Loyalty Has Its Privileges

Invitation only.” “Private.” “Exclusive.” “VIP.” These words hold a lot of power in the marketing world. Nightclubs make their living off of that allure; the retail world has been turned upside down by the success of invitation-only sites, such as http://www.ventee-privee.com in Europe and its U.S. equivalent, Gilt Groupe, that offer incredible deals to those in the know. Patrons spend thousands to sit at a tiny table in the VIP area of a nightclub; flash sale sites sell out in minutes. Although often a mirage (getting an invitation to a private sale club is often as simple as entering an email address), the allure of exclusivity has a profound effect on consumer behavior. Mainstream brands have taken notice and are incorporating this into their marketing strategies, especially online.

The Web offers exponential consumer touchpoints, as well as a way to market and amplify your message far and wide. It makes it possible to more regularly connect with your customers, giving them information and getting feedback that can inform how you do business.

The common online marketing approach has been “bigger is better.” Many companies use public social networks, like Facebook and Twitter, or develop branded public communities to reach as many consumers as possible with the hopes of acquiring new fans. By taking this approach, brands can easily show what they are promoting, and anyone can come and check it out; the viral possibilities are endless, depending on the quality of your campaign. The interaction is completely open, making it easy to see how consumers are reacting to your message. Likewise, consumers can check out what their peers are saying about the brand/product/service being promoted.

This latter positive can also be a negative. When you are completely public, these initiatives feel less personal and participants less “special” because everyone, including your competitors, can see what you are offering or asking of consumers. The public nature of these campaigns often confines what you can reveal to your audience, and you may have to limit what you include in your public networks in case a competitor is monitoring your community.

As with any marketing campaign, there is the chance that attempts at a personal brand connection through public social networks can go horribly wrong. Consumers can instantly amplify positive or negative experiences and share their appreciation or disdain for the brands they use via Twitter, Facebook, and personal blogs. The social Web offers no cooling-off period—consumers can publish their thrills or chills within moments of engaging with a brand. Facebook and Twitter can certainly reach higher volumes of consumers, but the interaction is usually one way (and with Twitter, limited to 140 characters), making it tough to directly engage each member. Many brands struggle to create authentic intimacy in these massive public forums without losing the scale and reach necessary to compete in the mass market.

Another approach is to focus on your most loyal and vocal customers by initiating direct conversations and establishing true dialogue with them through a more private setting. Ask consumers to take part in an invitation-only-based online community to help shape the brand, services, and products they care about. This personal invitation gets them in the door, creating a more immediate connection to the brand. Once they are in, you can foster even more of the “velvet rope” feeling by sharing exclusive content and sensitive information. By getting customers involved in the creation process, you will induce them to keep coming back. By getting them involved in your decision-making process in a pre-emptive fashion, you create a deeper connection and a true dialogue with your audience, leaving them more invested in your brand.

There is no better tool for creating intimacy than showing someone you are listening. Bring them into the product development process; solicit input on a new ad campaign; ask your “inner circle” what types of perks they might like as part of a rewards program; then show them how their input is being put to work. You can reward their loyalty and enthusiasm with access to insider information, special brand experiences, or “credit” toward something they care about. By giving your principal fans exclusive access to the brand, their connection will grow even stronger, and they will feel more inclined to help spread the word about your most important initiatives.

Most companies find that a majority of their business comes from a disproportionately small percentage of loyal customers. Therefore, it makes perfect sense to start small and build real, tangible relationships with your inner circle of fans. As you cultivate more exclusive relationships, those behind the velvet rope will continue their loyalty and will begin to spread the messages that you want broadcasted beyond the inner circle.

For many brands, a well-run community takes engaged members and turns them into ambassadors—driving interest around offline events, building word-of-mouth buzz around the community itself and the brand. This is something a Facebook and Twitter presence can rarely accomplish because the level of engagement is not as high. Treating your customers as VIPs and giving them exclusive access to your brand and the decision makers that shape it can drive unprecedented levels of brand loyalty and advocacy.

About the Author

Jas Dhillon (jdhillon@thinkpassenger.com), general manager of Product and Technology at Passenger, brings to the company 11 years of CEO/GM experience and 14 years of Fortune 100 operational leadership experience (including Microsoft and IAC/InterActiveCorp), the majority in Internet services and the rest in strategy consulting, wireless communications, and venture capital.

Please note that the Viewpoints listed in CRM magazine and appearing on destinationCRM.com represent the perspective of the authors, and not necessarily those of the magazine or its editors

If you would like to submit a Viewpoint for consideration on a topic related to customer relationship management, please email viewpoints@destinationCRM.com.

For the rest of the October 2010 issue of CRM magazine, please click here.

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