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Loyalty360 sat down with Gilbert Bailey, Vice President, Analytics & Customer Engagement, Xenial and Adam Leff, Chief Strategy Officer and Co-founder, Merchant Centric.
Loyalty360: It’s common knowledge that social media sentiment has the potential to impact a business, both in acquiring new customers and retaining existing ones. How important is that correlation?
Bailey: Consumers increasingly count on online research to help them make buying decisions. Today’s online reviews, simply put, have replaced word-of-mouth recommendations in terms of their power to influence purchases. The reasons are clear. The vast majority of people carry a mobile device, providing an instant source of information at their fingertips. They tend to trust online reviews—according to ReportLinker, 78% believe online reviews about businesses are reliable.
And the quality of those reviews has a direct impact on sales. A Harvard Business Review research report found that a one-star increase in a restaurant’s Yelp rating translates into a 5-9% increase in revenue. When it comes to restaurants, the star rating is the number one factor considered when choosing a place to eat, according to recent findings by socialmediaweek.org. For businesses overall, 49% of consumers need to see at least a four-star rating before they will even walk through the door of a business, according to BrightLocal.
These are just a sampling of the evidence showing the power social media wields. So having an online presence and managing that presence in terms of the public conversation about your brand have become crucial elements of marketing any business.
Loyalty360: Where do you see the public’s penchant for sharing opinions heading, and how can businesses better control the conversation?
Leff: In analyzing more than 27 million U.S. businesses, we’ve seen a dramatic spike in the amount of online reviews. Between March 2017 and 2018 the online reviews of businesses grew by a staggering 66% to more than 610 million total reviews. Not surprisingly, restaurants in particular are the subject of much of that social media activity; the top most-mentioned restaurant categories alone generated more than 141 million reviews.
With so many guests making contact with businesses through online reviews, success demands that business owners and managers make an effort to stay engaged with their current and potential audiences. Businesses can no longer afford to be passive participants in social media; they need to interact with consumers who are posting reviews—both good and bad—on review sites, search sites and other social media channels that consumers rely on. Restaurants increasingly understand the importance and potential power of engagement. In fact, our study found that between March 2017 and March 2018, there was a 29% increase in the rate of restaurants responding to online reviews. Restaurants respond to guests at a 46% higher rate than all other business.
In this day and age, it’s no surprise how many companies are responding to online reviews or other social media comments regularly. Since guests expect a reply, clearly, the shrinking few that do not engage with their guests online will find that their guests will leave them behind. Companies that do a good job of engaging on social media stand out. They also build their brand and the health of their business.
Loyalty360: What are some additional ways companies can engage with customers and potential customers?
Bailey: It starts with monitoring. Given the amount of activity, getting a handle on how your company or brand appears on multiple social media sites is essential. Knowing what’s being said allows a business owner to thank happy and loyal customers and do damage control when someone has a negative experience—before that experience can harm their reputation.
Because manually keeping track can be a challenge, having a social media reputation management platform in place to streamline the work makes sense for many businesses. By consolidating reviews from various sites, flagging negative comments and tracking shares and likes, it allows business owners to stay on top of user-generated content and sentiment. They can gauge public opinion, learn what kinds of promotions and content click with their customers and act on complaints before their reputation suffers further damage. Social becomes an instrument for listening and driving continuous improvement.
Loyalty360: What’s the ultimate goal of customer engagement, and how to you keep unhappy customers engaged?
Bailey: Because social media has such reach, you want your audience to become brand advocates. Treating them with respect, thanking them for their praise, righting wrongs: all these practices help create loyal, repeat customers who become fans and in turn share their experiences with other potential fans. So do loyalty programs that reward members for their patronage—and for chatting up the benefits of patronizing your business.
We know that it takes twice as much work to win over a new customer as it does to keep an existing one happy. And negative reviews or comments have the potential to go viral, creating a much larger challenge. For both those reasons, it’s crucial to have a process in place to identify negative comments and reviews and address them.
We recommend first monitoring social media, preferably with the help of programs that streamline tracking, posting and feedback responses across a range of social channels. Both good and bad comments should be addressed promptly.
Next, embrace all criticism—constructive or not—and respond sincerely. Demonstrating the willingness to right a wrong in a timely manner will score points with the aggrieved party and show others that you stand behind your product. Accept blame for the situation and offer a way to appease the critic.
And don’t wait too long to reach out. A study by TNS Nipo of 2,000 social complaints showed that 70% of those who had aired grievances hoped for a response, yet only 38% received one. According to the study, three factors determined how satisfactory the response was: the speed of response, the quality of the solution and how well the business provided the human touch. Owning your problems and handling them with grace will help your business stand out from the pack.
That personal touch, by the way, creates a meaningful and lasting impact that will engage the unhappy customer and is more likely to win them over. Thank the customer for the feedback, be specific about the problem encountered, apologize, provide a remedy or compensation, invite them to return and provide your contact information in case they want to explore the issue further.
Xenial partner Merchant Centric was recognized by CIO Review Magazine as the company that “pioneered the science of leveraging online customer reviews to drive performance and revenues for businesses.”
Xenial, Inc., a Global Payments Company, serves merchants with a range of leading customer engagement and commerce technology solutions, including social reputation management tools that are integrated with our complete analytics, engagement, and marketing stack.
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