Customer Loyalty through Social Networks

1. Facebook is the key not just to brand awareness, but also to customer loyalty.

2. Are you on the web?

Are you on the web?

• 70.2% of pop in developed countries
• 32.5% of the world

Are you on the web?

• North America: 78.6%
• Oceania: 67.6%
• Europe: 63.2%

Key Takeaway:

Authors differentiate between Web 2.0 and social media.

(Remember "“Social Media Users
of the World, Unite!" ??)

The authors also advocate for meeting customers where they are and being able to pivot.

(Think REALLY and TIGOMA)

3. Web 2.0 and social media:

Consumers these days collaborate and participate.
(Think back to "What is Your Personal Social Media Strategy?)

The authors of the case talk about "prosumers" -- users who produce content and consume products.

Also like in “What’s Your Social Media Strategy?”, the authors talk about the low barrier of entry for small businesses.

The minimal upfront costs to social media mean small businesses need to get in the game.

Social media is global and local at the same time!

Discussion Question:

The authors say that companies’ fears about damaging brand culture w/ social media come from ignorance and aren’t real. Do you agree?

Like in “Entifying Your Brand on Twitter,” the authors break down the value of a Facebook fan per brand.

Discussion Question:

What is the criteria for assigning the value of a brand’s fans?

Discussion Question:

What accounts for social media strategy fails?

Discussion Question:

What two factors do the authors say account for social media strategy failure?

6. Loyalty

Four Drivers of Customer Loyalty

• Customer satisfaction
• Trust
• Perceived value
• Commitment

Customer satisfaction is emotional.


(Think back to: How emotional connections made "BabyCenter" a success)

Loyalty is technologically facilitated by Web 2.0

7. Fan or customer:

How this survey worked:

• Authors administered a survey to Portugese respondents
• Via Zara's Facebook page, fashion blogs, and authors' personal contacts.

Qualifiers

• 401 valid responses gathered
• 299 were from non-fans
• 102 from fans

Qualifiers

• All respondents were social network users
• Portugal possesses the most social network users, and 98% of Portugese social network users are on Facebook.

Qualifiers

• ¾ of respondents never interacted with the FB page ¼ followed the page once a month
• ¼ "followed" the page once a month

Qualifiers

• None of the respondents ever purchased from Zara based on their Facebook!

8.1 Relations to Loyalty are Stronger on Facebook

Survey Structure

• Respondents were assessed on the 4 drivers of customer loyalty using a seven-point scale.
• 1 was "strongly disagree" and 7 was "strongly agree"

Untitled Slide

Discussion Question:

Do you agree with these methods and results? Do you think fans were more loyal because of their Facebook engagement?

8.2 Customer Satisfaction is the Most Important

Takeaways

• Facebook can support fans who already like the Zara brand, but limitations in the platform make it difficult to overcome bad reviews.

Discussion Question:

Do you agree with this?

8.3 Some tools and practices for managers

Do

• Create dynamic content
• Use Facebook as a standalone tool

Don't

• Move customer support off of the platform

Observation

• Zara doesn't post on Facebook frequently; only when they have a major update.

Discussion Question:

Is it true that brands that post infrequently, but whose few posts are high quality, still have a certain mystique?

9.1 Facebook: loyalty vehicle

Aspirational brands don't generate the same sort of customer loyalty on Facebook.

Loyalty

• Zara has more customers (94.4%) than fans (25.4%).
• Dolce & Gabbana has more fans than customers.

Summing Up

• While the Facebook demographic skewers young, it's important to build loyalty starting now.

Recommendations

• Sample a global population
• Analyze loyalty across platforms
• Gather survey data from those Zara customers who were converted on Facebook.