How Social Media is destroying brand loyalty

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.

 

What kids search on-line

Symantec analysed 3.5 million searches that were submitted by users of their OnlineFamily Norton service between February and July this year.

The top 10 were

1. YouTube
2. Google
3. Facebook
4. Sex
5. MySpace
6. Porn
7. Yahoo
8. Michael Jackson
9. Fred (A popular fictional character whose YouTube channel has become a hit among kids.)
10. eBay

At first glance, no surprises there really. Till you look at the second most popular term searched. Google.

Not that it came in second but that likely people were using Google to search for Google.

Kids may not be as smart as we make them out to be.

Click here to see the entire list of Top 100 searches

Advertising enters a new era

This is a great article in the NY Times talking about how the Internet is changing the way advertising is done.

One specific portion that leapt out is where it says there was a time that all research was pre or post. Now with web based advertising you can do on going tracking, measuring and optimising.

It also talks about the growing role that data oriented people are playing and will grow in the business that has traditionally been about creative ideas.

I wonder how many big businesses really practise this though.

There is a lot of data out there. How it is being used is a billion dollar Q.

I think the SMBs who have small budgets are optimising more than the big budget holders.

This may be the case till the % of spend on-line becomes more than off-line and the costs of optimisation and its outcomes are materially significant to invest in it.

On-line Metrics

Recently the point about looking at old-world metrics to evaluate performance of new media was brought home very powerfully.

We had constructed a micro site for our client and the site was showing decent traffic. Everyone seemed happy.

Then thanks to Google analytics the term bounce rate popped up and that number was very unhealthy. Started off a flurry of calls and meetings on the subject and re evaluation of the micro site content and all sorts of plans were being put together.

Then in a moment of inspiration someone suggested that we look at the source of the traffic. And that spotted the problem.

As the media agency was being evaluated on the old fashioned model of maximising traffic they were buying key words that were totally irrelevant to the campaign and the micro sites itself.

Akin to  seeing an ad offering sushi, only to land at the restaurant and find they were serving fries!!

That’s what was happening.

Once we spotted the problem, our strategy changed from volume of traffic to value of traffic, and the attendant plans.

So my advice to those doing on line campaigns is

1.Don’t separate media from the message. What may work in off-line, won’t in the on-line as the problem will quickly be spotted. Do consolidated briefs that encompasses media and creative.

2. In the off-line world volume of traffic, measured by Reach, is a metric. In the on-line world it should be relevant reach. Followed by engagement.

There are more, but in keeping with the SIMPLE tone of this blog, I think the above two would make the most difference to your plans.

See what JC Penney’s been doing on-line to drive business up. Some very good ideas.