Customer Satisfaction, Commitment, and Loyalty Drivers

For-profit corporations can learn much from association membership practices, and associations can, similarly, learn from corporate practices and research.

That’s why I found the study of what drives customer satisfaction, relationship commitment, and loyalty intention in online communities of interest. The study's results appeared in the article "Creating Customer Loyalty in Online Brand Communities" in the journal Computers in Human Behavior.[1]

The research recruited participants from two online brand communities and surveyed them about their experiences. A total of 627 submitted their responses to an online questionnaire using a five-point Likert scale from 1 (strongly disagree) to 5 (strongly agree) on the elements that supported the commitment to the brand's products.

The research explored many hypotheses but found four top correlations to these community commitment characteristics.

The top finding supporting customer satisfaction and loyalty focused on how well the brand provides comprehensive product information to the participants. Meeting this need requires good community management with detailed brand and product insights for the community.  

Likewise, the second significant predictor of customer satisfaction and relationship commitment is the need for what the authors call “bridging social capital.” By this, they mean consumers' desire to connect with new people who will share different perspectives and offer new thoughts about the products. They want to engage with those outside their immediate circle for additional views.

Respondents next stated that they wanted a pleasurable emotional experience. Ideally, community managers should identify the elements that cause customers to feel positive emotions. This outcome may suggest that eliminating divisiveness from the community is necessary.

Finally, the fourth significant predictor of customer commitment requires a perceived critical mass in the community. No one wants to be involved in an echo chamber, so there needs to be a substantial level of interaction and discussion.

Reviewing these findings, I found them applicable to my online community experience. As a Washington Nationals baseball fan for years, I have participated in a team blog. In the community, I find insights on the team that I cannot get elsewhere. I do not know any of the participants, but I find them very knowledgeable, even if I do not agree with each perspective. Additionally, the blog eliminates those who cannot participate respectfully, making it a pleasurable community. And finally, there is a substantial activity with up to a thousand comments on any given day. These elements combined have made me a more committed and loyal fan, even considering the disappointing losing record for the Nationals in the past seasons.

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[1] Fei-Fei Chenga, Chin-Shan Wub,*, Yi-Chieh Chena, “Creating Customer Loyalty in Online Brand Communities.”

 

Insert Your Name Here

For awhile now I have been writing about the integration of the membership marketing concept into the world of retailing, insurance, and fundraising.

The press release that I came across today is another example: “Sep 01, 2008 -- Sam's Club, the wholesale division of Wal-Mart Stores, has promoted Cindy Davis to executive vice president of membership, marketing and e-commerce. . . Most recently, Ms Davis was responsible for membership and marketing and has led the organization to achieve several successes, said Wal-Mart.”

Many of us could drop our name in here as it relates to responsibilities and achievements. It has been interesting for me to note that of the hundreds of subscribers to this blog, an increasing number are from for-profit organizations.

I am convinced that there are important lessons to be learned and shared by both the for-profit and the non-profit practitioners of membership marketing. Do you have any thoughts on this?

What is my Career? Membership Development is Relationship Marketing

Do you work in membership development, membership retention, or membership marketing? If you do, you may have trouble explaining what you do to others, including prospective employers outside the non-profit or association fields.

I believe the answer to the question, “what is my career?” is that you are a professional engaged in “relationship marketing”.

The textbook description of relationship marketing from Philip Kotler follows.

“Relationship marketing has the aim of building long-term mutually satisfying relations with key parties – customers, suppliers, distributors – in order to earn and retain their long-term preference and business . . . The ultimate outcome of relationship marketing is the building of a unique company asset called a marketing network. A marketing network consists of the company and its supporting stakeholders (customers, employees, suppliers, distributors, retailers, ad agencies, university scientists, and others) . . . The operating principle is simple: Build an effective network of relationship with key stakeholders, and profits will follow.”[1]

If that sounds familiar it is because that is what we do.

Kotler goes on to describe the progression in relationship marketing as moving people through eight stages of relationship starting with “Suspects” and moving to “Partners”.[2] Here are his stages.

• Suspects
• Prospects
• First Time Buyers
• Repeat Customers
• Clients
• Members
• Advocates
• Partners

All of these stages have relevance in membership development. However, in membership we tend to shorten the cycle and bring people into the membership relationship sooner. The relational marketing progression that I have recommended to use for associations is pictured below. You can read about it in my post titled, Five Phases of the Membership Life Cycle.

Here is the bottom line. If you are involved in membership marketing, you have a very valuable and transferable skill. You have developed hands on experience of establishing, building, upgrading, and retaining a customer. You are a relationship marketer.

[1] Philip Kotler, Marketing Management, Prentice Hall, page 13.
[2] Philip Kotler, Marketing Management, Prentice Hall, page 50.

Sensible Branding

I have to confess something. I have developed negative feelings toward “branding”. Here’s why. With some associations, branding has become an excuse to return to the deadly practice of “if you build it they will come”.

The branding process can stop pro-active marketing in its tracks or can become the end instead of the means to communicating with members and prospects.

After all, who wouldn’t rather spend time focusing on all of their attributes and what members and non-members “really” think about them instead of selling.

It reminds me of the humorous saying: “Enough about me talking about me. What do you think about me?”

But flying back from The Great Ideas Conference and catching up on my reading I was greatly encouraged to read an article that presented a very sensible and smart perspective on branding.

The article appeared in the December issue of Associations Now and was written by one of keynote speakers at Great Ideas Conference, Bruce Turkel.

Turkel defined branding this way, “A brand is not a name, a logo, or a masthead. A brand is the promise of a relationship—the relationship that you build with your customers when they agree to do business with you (page 28).” In many cases, the brand can be described in just a word or two.

He goes on to emphasize that of course you must deliver a top notch product as a baseline for success, but beyond having top products “the most important thing you have to do is to make your customers feel good about the time and money they spend [with you].”

Furthermore, he says, “In order to keep your brand vital to your members, your organization has to be the cauldron where the great new ideas are always bubbling. Like the mama bird catching fat worms to drop into the waiting mouths of her hungry hatchlings, it’s your job to search the world for the best practices and bring them back to your members, often before they even realize they need what you’re offering (page 29).”

Essentially, Turkel is describing great, innovative products and experiential customer service.

But here is the part where some organizations fail and where I think Turkel get’s it right. He emphasizes that once you have a brand, “You must constantly and consistently communicate your brand value. Only a constant message will break through the clutter of all the communicators trying to get your target’s attention. And only a consistent message will present your message reliably enough to stick. Ironically, this doesn’t give you license to be repetitive. Instead you have to regularly refresh your message so it doesn’t bore the very people you’re trying to excite.”

He has it right. A brand does not magically make the world come to your door. Instead, it is the foundation from which to market. Once you have a sense of the promise you can make to your members and prospects in products and experience, you need to aggressively take it onto the street, test it, adjust it, and frequently communicate it.

Ultimately it is not your brand that funds your mission. It is the dues and member purchases that allow you to fulfill your purpose.

What do you think?

Corporations Coop Membership Marketing

Is your next job likely to be the membership director for a corporation?

I ask this question, because last week I received two interesting calls seeking membership consulting services. The first was from a credit union that wanted to recruit more members.

Okay, that made sense.

However, the second call was from a web news broadcasting company that is signing up hundreds of “members” who pay dues of $10 each month.

To top it off that night I went home and received a mailing from clothier Joseph Banks telling me of the upcoming “Corporate Member” sale.

Of course, I am already a member of Costco and American Express.

Clearly the corporate world is increasingly tapping into the membership concept to support customer relationship marketing efforts. They understand that people want to feel like they belong and they are special.

If you think I am overstating the case, take a look at some quotes from an article by David Frey entitled: Membership Marketing: Turning Occasional Buyers into Loyal Customers. He believes that

“Every business can benefit from a membership program and should establish some form of membership marketing.”

He goes on to explain:

“Membership programs provide powerful benefits that will improve your company’s performance. Let’s take a closer look at the benefits that were just mentioned.

1. Conserves limited company resources – Resources are allocated according to the customers’ level of membership (i.e. lower membership level = less resources, higher membership level = more resources).

2. Increases customer loyalty – Membership provides a sense of belonging to an organization, which breeds loyalty.

3. Provides a predictable stream of revenue – Instead of sporadically selling products and services, membership programs provide a steady stream of customers providing a steady stream of cash flow.

4. Sells more services and products with less effort – Because slow moving or less desirable products and services are included in membership packages people are more likely to take advantage of them.

5. More revenue from existing customers – Multi-level membership programs incentivize customers to spend more by moving up to higher levels of the program.

6. Improves referral business – People like to tell their friends about a company to which they feel a sense of loyalty.”

Frey’s article is very good. It sounds like it could have been written for association in Association Now. But it is directed at corporate marketers.

If you would like to see the entire piece, I have provided the link here.

http://www.businessknowhow.com/marketing/membmark.htm

What are your thoughts of the use of the membership model by corporations seeking to strengthen the customer relationship? Feel free to post your thoughts here.