Make Marketing History

The views of a marketing deviant.

Tuesday, July 03, 2007

The Secret Of Customer Loyalty.

No great surprise to read in this report that "Nearly 40% percent of MySpace users keep profiles on other social networking sites such as Friendster and Facebook. Loyalty among the smaller social networking sites is even lower, with more than 50% of all users actively maintaining multiple profiles."

Ease of entry generates all sorts of innovation for sure, but it's not so helpful in terms of creating the barriers to entry that have traditionally been at the heart of any sustainable business. Build and they will come, but you have to keep building or else someone else will jump in. First mover advantage is dependent upon not making a mistake and some might say that the corollary of living in beta could be that customer loyalty is denuded.

But for me, the lesson from this is not about technology but rather that loyalty in social networks (and in most businesses) is devoted to the connection not the method of connecting. It echoes the age-old argument in media industries about whether you should focus on content or distribution for competitive advantage. If you own distribution you can monetise even your worst programming runs the theory, but, in reality, you can't monetise it much because if it's bad programming, nobody wants to see it. The connection isn't strong enough.

Build and they will come, but build well and they're more likely to stay. That is message that risks getting lost in the hype. For loyalty, read customer value. The value to the media consumer lies in the content above and beyond the distribution. The value to the social networker lies in the social connection not the connector. Focus on providing your users with great value - their definition, not yours - and loyalty will follow.

7 Comments:

Blogger iScatterling said...

I have to wonder at how effective these sovcial networks really are.

Which one is flavour of the month? Or to put it bluntly, which one will see a load of advertising money spent and wasted on it?

I was a weblogbloggertypeperson, then I thought it a waste of time and energy. So I ventured over to MySpace and thought that was utter crud. So strolled to Facebook and opened up a profile there but cannot work up the urge to stay there either.

It all seems so pointless. All these sites that the developers claim are the best social thing since sitting at a French bistro and ripping up a baguette and dunking it in your hot chocolat, are in fact nothing but a good old fashioned bus terminus with a load of strangers eyeing each other up, trying it on with some gorgeous doll (who could be a bloke behind the photo)with a chat up line or two then moving on when she/he does not respond.

Oh of course I have tried it on and been rejected. I don't do rejection well, hence this commentary....!!.

Social Networking is transient. So will Second Life be as well?

11:23 AM, July 03, 2007  
Blogger john dodds said...

Second Life still exists??? Sheesh.

But social networking is what we all do in real life so I have to say I think it will not disappear, it will become absorbed into business in as yet undetermined ways.

12:54 PM, July 03, 2007  
Anonymous ann michael said...

Isn't it also possible that people don't abandon one network for the other but instead maintain multiple networks?

My 16-year old daughter does that - as do I. I have profiles on Twitter, MyBlogLog, LinkedIn, Technorati, Skype, etc. and I use them all.

Then, as you do, I also have my blog and the multitude of relationships that it has enabled - not part of a formal social network (i.e. a social networking product) but kind of out there on its own.

I agree John, social networking is what we do naturally - it's not going anywhere - the tools are just getting better.

Ann

(PS - you can build network on Second Life too!)

11:10 AM, July 04, 2007  
Blogger lauren said...

i'm one of those daggy 60% that hasn't tarted myself across networks. yes, myspace is crud, but it's the crud where most of my friends currently reside. facebook seems like myspace for adults and i'm just not ready to take that leap yet (despite officially being a 30-something!).. it will be a while yet too.. i still can't be arsed.

5:38 PM, July 04, 2007  
Blogger iScatterling said...

Ok so I am trying Twitter or Tweeter. Now I need friends so bloody well hurry up and register and invite me or I can invite you or wottevva! I do not want to stand around like Robbie No Mates!

Hardly to go through all this process in setting oneself up on these social network things only to sit there like a wallflower at the disco.

10:13 AM, July 06, 2007  
Blogger john dodds said...

Disco -surely you mean a club? LOL

9:39 AM, July 07, 2007  
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4:03 AM, March 28, 2009  

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