Loyalty Marketing Powered by Social Media

In the world of online retailers where commodities rule, Loyalty Marketing is the difference between being a good or a great retailer. Loyalty marketing originated in Germany when price competition in certain markets were disallowed by government, retailers created the loyalty system with discounts, perks, gifts, and other rewards to retain their customers. Today loyalty marketing has taken on a new meaning as the top 2% to 5% of loyal customers contribute the lion’s share of revenues and profits.

Within the social media arena, competitive marketing rules have not changed, the contest for more clicks; more traffic is ever fraught with competitors fighting for the digital landscape of your computer screen.  We have the seen the paradigm, little known companies spring forth attacking and winning market niches by offering superior web  technology, really clever socialized media marketing, and of course traditional basics of loyalty rewards, and good customer service that have changed the space for ever.  Companies like Zappos, the poster child of social media marketing, and one of latest winners who have used a combination of loyalty marketing programs and the power of social media to carve out a healthy market share.  “Socialized Loyalty Marketing” is the new way.  More traditional companies like Sears, with my community, Coca Cola with mycokerewards.com, Disney, Outback, and others have taken the approach with a combination of points, credits, free shipping and sweepstakes to win the hearts and minds of top customers with ever creative loyalty programs.

More and more, the power social media has in influencing friends, family, colleagues and even strangers has made it a natural for the multi-level marketing companies whose traditional approach has been to have your friends tell a few of their friends, and so on and so on to communicate, sell and deliver the goods.  In my brief brush with these companies like Amway, Herballife,  and a few others from friends trying to recruit me, it was and still is my opinion that it was a lot work coordinating parties and persuading people to get the points and sell the wares. While a few climbed the pyramid, many did not – either for a lack of organization, real interest, poor communications, physical presence in front of a group, record and ordering system and perhaps other lesser reasons – well all that has changed with the congruence of the MLM – WEB – Loyalty Marketing as now instead of having people throw network parties, it can be done through total anonymity by creating a Facebook like  page, attracting friends and sharing your message where referrals and their referrals are instantaneously recorded, rewarded and persuaded to replicate the model with little to no actual personal contact.  It becomes the perfect way to sell for those who for whatever reasons, were not successful in MLM as all you really need to do is build your network online with pictures, contents, attractive offers and loyalty programs and compete with the best of them out there. It is an exciting new world for retailers.