Customer loyalty and corporate reputation

To what extent does corporate reputation affect customer loyalty? This study (.pdf, begin reading at page 28) found that corporate social responsibility (CSR) is the second most important factor influencing corporate reputation (with overall competency being first). In fact, CSR was found to have a higher impact on corporate reputation than product price. The authors posit that CSR impacts customer loyalty because such corporate behavior elicits customers’ positive emotions. Left unresolved is whether a company can over-leverage such CSR activities in its push to drive customer loyalty. In other words, where is a marketing line crossed in customers’ eyes where a negative emotion is associated with a company’s overt efforts to leverage its CSR activities; is there diminishing returns on such “cause marketing” activities.

Related post: Positive Authority and Digital Reputation

Customer loyalty and online community development

What factors keep an online community happy, involved, and engaged? The authors of this study (.pdf) found four primary things influence these three factors:

  • Purpose: Clearly define the purpose and values of the community space with a well-articulated and succinct statement so people who join the community know what to expect, while internally defining your (i.e., corporate) goal of the community
  • Monitor: Before you can know how a community vibe ebbs and flows, you must monitor the community’s interactions, and “embrace” community leaders perhaps by elevating their status within the community
  • Feedback: Implement meaningful rating systems (the authors site a rating system that reflects users’ behavior as an example of a meaningful rating system, as opposed to a simple “top ten” type system)
  • Organization: Clearly guide new community members about where to go, what to do, how to get acquainted, etc, while cuing or gently nudging existing users with meaningful suggestions and topics on how the community can grow and evolve

Related post: Community crowdsourcing and innovation

Customer loyalty and employee engagement

To what extent does employee loyalty and commitment to a brand drive overall customer loyalty? This research paper (.pdf) tackles that question and concludes that employee attitudes toward their company have a high degree of impact on customer loyalty. What the authors essentially argue is that fostering a corporate environment that espouses a unique and positive corporate culture grounded in clearly defined values goes a long way to inspire employees to be more engaged with their company and brand.  Once this baseline is met, the authors propose that brands create internal employee engagement indexes to monitor employee sentiments toward the brand (similar in concept to consumer engagement metrics) to ensure they remain committed to the brand and ultimately the customer. Thus, the company can ensure that it’s employees are working towards increasing customer loyalty. A perfect example of this is Zappos.

Related posts:  Creating a culture of creativity and innovation and Creativity Integrity and Brand Differentiation

Customer loyalty and customer trust

Trust is a major driver of customer loyalty. How does a corporate brand secure this trust following a breakdown in service delivery? The authors of this study (.pdf) ponder this question and proffer some intriguing insights. The authors argue that negative emotions experienced by a customer following a negative service experience do not necessarily change his or her attitude towards the service provider; rather, the customer simply leaves the service provider. Although losing a customer is never good, this finding is somewhat good news because it seems that customers are unlikely to carry a negative emotion for long with respect to the brand following a service break-down, thus minimizing the chance of an emotive outburst via social media that negatively affects the brand. On the flip side, a brand can enhance the trust and loyalty of its customer base if it honestly admits a mistake and vigorously works to correct such.

Related post: Trust indicators in social network marketing

Social Web resources 12-11-2009

Very well drafted and inciteful list of predictions for 2010. The author, Ravit Lichtenberg, delves into what will impact innovation, while opining that mobile become even more central, integrated/social search relevancy will begin to trump search aggregators like Google, and marketers will demand ROI.

Excellent discussion on measurment tactics for Google AdWords campaigns. Discusses basics of setting up a custom report in Google Analytics to tips on interpreting data.

This research paper (pdf link) explores the “viral effect” in Flickr (used as a model of social networks in general) and found that the viral effect generally stays within close proximity of the original uploaders, social links are the dominant method to share and spread a message, and popularity of pictures grows over years. The paper is not a “gentle” read, but worth your time if you want to dig in deep on data analytical methodology.

Future of search and search engines

Here’s an article that details some interesting issues relative to search, recapping a Xconomy Forum on the Future of Search and Information Discovery panel recently held in Seattle. On the dais were Microsoft, Google, and a couple of University of Washington professors. Here’s some salient take-aways:

  • It’s still unresolved whether vertical search will significantly impact general search
  • The nexus between real-time search, consumer intent, and semantic search is where the search gold resides
  • Hurricane Katrina taught Google a lesson about relevance and real time results
  • Opportunities to compete with Google and Bing exist, but only on the edge or fringe such as applications that bypass search engines, employ automated content discovery mechanisms, use semantic search, or perfect mobile geo-search

Interesting quotes:

Google is like smoking cigarettes, it’s a habit that’s going to be difficult to give up. So what can you do? You have to think about the problem space. Google’s approach is to get people in and out of search engine quickly with their result. Not the right way to think about it. Right way to think about it is to think about minimizing time of completing a task, not minimize the amount of time to match a query with a url.

[O]rganize the information in a way that synthesizes the task that you want to accomplish.

Mobile is huge. Apple is the big fish at the moment. Android coming on strong. Won’t hold my breath on Microsoft.

Two things which potentially threaten us. [1] As we become bigger and older, it could become more difficult for Google to innovate…[2] Also worry about diminishment of sense of entrepreneurship.