More and more companies have loyalty programs — and for good reason. A recent industry report showed that loyalty program members not only spend more and remain customers longer but they are also more likely to spread positive word of mouth. This helps explain why we’ve seen a proliferation of programs (we’ve seen new programs popping up across sectors like cosmetics, fast foods, and hotels). Target, for example, launched their Target Circle loyalty program ahead of this year’s holiday shopping period, after extensive test marketing showed increased spending for program members compared to those who were not enrolled.
Given that loyalty program members tend to be a brand’s most valuable customers — and are already several steps into their journey with a brand— companies need to consider how they are communicating with them across different channels. Our research (paper is in progress) shows that social media in particular can make loyalty programs more effective in driving sales, but only if done right.
We analyzed social media messages and the impact on loyalty program and non-loyalty program online sales for one company, a European operator of snow tourism resorts. We started by scoring 3,500 of the company’s Facebook posts using the five dimensions of brand experience. Each post was rated by social media experts on each of the dimensions. Relational posts make a connection beyond the recipient, for instance encouraging the use of product together with others, or as part of a tribe of interested consumers. Intellectual posts prod the recipient to engage in conscious mental processing, perhaps through humor, problem solving, or creativity. Posts that are high on the behavioral dimension include activity or interaction with the product or service. Sensory posts stimulate the senses and could involve breathtaking images or shocking multimedia content. Finally, emotional posts attempt to generate moods or feelings in the recipient. Once the posts were scored, we then analyzed the efficacy of each dimension in driving sales to loyalty program and non-loyalty program customers.
Which Dimensions of Social Media Experience Were More Effective?
We found that relational and intellectual posts were most effective in driving sales for loyalty program customers, while behavioral posts drove more sales from non-loyalty program customers. Interestingly, sensory and emotional posts weren’t effective with either group in our study.
Relational messages connect the recipient to a larger community around the product or service, strengthening a feeling of belongingness. Posts rated high on the relational dimension tend to illustrate inclusiveness or the connections between people. Because loyalty program customers have an ongoing relationship with the brand, they appear to be more open to relational themes, whereas non-loyalty program customers may be less drawn to relational messages from brands which they are not already strongly connected. One particularly effective post from the resort we studied promoted family-focused resort activities, with imagery of cross-generational connections. Loyalty program sales associated with this post were 210% more than expected based on the resort’s typical ratio of loyalty program to non-loyalty program sales.
Intellectual posts were also more effective with loyalty program customers. These customers are more invested in the brand and are therefore more likely to put forward the mental effort to engage mindfully with a detailed, intellectual post. One of the resort’s posts rated high on this dimension included a comprehensive list of festival activities with a stylized map, which requires careful consideration and processing from the recipient. This post resulted in an 85% increase in loyalty program sales compared to expectations. Members-only retailers such as REI and BJ’s Wholesale often take advantage of intellectually demanding posts by including detailed product content (and in REI’s case, outdoor lifestyle content). These posts require investments to both produce and consume the content, but brands see the value, knowing that their curious members are looking to deepen their brand relationship.
Behaviorally-themed posts can be effective with both customer groups, but were most effective in driving non-loyalty program sales in our study. These posts typically require less mental energy to process and encourage non-loyalty customers to visualize how they might interact with a product or service. One specific resort post that was rated high on the behavioral dimension mentioned leaving for the weekend and getting out to the slopes, with imagery showing a familiar behavior: getting off the chair lift. This post led to an 82% spike in non-loyalty program sales compared to expectations. One possible implication of this finding is that newer brands, who don’t yet have a large base of loyal customers, could focus on behaviorally themed messages in their social media with easily relatable messaging around physical interaction with the product or service to drive sales from not-yet-loyal customers.
The resort’s posts that were rated high on sensory and emotional content weren’t effective in driving sales from either customer group. This may be because the social media environment is a metaphorical screaming match, with a variety of posts vying for viewer attention. “Turning up the volume” through striking visuals or multimedia in this already over stimulating setting wasn’t an effective way to reach either group of customers. Similarly, emotional content that appealed to customers’ feelings did not effectively drive sales from either group. This may be because browsing social media can be emotionally exhausting, so further taxing customers’ emotions doesn’t work.
Many brands are struggling to capture value from their loyalty programs and trying to figure out how to best use social media to communicate with these customers. Some companies have set up distinct social media accounts for their programs. For example, Marriott’s newly launched Bonvoy program has very active social media accounts on Twitter, Facebook, and Instagram, which are run separately from Marriott’s flagship accounts. This allows Bonvoy to focus on content that loyalty program members value.
While our findings are based on the social media activity and financial results from one company (and we haven’t yet proven that they apply to businesses operating in very different domains), they provide digital marketers with some clues on what works and what doesn’t — and gives them a language to consider and communicate desired characteristics for their content. When trying to drive sales from loyalty program customers, think through what might be most effective (relational and intellectually themed content) and what could fall flat (attempting to shock the recipient with sensory or emotional content). And then post accordingly.
