Dr. Hanlie Smuts August 2014 Social media and CRM – does it foster loyalty? Enhancing Customer Experience, Loyalty and Retention in Telecom 2014.

Dr. Hanlie Smuts

August 2014

Social media and CRM – does it foster loyalty?

Enhancing Customer Experience, Loyalty and Retention in Telecom 2014

2Copyright© 2013 Mobile Telephone Networks. All rights reserved

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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6Copyright© 2013 Mobile Telephone Networks. All rights reserved

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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11Copyright© 2013 Mobile Telephone Networks. All rights reserved

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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20Copyright© 2013 Mobile Telephone Networks. All rights reserved

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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22Copyright© 2013 Mobile Telephone Networks. All rights reserved

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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#overshare

24Copyright© 2013 Mobile Telephone Networks. All rights reserved

#overshare

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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 …

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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]