Connecting with Customers through the Power of Social Media and Mobile : Tomorrows Technology Today

Connecting with Customers through the Power of Social Media and Mobile

by Kathryn Free on 11/12/12

Google, IBM, Apple, Facebook and Microsoft all have the same goal — to connect with consumers. Thanks to the democratization of information technology, the global retail landscape has drastically changed in the last decade.

Welcome to the Knowledge Era — it’s the Klondike again, but this time we’re not gold mining; we’re data mining. Therefore, to remain competitive, retailers must start to connect with their customers and collect relevant information about them.

One of the most effective ways to do that is to launch a loyalty program. A good program will allow you to capture relevant data and eventually make offers that truly cater to customers’ needs. Contrary to an ad campaign, where the main objective is to attract new customers, a loyalty program is designed to retain and engage customers. In this time of economic slow-down, customer retention is becoming even more important for retailers.

Loyalty programs aren’t new — they’ve been around for the past couple of decades — but with technology trends such as social media and mobility, the game is changing … once again.

While some retailers have established their own loyalty programs, they may not yet be taking advantage of social media and mobile devices. It can be a daunting task to build a customer database and design a loyalty program that effectively incorporates these new technologies. But there’s an easy solution.

First, if you don’t have a customer database, start with a gift card program and link it to a social media platform such as Facebook. There are millions of gift cards in circulation, but most don’t have any customer information attached to them. Today’s newest technology is the missing link.

When a customer redeems a gift card on Facebook, they simply type in the gift card number and hit a button. But with a two-way integration, the customer also associates their Facebook profile with the retailer. The retailer can then directly communicate with the customer, providing personalized offers, such as: “You have $15 left on your gift card balance. If you come into the store next week, you can save another $5.”

Once integrated with Facebook, a retailer has a potential customer base of 900 million — harnessing the power of social media to communicate in real time with new and existing customers. Add to this relationship a reward aspect, and you can then migrate toward a highly effective loyalty program.

The retailer can also use the Facebook or Foursquare on smartphones so when a customer “checks in” to a retail location that information is received in real time and the retailer can push out a promotion, such as: “Make a purchase in the next 30 minutes and we’ll double your points.”

The next step for retailers is to launch a ‘’official’’ loyalty program with a plastic card or a mobile app. Indeed, to be able to track in-store transactions, retailers must offer their members an ID card – no matter if it’s a plastic or a virtual card available via a mobile app. I personally prefer the mobile option because it allows a customer to earn and redeem points in store and allows retailers to send promotions directly to a customer’s phone. Over the next two years, we’ll see mobility become an increasingly important part of loyalty programs, replacing plastic cards. But for now, customers are still attached to the tangibility of the plastic card.

Once your loyalty program is running, you can finally start collecting/analyzing data about customers and start interacting with customers. Rule of thumb, every customer action or transaction is an opportunity for the retailer to communicate with that customer. But there is a caveat: When customers provide detailed information about themselves, they expect customized promotions and offers. If you’re a vegetarian, why would you want to receive deals on ribs and hamburgers? This tends to have the opposite effect of what was intended and can alienate customers.

Fortunately, with the help of a technology platform, retailers can manage the complexity of data capture, and push personalized promotions to customers in real time according to demographic profiles, shopping algorithms and consumer preferences.

Traditional loyalty programs use a “batch” model where it can take weeks for a customer to receive their points. A good program needs to be real-time, product-centric and multi-channel, able to reach the client on the right device. Real-time integration means the customer receives points within 150 milliseconds and can use those points for purchases. And it means retailers can analyze a customer’s shopping basket and immediately apply a promotion to a specific SKU.

Having a customer database behind your loyalty program means you can get detailed information and provide more accurate, personalized communications to customers on their device of choice. This is not direct marketing, nor is it an ad campaign — it’s a one-to-one communicational platform.

Whether you’re managing a single store or a large chain, retaining customers is more crucial than ever in the highly competitive retail environment. A technology platform that bridges the gap between a traditional loyalty program, social media and mobile can provide that competitive edge in a simple, yet effective, way — by helping you get to know your customers better.

A loyalty program that incorporates social media and mobile is a powerful way to create a connection between the retailer and customer, and to engage that customer in a long-term relationship. That relationship has a direct benefit: Retailers can potentially increase their invoices by 20 to 50 per cent. A loyalty program is never an expense like an ad campaign; retailers can expect to see a return on their investment within 12 to 18 months, and after that it’s pure profit.

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