The emergence of social media in the last few years has greatly changed the way we interact with one another. It’s an obvious statement, and maybe an overly simplified one, but it brings with it many implications that are worth considering. This is especially true when we ask exactly who comprises “one another”; i.e. who exactly is interacting with whom. We’re no longer just sharing photos with friends or commenting on the lives of those in our college network. We are increasingly engaging companies and brands on an interpersonal level. And the companies and brands are, of course, making the most of it.
This is where the concept of “social loyalty” comes in to play. For today’s businesses, social loyalty is essentially a means of rewarding those customers that most engage their brand. So where in the past a customer might gain reward points for making a purchase (think frequent flyer miles, buying ten sandwiches and getting an eleventh one free, etc.), now a customer might gain reward points for liking a brand on Facebook. In an article on the subject, Social Commerce Today places particular emphasis on this distinction between “transaction value” and “relationship value”. Writing for SCT, Paul Marsden, a social psychologist who specializes in social marketing strategy, notes that “In traditional social commerce it’s all about driving transactions by helping people connect where they buy or buy where they connect. Social commerce with a loyalty focus is all about driving total customer value over time, purchase value plus referral value”.
Social Commerce Today presents this concept of social loyalty as the best way for online businesses to compete with the Amazons of the world; those retail giants that can offer lower prices and a wider product range than smaller competitors. It’s a mutually beneficial relationship that strengthens the bond between customer and brand over time. Thus the “loyalty” in social loyalty is apt. Customers have a reason to continue to engage the business (they’re being rewarded with credit points), and the businesses have a reason to reward the customers (they’re being provided with renewable business through free marketing and referrals).
And as has always been the case, where emerges a new market, so emerge new companies to take advantage of it. One such company based in New York, CrowdTwist, guarantees to increase revenue and engagement for their clients by unifying their “disparate online presence into a singular, revenue-driving platform”. They do this by mining and analyzing data from all major social media outlets, providing incentive based “games” in which customers can compete with other customers to win points, and even selling points for online currency, thus creating “a brand new revenue stream for many clients”.
And investors are taking notice. 500Friends, a California based startup providing social loyalty solutions for e-commerce sites, recently received $4.5 million in series A funding (some of that came from 500Friends CEO Justin Yoshimura, an angel investor in his own right, but still). The point is, social loyalty is beginning to be recognized as a viable way to drive revenue without spending much more on advertising, thus driving profits. And investors will always be drawn to that.
So what does this mean for us as recruiters? For one, we can start working with companies that provide this service. They will continue to pop up as long as they continue to receive funding. But I can’t help but think there’s a better lesson to be learned here. Pinpointing exactly what that is will take a bit more thought and consideration, but the concept of incentivising online interaction must in some way be relevant to our business. Granted, our business is inherently different, at least on some level, than a retailer that sells, say, shirts. But the skeleton of the model still applies here. Encouraging the businesses and people that we work with to engage us in a visible way, and to do so over and over again, will invariably be a positive thing.