The Power of the Network: Venture Beyond Dialogue Marketing for True Relationships

Marketers have always understood the power of engaging in dialogue with their customers to better understand their needs, wants and desires. But those marketers pushing the boundaries of customer relationships also understand the power of communities of consumers—communities united in affinity for a brand or bound by geography, life stage or lifestyle. Those companies that best leverage the power of these network-building systems will win in the marketplace.

In the loyalty game, facilitating the formation of customer groups bound by shared interests is a way to develop a sense of community around your brand. Communities have always evolved organically, without help from marketing—but today, smart marketers are tinkering with the DNA of their customer base to push outward the boundaries of customer loyalty by harnessing technology and creating social networking opportunities full of unique soft benefits that allow members to connect with one another to share information, share tips and even swap sales leads.

This trend is currently emerging among loyalty programs designed for very specific, niche audiences. Consider these networks:

HP Customer Connection: Hewlett-Packard’s enterprise software division developed the HP Customer Connection program, a web portal-based loyalty program designed for highly technical end-users of HP enterprise software. It has become a thriving customer community where IT managers can share information, attend educational webinars and exchange problem-solving tips.

The value of this network, both to its members and to HP, has increased as the membership has grown and more IT managers are available to share ideas and promote HP software. As the network grows, HP is better able to understand the needs of these end-users and leverage the network to help meet those needs.

British-American Tobacco: In South Africa, United Kingdom-based British-American Tobacco has developed a B2B dialogue-marketing program, called Link Up, which allows convenience store operators and retailers carrying British-American Tobacco products to talk to one another, attend networking events and share information about how to grow and market their businesses.

Harley-Davidson Owners’ Group (HOG): This venerable affinity program, launched in 1983, has long enjoyed the support of one of the most recognizable brands in the world. But the HOG program operators haven’t allowed the program to rest on its laurels. In recent years, they have developed such network-building initiatives as an online portal and virtual workshops to facilitate the sharing of information and associate that dialogue with the corporate brand.

Finance House: Sometimes, networks can form over simple financial incentives. In Dubai, United Arab Emirates, financial services provider Finance House in 2007 launched a cobranded MasterCard with a devilishly simple value proposition: Refer a friend and receive 1 percent of that cardholder’s spend as a cash reward for the life of the cardholder. You can envision a sort of card-based pyramid scheme through which the top of the pyramid is earning lavishly while the bottom attempts to expand through mass referrals. Of course, the cardholder who refers Bill Gates or Warren Buffet is set for life.

Huggies Baby Network program: Coalition Lite programs such as Club Mom build loyalty to mothers of young children and facilitate dialogue between those mothers and complementary brands. The Huggies Baby Network program follows a similar path but is designed to build a community of mothers who support one another through a portal web site that allows them to share information about children and pregnancy. New mothers can design a virtual nursery, access games for their infants to help them learn and receive advice from child-rearing experts and authors. By helping mothers talk to one another about issues they face in their everyday lives, Huggies can enjoy the “halo effect” of promoting this dialogue while leveraging the collected data to ensure more relevant communications to their customers.

Before you launch your network, here are some tips gleaned from these innovators:

1. Know your member base. If your brand serves a member base with highly specialized needs, then enabling members to connect to each other can build value. For a larger organization, you should consider which niche segments within your base you can better serve and which have the most potential value.

Begin by analyzing existing customer behavior patterns. Then research the underlying motivations of customer behavior. Why are your customers switching to the competition? Why did they choose you in the first place? Identify the relevant economic and emotional issues that can form the basis of community growth within your existing loyalty system.

The fundamental rule for marketers still applies in social networking: Just as all customers are not created equal, so are all communities not created equal. Unless united by common interests and relevant dialogue, member communities will wither on the vine. By creating both virtual and tangible environments where like-minded members can assemble and share ideas, and then nurturing these communities so they flourish, loyalty marketers can build a core soft benefit around which their brands can develop a pristine oasis of customer relevance and advocacy.