Dr. Hanlie Smuts August 2014 Social media and CRM – does it foster loyalty? Enhancing Customer Experience, Loyalty and Retention in Telecom 2014

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3 Restaurant 1 … was recently remodeled. has a fancy looking menu and prices to match. has flat screen TVs and granite counter tops. serves something resembling prison food. Restaurant 2 … was remodeled in has a coffee-stained piece of paper. has a crackly sound system and paper placemats. has great food, especially for the price.

4 Copyright© 2013 Mobile Telephone Networks. All rights reserved The topic we are discussing today …

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6 What drives customer loyalty? 73%55%36%33% “... friendly employees or customer service representatives.” Source: ORACLE “... the ability to easily find information or request help.” “... personalised experiences.” “... a good reputation.”

7 Copyright© 2013 Mobile Telephone Networks. All rights reserved What are the consequences of customer dissatisfaction? 89% “... of customers surveyed began doing business with a competitor.” “... posted a negative comment on a social media networking site.” 79% “... of which were ignored by the organisation posted a negative comment on a social media networking site.” 26% Source: ORACLE

8 Copyright© 2013 Mobile Telephone Networks. All rights reserved A response makes a huge difference … 46%22% “... were pleased.” “... posted a positive comment about the organisation.” 58% “... of respondents said their expectations were not met because a company was unavailable by phone or .” “... said companies are slow to resolve issues.” 56% “... said companies are impersonal and fail to get their customers’ names right.” 51% Source: ORACLE

9 Copyright© 2013 Mobile Telephone Networks. All rights reserved Highly satisfied customers.. … shop for longer periods of time … refer the organisation to friends and family with a positive sentiment … are indifferent to the competing brands … offer the organisation suggestions about products and services Source: BAIN, Kotler … buy more as long as new products are launched and existing products improved

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11 Copyright© 2013 Mobile Telephone Networks. All rights reserved Customer Satisfaction Some key metrics for measuring brand loyalty … Brand Goodwill Perceived Quality and Value Source: adapted from multiple models Brand Trust

12 Copyright© 2013 Mobile Telephone Networks. All rights reserved … the result of consistently positive emotional experience, physical attribute-based satisfaction and perceived value of an experience, which includes the product or services. Source: Beyond Philosophy

13 Copyright© 2013 Mobile Telephone Networks. All rights reserved Key principles driving loyalty … Brand Trust Customer Satisfaction Brand Goodwill Perceived Quality and Value Product &service differentiation Product & service attribute-based satisfaction Emotional bond building Reduced cost associated with customers and brand promoters Customer retention Cross-sell and up-sell Brand advocacy Customer acquisition Source: Aggregated multiple principles

14 Copyright© 2013 Mobile Telephone Networks. All rights reserved … is a system for managing an organisation’s interactions with current and future customers, increasing the profitability and productivity of the organisation. Customer experience refers to interaction between a customer and organisation as perceived through a customer’s conscious and subconscious mind i.e. a blend of an organisation’s rational performance, emotions evoked and intuitively measured against customer expectations across all moments of contact. Source: Beyond Philosophy, Kirmaci

15 Copyright© 2013 Mobile Telephone Networks. All rights reserved Key principles driving customer experience … Brand Trust Customer Satisfaction Brand Goodwill Perceived Quality and Value Rational choice of products or services that provides the greatest reward at the lowest cost Understand what will add value to customer Customer engagement Treating team well so they treat customers well Understand customer expectations Design and deliver an emotionally engaging customer experience Care for and know customer likes and dislikes Optimise rational experience e.g. delivery times, answer rates, ease of engagement Source: Aggregated multiple principles

16 Copyright© 2013 Mobile Telephone Networks. All rights reserved... evolution in the way people communicate. It is a fundamental shift in how customers behave and what they expect from the organisation across the customer life cycle … is the collective of online communications channels dedicated to community-based input, interaction, content-sharing and collaboration.

17 Copyright© 2013 Mobile Telephone Networks. All rights reserved Social media impacts all parts of the customer life cycle…

18 Copyright© 2013 Mobile Telephone Networks. All rights reserved Key principles driving social media … Brand Trust Customer Satisfaction Brand Goodwill Perceived Quality and Value Incremental sales channel Cross-sell and up-sell Targeted brand building Nurture long term customer relationships “Humanise” social network Better quality of interactions & TAT Adopt brand personality Source: Lincoln Manage degree of alignment and relationship history Multi-channel engagement based on customer choice

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20 Copyright© 2013 Mobile Telephone Networks. All rights reserved Bringing the principles together and considering the interrelationship among these … Brand Trust Customer Satisfaction Brand Goodwill Perceived Quality and Value Customer requirements Customer complaints Product & service differentiation CRM Brand awareness Brand engagement Customer base Source: Kirmaci, simplified model

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22 Copyright© 2013 Mobile Telephone Networks. All rights reserved Understanding what drives loyalty enables targeted and contextual marketing activity … Brand trust Customer satisfaction Brand goodwill Perceived quality and value Product and service launch Brand campaign Social media platforms Etc. ILLUSTRATIVE

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25 Copyright© 2013 Mobile Telephone Networks. All rights reserved  Every touch point matters. The first step to customer loyalty is to consistently deliver on your core business. Covering it up with gimmicks and gadgets won’t fool any customer.  General industry research can give you the big picture, but it may not explain what drives loyalty specifically with your customers. A last thought …

27 Copyright© 2013 Mobile Telephone Networks. All rights reserved Dr. Hanlie Smuts General Manager: Digital Mobile Telephone Networks 216 – 14 th Avenue Fairland Roodepoort 2195 South Africa Private Bag 9955 Cresta 2118 South Africa Web C