Category: Customer Relationship Management

Segment Your Brand Community Participants Part 2

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Last week, I wrote about four categories of brand community participants: the devotees, the tourists, the minglers, and the insiders. In Part 2 of this series, let me discuss how you can identify these different types of participants through their observable behavior in your community.

 


Image by Lieutenant Pol | CC 2.0

The Devotees:
The devotees are probably the most difficult to identify among the four categories, because these individuals are most likely lurkers that mostly keep it to themselves. But by combining community log data, it is still possible to recognizing such users. Signs of a devotees include:

  • Moderate to frequent visit to the community.
  • Rarely contributes to the conversation. If we were to calculate a ratio of posting to reading activities from the user’s activity log, the ratio should be quite low.
  • For reading activities, the user reads mostly information/exchanges directly related to the brand. The average time spent on these brand-related messages is also disproportionately higher than non-brand-related messages.
  • If a following or friending system exists in the community, a devotee is likely to have a small number of friends, and is likely to only follow well-respected members who know a lot about the brand.

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Guest Post: 10 Steps for Setting up a Loyalty Program

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A few weeks ago, I wrote about the design fundamentals of a loyalty program, which had been inspired by discussion with one of my readers Kim Skaaning Jørgensen. After I published the post, Kim offered me a rather lengthy and thoughtful feedback on the topic. So I invited him to write a a little more about it. Today, I am happy to introduce to you Kim’s guest post discussing his 10-step strategy to setting up a loyalty program.

10 Steps for Setting up a Loyalty Program

By Kim Skaaning Jørgensen

Step 1: Evaluate the Product

The first step is always to answer the following questions honestly:
• Is my product good enough?
• Is my product worth the investment?

If the product does not sell because of a significant quality, distribution, design or price problem, then the customer loyalty program will not be able to salvage it. In that case, you can apply the framework from W. Chan Kim and Rennee Mauborgne’s book Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant to first improve your products and your company.

 
Step 2: Identify the Value Proposition

This part is one of the absolutely most important steps before implementing a Customer Loyalty Program. What to offer customers? What is the value proposition? If the value is not well received by customers, the program will not work at all. Therefore use extra time to develop your value proposition. Here are some general guidelines:
1. The value, reward, benefits have to be of “high value” in order to make the membership attractive. The benefits must meet the expectations of the target groups.
2. It is not enough to think that a benefit offered are of high value. The benefit must also have a high “perceived value”. If customers perceive it differently because it is not the benefit they desire, the program will not work.
3. Selection of benefits. Benefits can be “Hard” or “Soft” (See figure below).
4. Timing of benefits or rewards (i.e., instant or delayed reward) needs to be considered.

The right mixture of loyalty program benefits

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Are Your Customers Really Loyal?

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If Jane comes to your store every Saturday and spends $50, would you consider Jane a loyal customer? Driven by concerns about the bottom line, businesses often define loyalty based on how much consumers spend and how often they buy. But digging a little deeper into the psychological reasons behind “loyalty” can reveal important insight and help identify effective target marketing strategies.

In Jane’s situation, there are two possible reasons behind her “loyal” patronage: (1) she genuinely likes your products and services, and therefore, when need arises, she always comes to your store to make a purchase; (2) she comes to your store out of habit, whenever she’s on her way to visit her grandma on Saturdays. In other words, both habit and true loyalty can drive Jane’s seemingly loyal behavior, and your optimal marketing strategy should be different based on the exact reason involved. Let’s dissect this a little further, shall we?

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