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The influence of social media on member loyalty – An Indian perspective

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This week we have a guest blog from Gunjan Kumar, an ICLP loyalty expert in India.

The growth in social media usage to conduct e-commerce is already a worldwide phenomenon, but what is really interesting is the expectation that during 2012, 45 million Indians will be hooked on social media.  Additionally, 30 million Indians who are online consumers are also members of one social media site, which is why, companies are exploring new ideas and concepts to innovate using social media. Hence my chosen topic ‘the influence of social media on member loyalty’.

Social media has helped companies across the board to develop existing and new relationships with customers. Not that they did not have loyal customers before, but social media has given them a new way to reach out to the younger generation who are more internet savvy. People are able to constantly update their profile pages with activities and interests which allows businesses to develop more personalised  campaigns and offers  which meet their customers’ needs and ensure customer loyalty and retention.

A classic case study in India on delivering a product through customer insights and behaviour profiling was recently carried out by an Indian budget carrier, who found that people flying major routes like Delhi-Mumbai – Chennai- Kolkata don’t necessarily prefer turbojets. So what did they do? They utilised these planes on the non-major routes linking non-metros and smaller cities. What was unique about this initiative was the fact that the airline utilised social media to reach out to prospective customers.  Every new launch of a sector was announced only on Facebook and Twitter and users were given a link through which they could book tickets from the website. This ensured 88% load factor in the first two weeks of operation.

Another segment in India which is utilising social media is the telecom industry. The Indian telecom industry on average is 90% pre-paid based, 10% post-paid and on-top of it most of the pre-paid customers are aged between 15-24 which makes it one of the most internet savvy segments. Coming out with several pre-paid value offers to this segment through social media has again gained popularity in Indian telecom circles and is seen widely in use. An example of this is an Indian telecoms company creating a pay per second campaign run through Facebook, which was a clear case of how social media can be used to influence your customer behaviour by positioning it as an answer to a very important drawback in the Indian Mobile Operators billing (which was mobile billing were on per minute usage). This campaign was so successful that in all more than 1 million people visited the company Facebook page and the collective savings for these people were Rs. 3.71 billion ($82 million). Not only that, they even pushed barriers and have drawn engagement plans for their uses through Orkut and YouTube!

Banks in India are still trailing the social media band wagon. Estimates predict that by 2015 almost 98% of all working Indians will have a bank account and most of them will be engaged in social media sites. If there is one sector that needs maximum communication and interaction with customers it is the banking sector.  It seems that Indian nationalised banks have been a little slow to act and to engage their customers; however a few private sector banks have taken baby steps to engage customers through social media. One of the leading private sector banks in India has a great social media strategy and uses all available channels like Facebook, YouTube, Linkedin and Twitter to engage their customers and collect valuable feedback which enables the bank to provide their customers with personalised product offers they really want.

In summary I believe that new age loyalty programmes can no longer neglect the use of social media. Social media enables companies to create a listening platform where they can get a greater understanding of their customers wants and needs, thus roll out customer personalised offers and campaigns, therefore ensuring greater customer satisfaction, delight and stickiness!

Gunjan Kumar comes with a rich background of loyalty product management and loyalty consulting and has been with ICLP for the last 2 years. Prior to this, he was working with a Travel, Transport & Logistics company product managing a loyalty platform from scratch and then taking it to the APAC and MEA markets. He has also worked in Microsoft Business Solutions and Oracle India limited handling CRM/SCM/ERP products and services.

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