During last semester’s marketing strategy paper I read several articles regarding loyalty programs and strategies behind them. The parallels between loyalty marketing and social media marketing were profound.
Without getting heavily bogged down in to the history and differing execution styles, essentially loyalty programs are a form of vertical communication . The business uses this forum to communicate its value / brand proposition. The customer who is the recipient of this communicate, displays a behavioral decision making process to participate in program.
The correlation between the communication and brand positioning becomes a common thread between loyalty marketing and social media marketing, but it does not end there.
Surprisingly C.K. Pralhalad suggest the underlying motivation factor for customers who participate in loyalty programs is based on a desire to have a more intimate relationship. Now before you shake your head disapprovingly, think about the concept of shrinking the world down to scale. Nobody wants to deal with a nameless faceless organization. In fact the concept of customer engagement predates social media when dealing with loyalty programs.
Many of the current loyalty plans have however become nonsensical, with customers often engaging in polygamous loyalty relationships.
Social media marketing does offer one significant difference from its predecessor, loyalty marketing, and that is the two way communication forum. This means there is a two way stream of interaction and information flow, so not only is the customer forth coming with their needs, but also develop an emotional bond with the brand and its value proposition.
About the Author:Reza Derhamy is currently studying towards the Graduate Diploma of Sales Management at Unitec. While enjoying the course work involved in the undergraduate study he is also enjoying the application of knowledge to the real world situations as a marketing consultant at Mt.Albert Accountants.