Dr. Hanlie Smuts
August 2014
Social media and CRM – does it foster loyalty?
Enhancing Customer Experience, Loyalty and Retention in Telecom 2014
3Copyright© 2013 Mobile Telephone Networks. All rights reserved
Restaurant 1 …
• was recently remodeled.
• has a fancy looking menu and prices to match.
• has flat screen TVs and granite counter tops.
• serves something resembling prison food.
Restaurant 2 …
• was remodeled in 1989.
• has a coffee-stained piece of paper.
• has a crackly sound system and paper placemats.
• has great food, especially for the price.
Which venue would get more of your business?
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The topic we are discussing today …
Social media and CRM – does it foster
loyalty?
Social media and CRM – does it foster loyalty?
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What drives customer loyalty?
“What makes a memorable experience that causes a customer to remain loyal to a brand?”
73% 55% 36% 33%
“... friendly employees or customer service representatives.”
Source: ORACLE
“... the ability to easily find information or request help.”
“... personalised experiences.”
“... a good reputation.”
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What are the consequences of customer dissatisfaction?
“50% of customers give a brand only 1 week to respond to a question before they stop doing business with them.”
89%“... of customers surveyed began doing business with a competitor.”
“... posted a negative comment on a social media networking site.”
79%
“... of which were ignored by the organisation posted a negative comment on a social media networking site.”26%
Source: ORACLE
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A response makes a huge difference …
“When a customer’s online comment was met with a
response ...”
46% 22%
“... were pleased.”
“... posted a positive comment about the organisation.”
58%“... of respondents said their expectations were not met because a company was unavailable by phone or email.”
“... said companies are slow to resolve issues.”
56%
“... said companies are impersonal and fail to get their customers’ names right.”
51%
Source: ORACLE
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Highly satisfied customers ..
… shop for longer periods of
time
… refer the organisation to
friends and family with a positive
sentiment
… are indifferent to the competing
brands
… offer the organisation
suggestions about products and
services
Source: BAIN, Kotler
… buy more as long as new products are launched and existing products improved
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Customer Satisfaction
Some key metrics for measuring brand loyalty …
Brand Goodwill
Perceived Quality and Value
Source: adapted from multiple models
Brand Trust
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… the result of consistently positive emotional experience, physical attribute-based satisfaction and perceived value of an experience, which includes the product or services.
Source: Beyond Philosophy
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Key principles driving loyalty …
Brand TrustCustomer
SatisfactionBrand Goodwill Perceived Quality
and Value
Product &service differentiation
Product & service attribute-based
satisfaction
Emotional bond building
Reduced cost associated with customers and
brand promoters
Customer retention
Cross-sell and up-sell
Brand advocacy Customer acquisition
Source: Aggregated multiple principles
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… is a system for managing an organisation’s interactions with current and future customers, increasing the profitability and productivity of the organisation.
Customer experience refers to interaction between a customer and organisation as perceived through a customer’s conscious and subconscious mind i.e. a blend of an organisation’s rational performance, emotions evoked and intuitively measured against customer expectations across all moments of contact.
Source: Beyond Philosophy, Kirmaci
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Key principles driving customer experience …
Brand TrustCustomer
SatisfactionBrand Goodwill Perceived Quality
and Value
Rational choice of products or services that provides the
greatest reward at the lowest cost
Understand what will add value to
customer
Customer engagement
Treating team well so they treat customers well
Understand customer
expectations
Design and deliver an
emotionally engaging customer
experience
Care for and know customer
likes and dislikes
Optimise rational experience e.g. delivery times, answer rates,
ease of engagement
Source: Aggregated multiple principles
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... evolution in the way people communicate. It is a fundamental shift in how customers behave and what they expect from the organisation across the customer life cycle
… is the collective of online communications channels dedicated to community-based input, interaction, content-sharing and collaboration.
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Social media impacts all parts of the customer life cycle…
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Key principles driving social media …
Brand TrustCustomer
SatisfactionBrand Goodwill Perceived Quality
and Value
Incremental sales channel
Cross-sell and up-sell
Targeted brand building
Nurture long term customer relationships
“Humanise” social network
Better quality of interactions & TAT
Adopt brand personality
Source: Lincoln
Manage degree of alignment and
relationship history
Multi-channel engagement
based on customer choice
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Bringing the principles together and considering the interrelationship among these …
Brand Trust
Customer Satisfaction
Brand Goodwill
Perceived Quality and
Value
Customer requirements
Customer complaints
Product & service differentiation
CRM
Brand awareness
Brand engagement
Customer base
Source: Kirmaci, simplified model
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Understanding what drives loyalty enables targeted and contextual marketing activity …
Brand trustCustomer
satisfactionBrand
goodwillPerceived
quality and value
Product and service launch
Brand campaign
Social media platforms
Etc.
ILLUSTRATIVE
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Every touch point matters. The first step to customer loyalty is to consistently deliver on your core business. Covering it up with gimmicks and gadgets won’t fool any customer.
General industry research can give you the big picture, but it may not explain what drives loyalty specifically with your customers.
A last thought …
27Copyright© 2013 Mobile Telephone Networks. All rights reserved
Dr. Hanlie SmutsGeneral Manager: Digital
Mobile Telephone Networks216 – 14th Avenue FairlandRoodepoort 2195 South AfricaPrivate Bag 9955 Cresta 2118 South AfricaWeb http://www.mtn.co.za
C +27 83 222 1111E-mail [email protected]