By Bob Burke, CEO of ATG

The Wall Street Journal has recently run a couple of interesting stories related to customer loyalty, online marketing, and social computing. One of these articles (Marketing in the World of the Web, by Tom Hayes and Michael Malone) centers on the power of social networks to “reconfigure individual behavior.” It argues that retailers need to leverage this social movement to help their efforts to create a more loyal consumer base, thereby increasing sales and profits. Offering their thoughts on a “Marketing 3.0” world, the authors focus their comments on 5 key themes:

- Gaining customer attention before winning loyalty
- Appealing to specific communities of interest vs. the general customer base
- Targeting the “meganiches” of highly specialized, yet relevant, online communities
- Exploiting the viral power of social communities
- Making offline and online channels work in tandem

Which got us to thinking…
This entire topic is near and dear to us at ATG, and to our customers who are facing the challenge of building revenue in an environment where, for many online businesses, the majority of revenues are starting to come from an existing, steady, loyal customer base more than from newly acquired customers. Rather than focus on customer acquisition tactics, the companies that will thrive during a downturn will be more focused on retention and finding a new twist on their marketing strategies. That twist just may come from the growing “cloud” of online social communities that the article discusses.

Successful online businesses are coming to understand that user generated content and social communities can be critical elements of a state-of-the-art online customer experience. They’re learning how to translate that understanding to increased customer loyalty and sales conversions. However, many other retailers are still trying to figure out how to use this powerful voice of the consumer, and the wisdom of the crowds, to their advantage.

As social networking continues to grow, there are new participants, there are new outlets, and yet there are limited connections between a “Web citizen’s” goals and a merchant’s goals. The opportunity here is for retailers to engage and leverage their “zealots” – those consumers deeply attached to a company or its products and services – to become stronger advocates. In addition to coming back themselves, they have enormous potential to spread enthusiasm to their friends and other contacts. From the consumer perspective (that of both zealots and more passive consumers), retailers need to provide as many easy ways as possible to share opinions, keep the zealots and their networks informed, and reward their efforts to share their enthusiasm.

Find and nurture the zealots
To be successful, merchants need better capabilities to identify and recognize their zealots and they need easy ways to provide targeted, dynamic content such as product updates, promotions, and special offers to encourage them to share their enthusiasm far and wide throughout all their social connections. They also need the tools to track results, learn from, and refine their marketing efforts to their zealots.

In order to help merchants turn these loyal zealots into profit engines, effective commerce platforms not only need to provide integrations with top social sites, they also need to give merchants the power to:

- Automate information updates to web pages both in the store, and elsewhere on the site
- Allow shoppers to post content from a merchant’s site to their desired social pages
- Automate information updates to their subscribers

In order to properly empower the social shopper to be a stronger ambassador, merchants need to begin targeting and segmenting consumers in order to provide contact and products that are relevant and meaningful. They need to know what their power shoppers and power content contributors are doing on their site, so merchants can serve them special, appropriate content that speaks to their status and ability to influence others.

Use a cross-channel strategy to effectively reach social communities
There is also an urgent need to ensure cross-channel consistency when customers engage with a merchant. Customers don’t necessarily think about what “channel” they are accessing when approaching a merchant. They don’t understand why the experience they have on a company’s web site should be different from the customer care or in-store experience. They merely think about their interactions with a company as all part of a whole. To that end, retailers can provide access and sharing via mobile channels. Mobile commerce is reaching critical mass overseas, and in the US we are on the cusp of a breakthrough. Engaged social shoppers will continue to evolve and look to utilize their smart phones to research, shop, and share product data among peers and colleagues.

These are initial steps that we’re seeing top merchants both considering and successfully implementing in an effort to better engage their zealots, incent them to share, and drive long-term loyalty and lifetime value. In today’s social commerce environment, these tactics are decreasingly seen as “nice to have” customer experience offerings. They may soon be key to a retailer’s ability to survive – and thrive.