ENLIGHTENING INSIGHTS: Sierra Trading PostT.G.I. FridaysMoneyGramXeroxBest BuyRug DoctorEnterpriseProgressivePure Romance

ENLIGHTENING INSIGHTS: Sierra Trading PostT.G.I. FridaysMoneyGramXeroxBest BuyRug DoctorEnterpriseProgressivePure Romance

EXPERIENTIAL PROGRAMS: REWARDING CUSTOMER LOYALTY ONE UNFORGETTABLE EXPERIENCE AT A TIME

4 STEPS TO GROW & CULTIVATE YOUR LOYALTY PROGRAM

THE MANY ROLES SOCIAL MEDIA PLAYS IN LOYALTY

ENLIGHTENING INSIGHTS: Sierra Trading PostT.G.I. Friday'sMoneyGramBest BuyRug DoctorXerox

Pure RomanceEnterprise Rent-A-CarProgressive Insurance

Volume 4 Number 2

Second Quarter 2012

“Social media” is the loyalty buzz phrase of the day. There is an endless stream of commentary and recommendations on how

to best leverage social media in marketing. In fact, you can’t throw a stone without hitting a social media expert.

With ALL the information available on the topic, how do you sort out what recommendations are best for you, your organization and the customers and industry you serve? The biggest mistake we see made in social media is activity driven by marketing calendars—not business objectives. Too many marketing departments and firms are using Twitter, Facebook and YouTube to push out promotional company messages, measuring success with likes and re-tweets. Other companies discount social media channels as venting and griping outlets only, preferring not to engage negative commentary.

TYING SOCIAL MEDIA TO BUSINESS OBJECTIVESWe are not discounting social media as a valuable marketing and communications channel. We are, however, pointing out that Twitter, Facebook and YouTube are also business channels that should be closely aligned with and support three key business objectives:

•  Enhancing customer and product acquisition •  Converting online engagement into commerce •  Improving customer retention rates

As is true with any business objective, measurement and analysis is also key. It is not enough to consider 5,000 followers or 1,000 likes the successful outcome of a social media campaign. Instead, companies should be looking at the actual content of Tweets, Facebook status updates and YouTube comments. What do the words mean? How can a company use social media data in a meaningful and valuable way that improves business practices and, therefore, increases productivity and loyalty?

This article will examine how three companies going through a service break, special community event and the launch of a new campaign used social media monitoring as well as activity to overcome hurdles, meet business objectives and improve customer loyalty.

BANK OF AMERICA, MINT.COM MISS SIGNS OF DISSATISFACTIONAs the largest bank in the United States by assets (and more than 12 percent of U.S. deposits), Bank of America has maximized its share of deposits through acquisitions and may soon need to increase its rate of organic growth. To us, this signals a strong need to concen-trate on the customer experience.

THE MANY ROLES SOCIAL MEDIA PLAYS IN LOYALTY

S T E V E N J . R A M I R E Z

— B e y o n d t h e Ar c

Analysis of Twitter & Facebook Data March 2-14, 2011

Total Comments: 41,000+Unique Comments: 9,000+

Facebook 12%

Twitter 88%

SOCIAL MEDIA ANALYSIS ABOUT BANK OF AMERICA REVEALED THOUSANDS OF COMMENTS ABOUT SERVICE BREAKS & PURCHASE LIMIT RUMORS THAT PUT THE BANK AT RISK OF LOSING CUSTOMERS.

FEATURES

20   Loyalty Management™ • SECOND QUARTER 2012

Unfortunately, an account linkage problem that occurred last year between Mint.com and Bank of America caused many customers extreme dissatisfaction, which they expressed through Twitter and Facebook. Some threatened to leave the bank. Others claimed Bank of America had told them the bank had severed ties with Mint.com, a mistaken rumor that was often repeated.

While the issue was fixed a week later, the dispelling of rumors and inaccuracies came from Mint.com with Bank of America never responding to the surge of customer concern. Interestingly, complaints about Mint.com access through Bank of America spurred a spike in negative comments overall for the bank with customers commiserating on late tax forms, payments not posted on time, failures to send new debit cards and duplicate accounts.

The monitoring and analysis of social media data would have helped Bank of America quickly identify customer concerns and track public sentiment about the business. By categorizing large volumes of comments to determine key themes and trends, text analytics could have translated social media data into actionable insights. Compa-nies that use customer feedback to drive service improvements retain customers and deliver a better customer experience.

JP MORGAN CHASE INCREASES THE VALUE OF SPONSORSHIPFor the past 35 years, JP Morgan Chase has hosted the Corporate Challenge, a series of 3.5 mile footraces in cities across the globe that raise money for local non-profit organizations. By September 2011, more than 226,000 people had participated in the year’s events, which were being held in 12 cities and 6 countries. Sponsorships can be an effective strategy for increasing customer loyalty and enhancing brand recognition in a community, but how can social media play a part in a successful strategy?

Start the conversation early. The Corporate Challenge in Johannesburg was held on March 3, but JP Morgan Chase didn’t post their first comment on Facebook until April 4. At that point, the only comments were from the bank. After April 4, when all the global Facebook fan pages got rolling, the bank enhanced its communications strategy to maximize response. In the new and growing market of Johannesburg, however, the bank missed a key opportunity to build buzz.

Drive engagement. Across the Corporate Challenge fan pages for most cities, the number of comments increased dramatically on race day, representing an average of 22 percent of all comments. In Chicago, almost 35 percent of comments were on race day; in Buffalo 28 percent. A large portion of comments on race days reflects a high level of excitement, representing an opportunity for JP Morgan Chase to engage those active participants over a longer period to strengthen relationships, so the event and sponsor aren’t quickly forgotten.

Specifically on Chicago’s race day, JP Morgan Chase posted: “Chicago, on your mark, get set and go....it's race day! Who are you running with today?” In addition to generating engagement, this question also targeted two of the strongest features of the Corporate Challenge—team building and company pride.

In Buffalo, JP Morgan Chase used social media to quickly respond to participant concerns. When runners worried the race might be canceled due to a thunderstorm, the bank was quick to post on the fan page that the event was still on.

Maximize afterglow. One of the most important goals of a sponsorship event is to maximize “afterglow”—the feeling of identification with the event after it has passed. In this case, JP Morgan Chase adopted an excellent strategy to keep people buzzing about the race. Teams were encouraged to participate in a t-shirt contest by designing a shirt with the Challenge’s logo to be worn on race day by the entire team. After the race, participants could go to the bank’s website to vote on their favorite shirt. The two winning teams each won $1,000 for their charities of choice.

Not only did the t-shirt contest drive people to the JP Morgan Chase website, but it also dominated the conversation on the fan pages after the race day. In fact, except for the race itself, the most popular topic on each page was t-shirts. Participants urged others to vote for their shirts or applauded the other teams’ creative designs. This type of engagement, begun by the bank and taken up by participants, is the ideal goal of any social media campaign as it generates a strong sense of community and association with the brand.

Data analytics help at every step. Worth noting is that data analytics uncovered comments about confusion on how to vote in the contest, which indicates that JP Morgan Chase needs to improve its voting process in the future.

American Express Maximizes Facebook Fan Engagement Build it and they will come is NOT true for Facebook fan pages. In fact, fan pages are all about active engagement. The tactical goal is to quickly move through a 3-stage process: building your fan base, getting them to read your posts, and motivating them to actively participate in the conversation.BUFFALO, CHICAGO, LONDON AND NEW YORK ALL HAD

THE MOST INTERACTIVE FAN PAGES, WITH ABOUT 80% OF CONTENT COMING FROM PARTICIPANTS.

continued on next page »

Loyalty Management™ • SECOND QUARTER 2012   21

Over a month, 5,288 comments were posted to American Express’ Facebook Wall. The post that received the highest number of comments per day and likes per day invited customers to share their weekend plans. It is easy for people to fill in the blank, and describ-ing their weekend is fun to do. As long as the topic is of interest, fill-in-the-blank, true/false and multiple choice questions or statements could all be effective ways to drive engagement on Facebook fan pages.

Two other highly engaging posts on the Amex Facebook Wall were:

These posts succeeded due to the topics –summer vacation and favorite memories– which were cleverly tied to the product, the American Express card.

A different type of fan page post proved engaging too, “Join people from around the world & let’s show Japan our continued support—we’ll donate $1 to earthquake relief efforts for every ‘Message of Hope’ posted!” This type of post appeals to people’s aspirations and the “self” they want to portray online. Disaster relief, community activities, other fund raisers, and travel can be engaging for similar reasons.

REWARDS PROGRAMS HINGE ON SOCIAL MEDIAIn the area of unique rewards programs that differentiate a brand, attract and retain customers, American Express is a best practice yet again with social media emerging as a key vehicle to engage

customers. Described as “Groupon without the Coupon”, American Express’ Link, Like, Love lets cardholders link their American Express card to a Facebook account. Then American Express delivers deals and offers based on Facebook activity, pages likes and shares as well as the activities of Facebook friends.

As we examined the data on Link, Like, Love, we gained insights on the customer experience from acquisition to retention as well as brand advocacy. From these insights, we assembled a picture of the customer experience at each major stage of the program—aware-ness, registration, initial usage, repeat usage and advocacy.

SOCIAL MEDIA IS MORE THAN…Social media is more than a way your customers pass time during the day. It is more than a marketing channel for promotions. It is more than a venting playground for gripers to gripe and moaners to moan. Social media is—and should always be viewed as—a business channel.

Monitoring, actively participating in and analyzing data on Twitter, Facebook and YouTube can enable your company to better engage its customers and industry, turn interaction into commerce and acquire new customers.

The Many Roles Social Media Plays In Loyalty (continued)

Steven J. Ramirez is CEO of Beyond the Arc, Inc., a management consulting firm that combines strategy consulting with advanced analytics to help clients identify opportunities to differentiate themselves in the marketplace. The company’s social media data mining helps clients improve their customer experience across products, channels, and touch points.

“Goodbye summer, hello fall—Where will your Amex Cardbe spotted this season?”

“Paris, France…for the holidays”“Home Depot”

COMMENTS PER DAY:  26.1LIKES PER DAY:  46

“What summer memories did your Amex Card make possible?”

“Celebrating our 50th anniversary”“Margarita Beach …Caribbean!!”

COMMENTS PER DAY:  28.4LIKES PER DAY:  24.1

L E S S O N S F R O M A M E R I C A N E X P R E S S ’ L I N K , L I K E , L O V E I N C L U D E :

1:  Design your social media presence with the customer in mind.  Create a seamless user experience that drives conversion.

2:  Design your program to exploit features unique to social media, such as social  networks, viral advocacy, and scalability.

3:  Tailor your approach for the target customer.  Customized methods can  yield greater engagement and use of goods  and services.

L

22   Loyalty Management™ • SECOND QUARTER 2012