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How Social Media is destroying brand loyalty

cheating

Last week, I wrote about my trysts with Scotty’s diner. I had been there a couple of times, and rather enjoyed the food and the conversations with the staff. On my walk to Scotty’s I noticed another place called Bloom’s Cafe. Wondering, what it was like, I went on-line to read about it. And there were some pretty good reviews of the place. So the next morning, I went to Bloom’s.

There was nothing wrong with my experience at Scotty’s. I was quite happy there, but the temptation to try out an option was too hard to resist, buffeted as it was with great reviews. Quite frankly, there was nothing Scotty’s could have done differently to prevent me from trying out Bloom’s.

And that is the risk that brands are facing with the advent of social media.

Used to be that there was a category of goods called ‘impulse purchase’ that were always susceptible to consumer moods. Typically candy/snacks and the type, where the risk was low and the financial downside was minimal.

Higher involvement categories were pretty much inured against this. These were considered purchases and the sales outlet, the salesman and word of mouth  of friends mattered a lot.

Till the mid 1990s ones awareness was limited to what we read in the media and heard from friends. With the advent of the internet the choices before us exploded. Brands we had dreamt of, or never heard of were all available at the click of a button. But how do you decide on what you were willing to spend your hard earned money.

Enter the concept of reviews. First on amazon, now showing everywhere. From a pair of socks to apartments there is no shortage of opinions being expressed that is changing consumer decisions everyday.

Emirates or Etihad

Hyatt or a Westin

Mobilio or Ertiga

Sobha or Prestige

And so on..

What we are seeing is that with social media, words of strangers carry as much weight as that of friends.

Much as people are willing to try out new options, bad service from their own brands is instantly shared on-line as well.

It appears that the days of lifelong loyalty are long gone.

So what are brands to do?

I believe it is a combination of 3 elements.

Customer Satisfaction: Ensure that existing customers are happy and their issues/concerns are instantly resolved. Don’t give them an opportunity to complain publicly. If they do, ensure the problem is addressed publicly as well.

Consumer Advocacy: As reviews play an important part in prospect decision making, there is need to run a continual consumer advocacy program. Some companies incentivise consumers to post advisors on trip advisor, for example. Similar programs exist, or should be created, by other brands as well.

Consumer Acquisition: Acquisition has to be a continuous program as there will always be people who drop out, seduced by a good review somewhere else. Hence it is important that brands are always on the hunt for new prospects, who may well be loyalists of another brand.

In my opinion consumer decisions will be shaped by

Advertising + Media (editorial) + Social Media.

Brands will need to play in all these spaces and have distinct, integrated, strategies that work across all.

 

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  1. Ms Mandir Tendolkar....your fan from O&M days...i used to be in Media
    May 17, 2016 at 2:44 pm

    Good read Harish….
    also feel that individuals today are outsourcing (free) brand decision making on products that they do not want to spend time on….but for some products that are too much in the my space they will decide…so a shift in consumer buying behaviour

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