Corporate Branding in 2016: Common Pitfalls of Using Social Media in Your Customer Retention Strategy

All brands fight the good fight to acquire new customers every day, often overlooking the fact that customer retention and strengthening customer loyalty towards the brand sell better. According to recent studies published by the SumAll network, 25% to 40% of total revenues of the most stable and thriving businesses in the world come from loyal and returning customers. In a world where the simple word of mouth and the personal recommendations system were topped by social media means, customer retention seems to be a low-hanging fruit all businesses should be able to pick and turn into gold.

Marketing specialists agree that new client acquisition costs up to 7 times more than customer retention. Therefore, it makes sense to see brands pushing their social media strategies towards increasing their clients’ loyalty into the brand and offer them the opportunity to be engaged in a two-way dialogue. According to Gartner Inc. statistics, 80% of a company’s future constant revenue comes from just 20% of its existing customers. The data is backed up by a recent Bain & Company study showing that a 5% increase in customer retention can lead to 75% increased profitability for the respective business.

Retaining Customers Strategies through Social Media: The Good, the Bad, the Lessons

The problem for small and medium businesses (and for some corporations as well) is that not everybody can push massive budgets into social media campaigns to boost customer loyalty and retention. However, the budget spent by mammoth brands is not always the key to success, as we will see immediately.

The key is how to pass the correct message to the correct customers in order to ignite their positive sentiments towards your brand, to gain their respect and to make them feel they are your most important asset. There are giant corporations that failed miserably with their social media campaigns tailored towards customer retention in spite of the huge budgets spent (Pepsi is one of them), and there are brands that managed to succeed by employing simple and repeatable social media campaigns which enlarged their pool of loyal customers astronomically. Let’s see two such examples.

1. The Bad: Starbucks #RaceTogether Twitter Campaign

Last year, Starbucks launched an ambitious Twitter campaign in March, right after the Ferguson events. As we all remember, the shooting of unarmed teenagers Michael Brown and Eric Garner by a police officer led to riots and unrest, political debates and activism revolving around racial issues. Starbucks Twitter campaign was titled #RaceTogether and wanted to spark a national dialogue on race, both in-store and in the online environment. While good on paper, the campaign, concocted and led by a white male successful corporate CEO, backfired in more ways than one.

What Went Wrong

According to Networked Insights, the Starbucks campaign pushed people over the edge from an emotional point of view. The timing couldn’t have been worse and the #RaceTogether Twitter storm poured over an emotionally charged context of debate over racial inequity. People considered the Starbucks campaign to be superficial, disregarding the gravity of the events that shook the nation to the core and insensitive towards all parties involved in the human, social and political drama that was unfolding in the meanwhile.

Speaking about a two-way dialogue, specialists summed up the results and concluded that the conversations sparked on Twitter in the #RaceTogether campaign were spread in two extremes: they either had nothing to do with race and racial talks, or they were directed against the Starbucks brand and the campaign itself.

The Results

  • Race Together received 2.5 billion impressions in less than 48 hours – filled with hate speech and negative reactions towards the brand and the CEO.
  • The “hate” wave that struck Starbucks (more than 1/3 of total social conversations were labeled as “hate” directed at the brand, the campaign, and the Starbucks CEO) led to the termination of the campaign just one week later.
  • Data shows that more than 60% of conversations were filled with negative emotions and reactions from the public towards the brand.

Lessons to Learn

  • The campaign was poorly researched in terms of emotional message, target audience, and public resonance.
  • The timing was bad: in the course of a national debate on sensitive issues such as race, the campaign placed the CEO and the brand as saviors, not change makers, not problem solvers, but mere heralds of world peace (metaphorically speaking), and this was one of those things people didn’t want or believe in. They wanted solutions to solve the crisis and genuine messages to follow, viable anchors to build change on, not random knights on white horses.
  • Race, gender, religion, sexual orientation and many more are extremely sensitive topics and it is recommended to avoid capitalizing on them if the message is not genuine and foolproof.

2. The Good: Hellmann’s WhatsCook WhatsApp Campaign

Last year, the famous mayonnaise company Hellmann’s put together an innovative and successful social media campaign. They wanted to actually help people and engage their real customers into a strong relationship with the brand. They initiated a service called WhatsCook encouraging WhatsApp users to get in touch with a real chef and learn how to make delicious dishes with the products they had on hand around the kitchen. All those people having a few ingredients in the fridge but not having a clue on how to mix them together, were guided by a real chef in achieving a great recipe.

What Went Well

This campaign offered people something of true value, something palpable, eatable and shareable. Not knowing what to cook is a global dilemma and those taking part in the campaign received not only a recipe idea, but a step-by-step live guide during the cooking process. At the end of the day, people applauded Hellmann’s for the idea, had something new and exciting to serve to dinner and incorporated Hellmann’s mayonnaise in their recipes.

The Results

  • On average, users of the WhatsCook service spent 65 minutes interacting with the chef (and the brand) while they cooked
  • The campaign impacted more than 5 million people
  • More than 13,000 of people signed up for the service after seeing their friends sharing the enthusiasm
  • The campaign scored a fantastic 99.5% of user approval
  • 1 in 2 company website visitors signed up for the WhatsCook service
  • Messages along the lines of “Thank you, Hellmann’s, I will buy more of your mayonnaise” was exactly what the company wanted to achieve in the first place
  • The campaign cascaded on other social media platforms as people shared their enthusiasm

Lessons to Learn

  • The campaign worked like magic because it delivered a tangible result at the end of the day and helped people find inspiration and ideas.
  • The campaign also worked because it was rolled on WhatsApp – it was fun, innovative and rather new.
  • Don’t get stuck in traditional social media campaigns, but explore other unbeaten paths, like Vine, Instagram, Medium, and YouTube and so on.
  • Give people the feeling you value them most and you are willing to meet their needs.
  • Always give something to gain something; in this case, they spent money and time with the chef and the campaign, but the returning customers were already hooked.

Budget always helps, but creativity, good will and good timing can turn a social media campaign into a gold mine. Successful corporate branding through social media can be achieved if you don’t overlook some of these factors:

  • Research: audiences, the emotional impact of campaign, timing, social context.
  • Match the campaign to the platform.
  • Tap into trends which don’t revolve around sensitive issues but pleasant and popular
  • Showcase your fans and users and turn them into brand ambassadors.
  • Be helpful to your customers and capitalize on customer service campaigns.
  • Leverage on your own
  • Create loyalty programs.
  • Show off your brand’s

You may not get things right from the first trial, but with some fine tuning here and there you can create a memorable social campaign to retain your customers and boost your revenues.

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