Should we reward customers for social media recommendations?

By if-admin | October 13, 2010
The Explosion in Social Shopping
The Explosion in Social Shopping

Developing brand loyalty and encouraging repeat sales is a challenge for online retailers, particularly in an increasingly competitive and crowded marketplace. With the ability to move between retailers at the click of a mouse and with a multitude of comparison sites for the savvy shopper, encouraging brand loyalty can feel like an uphill battle.

But social is providing a new route.

Reviews, recommendations and recognition

Our research, The Social Shopping Explosion, demonstrates that product reviews are on the up. 53% of respondents had reviewed a product or service in the past six month.

We also demonstrated that the review is rapidly catching up with both search and word of mouth in terms of influencing purchasing decision.

Consumers are increasingly writing reviews – and they are increasingly making purchases based on recommendations.

But it’s not quite clear where the retailers fit in.

The ethics of recognising customer recommendation

Recognising customer contribution is often approached with caution. There are whisperings of bribery or manipulation or undermining review authenticity. And as a social media agency, with our own reputation to manage, we tend towards caution.

However, only 3% of consumers would think negatively about a brand that recognised customer contribution.

53% would think more positively.

It’s a win-win situation. And the preferred form of recognition is not a discounted price.

The impact on brand perception if consumers are given incentives for recommendations
The impact on brand perception if consumers are given incentives for recommendations

Recognising your customer with a bit of retail love

83% of survey respondents would like a combination of transactional and experiential recognitions; and there is a marked trend towards exclusive offers and developing a closer relationship with the brand. The preferred forms of recognition, including “exclusive insight about the retailer” and “the ability to interact and talk to real people at the company” demonstrate a growing appetite for brand advocacy; and present a compelling opportunity for e-retailers to extend their relationship with customers beyond the point of sale.

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