and more valuable to get existing customers to drink slightly more than it was to convert someone from a competitive brand.
"Experience has shown us that disloyalty at current rates stunts corporate performance by 25 to 50 percent, sometimes more."
- Frederick Reichheld in "The Loyalty Effect"
Loyalty marketing isn't new. We all have a credit card in our wallet that gives us rewards. And direct marketers have been practicing "relationship marketing" forever.
But why have brand marketers been so loath to focus at least some of their efforts on existing customers?
I get it; we're all trained to focus on reaching as many people as possible with our message. It's all about reach and frequency and when we scale those, outcomes scale too. Yes, keep doing this; every banner, TV spot, and print ad is both driving awareness among loyalists and reaching new potential customers, perfect.
But what if we shifted some of our effort and creativity into "growing share among loyalists" and away from solely scaling our messaging?
What does great brand loyalist marketing look like? Are you already doing this?
Here are a few things I've begun to consider:
Admittedly, I'm just poking at the surface of a few big ideas. There are many great marketers dedicated to customer marketing and to driving real and sustained business growth by focusing on loyalists. At the same time, many marketers, consumed by the priorities of the reach and frequency mandate, never get a chance to dive in here. Additionally, rarely are marketers measured on increasing share among loyalists or improving customer lifetime value. Why is this?
Social media marketing has made aggregating and reaching loyalists easier. And our focus on getting fans to like, comment, share, and retweet our posts is a step in the right direction, but these tactics alone won't drive significant business value. We must begin to apply brand marketing budget, creativity, and the emerging social advertising toolset to the challenge of creating loyalists and increasing customer lifetime value. In social, our customers are begging for it.
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Marko Muellner has been a digital marketer for over 18 years, with deep experience in cross-channel, integrated, and multi-touch marketing strategy, creative development, and account management. He has spent his time learning how digital and social media marketing is applied in non-profits, international digital agencies, .com start-ups, global sportswear and beer companies, and at a top-tier web analytics and optimization company. This experience has brought him to the stage as a featured speaker at the Luxury Interactive Conference. His social media and digital marketing expertise have been featured in Luxury Daily, the SmartBlog on Social Media, Mobile Marketer, InsideSocialCommerce, and Facebook Advanced. He can be reached at @markozm.
March 19, 2014