How to Earn a Customer's Loyalty

Sunday night, I was flying up to Boston from Austin on US Airways. Not my favorite airline by a longshot but they are reasonably priced and my last few experiences with them have been decent. Anyway, they had wifi on my leg from Charlotte, NC (one of their major hubs) up to Boston. Because it was only an hour and a half, I decided not to pay for the wifi. However, GoGoInflight is running a special right now where they are giving away free Twitter access during April.

As we got closer to Boston I started wondering how close to on time my midnight arrival would be. Given the fact that my Twitter friends are usually up all hours of the night and always very helpful, I thought I'd ask if they might be able to look up my flight status. Of course, I was right and I immediately got several helpful responses. But it was one person in particular -- an employee at a competing airline -- who was kind enough to look for me that really impressed me.

So why was I so enamored with this occurrence? Because with nothing to gain, this person went above and beyond to give me information I needed, when I needed it. If more companies took this approach, there is no doubt in my mind that businesses would win over a lot of new customers. At the end of the day, being helpful is always appreciated, especially when there is no apparent ulterior motive.

Have you ever had this happen to you? If so, share your story in the comments.

Onboarding and Engaging with Location Based Services

Next Wednesday, I'm speaking at a very cool event in Chicago called the Bricks + Mobile Conference. If you're in the area, you should absolutely plan to attend (I may even be able to finagle you a discount). I mention this because I'm on a panel with some very smart people including:

• Tim Hayden, CMO 44Doors (moderator)
• Adam Beaugh, Director of Social Media, Jackson Family Wines
• David Javitch, VP of Marketing, Scanlife
• Jessica Rotnicki-Magaro, Vice President Ecommerce North America, Estee Lauder Companies

The reason I got asked to be on the panel (I think) is that I am now the head of location based marketing at global agency, WCG and am also co-authoring a book called Location Based Marketing for Dummies. In the book, my co-author, Mike Schneider, and I are focusing on how businesses -- large and small -- are tapping into the power of location based marketing. This starts with goals and offers and ends with platforms, measurement and analytics.

One of the main things that Mike and I are focusing on in the book is how businesses can derive real business value by engaging with their customers using location based services. To that end, loyalty is a major outcome that many of the companies like McDonalds, Neiman Marcus and USA Today are seeking as they engage using platforms like foursquare, SCVNGR and Whrrl.

But before companies get to loyalty through regular (hopefully fun and/or educational) interactions with their customers, is there role that location based services can play when it comes to on-boarding and engaging their customers? Of course there is.

For starters, any company that is engaging in location based marketing should consider offers that are not only universal (mayor offers are somewhat overrated), but also that encourage initial and then repeat behavior. There is a local coffeeshop/theater here in Austin, TX called the Hideout that does a nice job on this front. Their offer gives you a 2 for 1 ticket to the theater on your 1st, 5th and 10th checkins (and free admission for the mayor). This provides immediate value the first time you checkin but also keeps you checking in (and ideally coming back) to continue to get your discount.

Where the Hideout (and many other companies fall down) is not letting their customers who aren't using location base services that there is an offer. Why not have a poster up on the wall, a sign on the front door and a trained barista that asks you if you've checked in? Creating a compelling offer and then letting your customers know about it is key.

Another thought when it comes to on-boarding is what if you could check into your new television? Or laptop? Or box of Cheerios? And what if when you checked in you got special instructions (plus a reward)? Well, there are services that are starting to provide this type of functionality like GetGlue. And as of two days ago, GetGlue just announced a partnership with Lionsgate offering 40% off the Blueray DVD set of AMC's popular tv show, Madmen. While this partnership doesn't do much by way of "on-boarding," they are creating fun, excitement and engagement with Madmen fans.

Is your company using location based marketing to on-board, engage and create loyalty with your customers? If so, post about it in the comments section below.

Webinar: Retain Brand Loyalty with Location-Based Services

So I'll be doing a webinar with social media smarty, Cody Barbierri of Piehead, next Wednesday (11/17) titled Retain Brand Loyalty with Location-Based Services. The webinar is free and it will take place from 2:00 - 3:00 PM ET.

Here's the official writeup of the event:

Facebook has expanded the value of location-based check-ins for its 200 million plus mobile users. Twitter has broadened the horizons of its geolocation platform to provide more value for businesses and users. Foursquare has exploded to more than 4 million users and continues to offer businesses ways to build brand loyalty. Location-based services are certainly here to stay.

Utilizing mobile and location-based concepts to engage an audience on new levels can do wonders for a brand that’s looking to increase customer loyalty. The marketing potential around these services, like Foursquare and Facebook Places, represents an opportunity for brands to engage and retain their key audiences.

Location-based services represent a new access point for brand engagement and marketing opportunities. While every brand’s marketing goals and objectives are different, some of the potential uses may include special offers and discounts sent via mobile, games and mobile apps.

Join two industry leaders for this thought provoking web seminar and discover how targeted location-based service campaigns can drive increased consumer engagement and long-term brand loyalty. By attending the event, you will not only learn about the major players in the space, but also gain greater insight into how to:

• Track customers using various location-based services
  
• Engage with users to ensure increased brand loyalty
  
• Retain and develop relationships while giving potential customers reasons to convert
  
• Analyze marketing efforts and customer response through continuous analysis
  
• Cody and I will also be available to answer your questions during a live Q+A session.
  

Hope you can join us! Register here.

Influencing the Influencers: Webcast w/ Atkins & Author, Jill Griffin

You all know that I love to do webinars. Well, there's a very cool one coming up next month on Thursday, November 12 (2 PM CT) with one of my friends (and sometimes podcast companion), Jill Griffin. Jill is a local Austinite and a three time author. Her main focus is customer loyalty. We'll also be joined by client and social savant, Allen Silkin of Atkins Nutritionals.

You can get all the details on the sign up page but essentially, these are the five areas we'll be covering:

• Four ways to tell if a customer in your advocate
• How to climb Advocacy Hierarchy
• Why complainers must be managed and how to do it
• 9 ways to minimize detractors and maximize advocates
• How to get online communities spreading your good name

Hope to see you there!.

The Loyalty Effect

If the title of this post sounds familiar, that's because it's the title of a well-known book by Bain & Company fellow, Fred Reichheld. While I'm not planning on talking about Fred or his book, I do want to dig into the concept of customer loyalty -- a topic that is more important to marketers now more than ever for two simple reasons:

1. The current economy sucks.
2. We now live in a "search and click" economy

I know I don't need to say anything more about the first item other than the fact that many companies I've talked to are taking a 15-25% haircut on their marketing budgets in 2009. That means that all of a sudden, companies can't afford to acquire as many customers as they could even six months ago. With fewer new customers comes lower revenues and more importantly, fewer new customers to replace those older customers that have moved on due to natural attrition.

Compounding the "economy" issue is the fact that with the mainstream adoption of Google and price comparison sites such as Shopzilla or Froogle, it's now easier than ever to find the absolute lowest price for anything online. This "search and click" mentality has created a level of price transparency that has never before existed and thus has pushed price sensitivity to an all time high. Not only can you NOT afford to acquire enough new customers, you're going to continue to lose your existing customers at an exponential rate moving forward.

Yes, that news is depressing but in the immortal words of singer, Prince, "I'm here to tell you... there's something else." No, not the afterworld but a solution of sorts called "social marketing"otherwise known as the convergence of engaging content, social tools and expert community oversight.

Before I tell you more about social marketing, let's go back to the title of this post and dig into something as a marketer, you probably understand. That's right, I'm talking about customer loyalty. Your company may pay lip service to the idea of customer loyalty. Who knows, you may even have a customer loyalty program (good on you if you do) but realistically, there's a good chance that you're not doing enough proactively to make your customers feel like they want to be loyal.

To be honest, author, Fred Reichheld, does an infinitely better job than I ever could of providing the formulas and case studies behind why loyalty matters. But for the sake of this post, this quote by fellow "loyalty" zealot, Jill Griffin, from one of her many articles on this topic sums up the power of customer loyalty succintly:

Keeping customers who are highly valued can greatly improve profit, Fred Reichheld says in his ground-breaking book, "The Loyalty Effect." Presenting extensive data across a wide array of industries, Reichheld shows why as little as a 5 percent increase in retention can improve a company's bottom-line profitability between 25 percent and 85 percent, depending on the industry.

Wow! Who wouldn't want to increase their bottom line by 25-85%? All it takes is as little as a 5% increase in retention. The problem is, retaining customers these days just isn't that easy. I made that point earlier when I mentioned the "search and click" phenomena (which in the spirit of full disclosure is the part of the title of Jill's latest book).

Enter the concept of "social marketing." And rather than try and "philosophize" to you on why creating engaging content and wrapping it with social tools can help you dramatically improve your customer loyalty (and thus your retention), I'm going to share some real numbers from a recent MarketingProfs case study based on their interview with director of web services at Sony Electronics, Mildred Center (disclosure: Sony is a client of my employer, Powered). Some of the results are quite eye opening:

Increasing consumer loyalty and advocacy: The [social marketing] program has a 90% user satisfaction rating, and 78% of users report that they are more likely to purchase a Sony product as a result of Backstage 101. Sony's NPS (Net Promoter Score) for 2008 came in at 44%, with 59% of users classified as "promoters" who are likely to recommend Sony electronics to a family member, friend, or coworker. [This score stacks up against most companies whose NPS efficiency is in the 5-10% range.]



Providing increased value to the Sony Electronics business: The number of users claiming to have purchased a Sony Electronics product grew to 36% for the first half of 2008 (prior to the launch of Digital Darkroom andFrontline Community), compared with 20% for the first half of 2007, and Center reports that sales on the Sony Web site "continue to increase month over month." In addition, survey completion is up 12% this year, providing Sony with valuable additional consumer insight. And retail syndication along with the addition of Backstage 101 to the company's CyberScholar site are allowing Sony to better support its retail relationships.

This isn't rocket science but it does run counterintuitive to the way most companies do business. While your company may provide "content," it's likely to be focused on your company's products and services. [See recent post on Hubspot for another company doing a great job providing value-add content] That's not to say that your site shouldn't include that type of information, but that's not always what customers care about.

In Sony's case, they have tutorials on how to take better digital photos, irrespective of whether you use a Sony or a Canon camera. In addition to these tutorial (which you can rank, review and tag) Sony's online communities allow members to upload their own photos for others to rate, discussion boards and other social features that allow photo enthusiasts to communicate with one another.

So what are you waiting for? As I mentioned in an earlier post, there is no better time than now to be thinking about engaging your customers with a goal of creating deeper loyalty and greater retention. It's a new way of thinking but one that provides demonstrative results.

Is your company focused on customer loyalty and retention? If not, what's stopping you?

Cross-posted on http://theengagedconsumer.powered.com