Relationship marketing in social media jonsson
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  • 1.   Lund  University   Internet  Marketing,  Branding  and  Consumers   2012-­‐02-­‐28                             Relationship  Marketing  and     Loyalty  in  Social  Media     A  Comparison  Between  Three  Swedish  Membership  Clubs       Author   Caroline  Jonsson  880101                                         Word  Count  Excluding  References:  2996  
  • 2. Table  of  Contents  Introduction  ...........................................................................................................  3  1.1  Background  ...................................................................................................................................................  3  1.2  Problem  Discussion  ...................................................................................................................................  3  1.3  Research  Question  .....................................................................................................................................  4  1.4  Purpose  ...........................................................................................................................................................  4  Theoretical  Framework  ..........................................................................................  5  2.1  Loyalty  and  Membership  Clubs  ............................................................................................................  5   ................................................................................................................  5  2.2  Relationships  in  Social  Media  2.3  Framework  Online  Relationship  Management  ..............................................................................  6  Empirics  and  Analysis  .............................................................................................  8   .................................................................................................................................  8  3.1  Selection  of  Empirics  3.2  Activities  and  Analysis  .............................................................................................................................  8  Conclusion   ............................................................................................................  11   Limitations  and  Further  Research  ...........................................................................................................  11  References  ...........................................................................................................  12  Appendix  1-­‐  Membership  Club  Activities  ..............................................................  14  P1:  Links  to  other  Social  Medias  in  Individual  Membership  Newsletter  .................................  14  P2:  KappAhl  Real-­‐time  Chat  on  Facebook  Page  ..................................................................................  14  P3:  “My  Info”-­‐  Individual  Data  Offered  by  Lindex  in  Membership  Newsletter  .....................  15  Appendix  2-­‐  H&M  Facebook  Activities  ..................................................................  16  P1:  Standard  H&M  Collage  Presenting  Products  and  Encouraging  Interaction  ...................  16  P2:  Standard  H&M  Collage  Presenting  Products  and  Encouraging  Interaction  with  Numbered  Pictures  .........................................................................................................................................  17  P3:  H&M  Interactive  Questions  Revealing  Customer  Preferences  .............................................  18  P4:  Discussed  H&M  Advertisement  on  their  Facebook  Page  ........................................................  18  Appendix  3  –  Lindex  Facebook  Activities  ..............................................................  19  P1:  Standard  Lindex  Collage  Presenting  Products  Lacking  Interaction  Possibilities  ........  19  Appendix  4:  KappAhl  Facebook  Activities  .............................................................  20  P1:  Standard  KappAhl  Collage  Presenting  Products  with  Limited  Interaction  Encouragement  .................................................................................................................................................  20                           2  
  • 3. 1  Introduction  _____________________________________________________________________________________________  1.1  Background  Market   orientation   is   a   widely   researched   area   (Slater   and   Narver,   1994;   Kohli  and  Jaworski,  1990;  Javalgi,  Martin  and  Young,  2006).  Existing  research  suggest  different  components  to  be  included  in  order  for  a  business  to  become  market-­‐oriented,   the   importance   of   being   customer-­‐oriented   is   however   stressed   by  several  researchers  (Slater  and  Narver,  1994;  Kohli  and  Jaworski,  1990;  Javalgi,  Martin   and   Young,   2006).   To   become   customer   oriented   it   is   fundamental   that  companies   adapt   their   activities   to   customers   ever-­‐changing   expectations.   By  making  continuous  data  gathering  of  customer  preferences,  the  company  is  able  to   distinguish   what   aspects   that   will   enhance   customer   satisfaction   (Slater   and  Narver,  1994).  If  the  company  succeeds  in  meeting  these  requests,  the  customer  will   receive   superior   value,   which   increases   the   chances   for   that   customer   to  become  loyal  (Kohli  and  Jaworski,  1990).      To   create   customer   value   and   thereby   prospects   for   loyal   customers,   emphasis  has   traditionally   been   putted   on   involving   customers   before   and   after   sales  (Slater   and   Narver,   1994).   This   resulted   in   relationship   formation   between  company   and   customer   and   customer   relationship   management   (CRM)   has  thereafter  become  a  frequently  centralized  business  activity  (Javalgi,  Martin  and  Young,   2006).   The   common   idea   of   a   relationship   is   that   it   should   be   built   on  trust   and   information   sharing   and   will,   if   successfully   managed,   benefit   both  parties   (Dowling,   2002).   One   way   of   reaching   this   type   of   exchanging  relationship  in  the  B2C  context  has  been  to  create  loyalty  programmes,  which  is  especially   common   in   the   retail   industry   (Dowling,   2002;   Leenheer,   Heerde,  Bijmolt,   Smidts,   2007).   Membership   or   customer   clubs   are   a   type   of   loyalty  programme,   which   according   to   Liebermann   (1999)   offers   great   prospects   for  creating  long  lasting  customer  relationships.    1.2  Problem  Discussion  Today,   when   the   majority   of   customers   are   found   online,   the   prospects   for   being  customer-­‐oriented   and   building   relationships   has   changed.   Customers  increasingly   have   access   to   online   information   and   thereby   they   come   across  more   value   propositions   than   before.   Pires,   Stanton   and   Rita   (2006)   argue   that  this   makes   customers   empowered,   since   they   easily   can   switch   to   the   supplier  who   offers   the   best   value   proposition.   This   implies   that   the   value   creational  process   is   becoming   increasingly   fundamental,   since   it   is   harder   to   maintain  customer  relationships  in  an  online  climate.  (Pires,  Stanton  and  Rita,  2006)       3  
  • 4. Considering   that   a   main   focus   in   a   traditional   customer-­‐oriented   approach   has  been  to  collect  consumer  input  for  creating  value,  social  media  platforms  seem  to  offer   facilitating   opportunities   for   companies   (Slater   and   Narver,   1994).   Since  both   consumer   and   seller   are   present   at   the   same   platforms,   interaction   is   eased  and  can  be  done  in  real-­‐  time  (Scott,  2011:3-­‐13).  This  accelerates  the  process  of  receiving   customer   complaints   and   ideas,   which   in   turn   facilitates   value   creation  (Gupta,  Armstrong  and  Clayton,  2011).      Gupta,   et   al.,   (2011)   argues   that   companies   cannot   overlook   the   impact   that  social   media   has   today   and   that   it   is   vital   to   engage   customers   online.   This  argumentation,  combined  with  the  increased  emphasis  putted  on  customer  value  creation,   implies   that   traditional   offline   relationship   building   is   no   longer  enough.   On   this   note   it   seems   interesting   to   study   company   efforts   that  previously   has   been   sufficient   for   creating   relationships   and   loyalty,   but   that  need  to  embrace  the  new  rules  of  marketing  to  survive  today.      In   the   context   of   loyalty   programmes   and   membership   clubs,   the   discussion  above   implies   that   traditional   offerings   such   as   discounts   and   bonuses   are   no  longer   sufficient   to   stimulate   customers’   value   preferences   (Liebermann,   1999;  Chernatony,   2001).   It   seems   preferable   to   study   how   a   previously   offline  operating   membership   club   are   grasping   the   opportunities,   which   are   offered  through  social  media,  to  create  on-­‐going  superior  customer  value  (Armelini  and  Villanueva   2011;   Keitzmann,   Hermkens,   McCarthy   and   Silvestre,   2011;  Chernatony   2001;   Bernoff   and   Li,   2008).   Due   to   the   discussion   above,   it   is  reasonable  that  companies,  who  are  not  using  social  media  platforms  to  enhance  club  member  relationships,  are  facing  a  risk  of  being  left  behind  in  competition.    1.3  Research  Question  The  discussion  leads  to  the  following  question:  What  membership  club  offerings  and   activities,   made   by   a   company   that   previously   has   been   using   an   offline  loyalty   programme,   seems   more   efficient   when   trying   to   create   customer  relationships  through  social  media?  1.4  Purpose  The  purpose  of  this  paper  is  to  compare  membership  club  activities  performed  by   three   companies   in   the   clothing   industry   and   analyse   how   they   manage   to  integrate   usage   of   social   media   platforms   in   their   loyalty   programme.   By   doing  that   an   understanding   for   which   activities   that   seem   most   efficient   for   managing  customer   relationships   online   will   be   gained.   The   findings   offer   a   possible  contribution   to   online   relationship   marketing   theory,   which   can   be   used   by  marketing   strategists   that   aim   to   create   long   lasting   relationships   through   an  online  membership  club.         4  
  • 5. 2  Theoretical  Framework  _____________________________________________________________________________________________  2.1  Loyalty  and  Membership  Clubs  A  strategic  way  to  foster  relationships  with  customers,  in  order  to  build  loyalty,  is   to   implement   membership   clubs   where   both   customer   and   company   benefit  from   interacting   with   each   other   (Stauss,   Chojnacki,   Decker   and   Hoffmann,  2001).   A   membership   club   usually   operates   by   issuing   membership   cards,  sending   out   newsletters   and   offering   discounts   and   gifts   (Liebermann,   1999).  Liebermann   (1999)   states   that   the   purpose   of   membership   clubs   is   to   enhance  loyalty   and   he   finds   3   effects   to   have   a   particularly   positive   effect   on   loyalty:   if  the  customer  are  a  member  in  a  single  membership  club,  if  he  or  she  is  joining  by  own   incentive,   and   if   the   customer   is   participating   in   club   activities.   Leenheer,   et  al.,  (2007)  are  agreeing  that  the  effect  of  a  loyalty  program  diminishes  the  more  competitive  loyalty  programs  a  customer  is  a  member  of.  To  create  a  successful  loyalty   program   it   is   suggested   that   the   design,   customer   profile   and   “soft  benefits”   should   be   focused   upon.   The   loyalty   program   design   includes  consideration   of   direct   or   delayed   rewards   and   how   these   should   be   balanced  (Leenheer,  et  al.,  2007).  Another  important  aspect  to  nurture  loyalty  is  to  create  benefits   that   are   not   financial   related,   which   is   done   by   continuously   creating  original   ideas   to   amuse   and   entertain   members.   These   ideas   should   be   cost  effective  but  at  the  same  time  benefit  non-­‐economic  customer  value  (Leenheer,  et  al.,  2007).  Stauss,  et  al.,  (2001)  distinguishes  a  correlation  between  interaction  and  knowledge,  implying  that  the  more  interaction  there  is,  the  more  customer  knowledge  the  company  receives.  To  use  the  membership  club  as  an  interactive  platform,   during   the   entire   customer   life   cycle,   will   therefore   deliver   valuable  input   regarding   preferences,   which   enhances   the   chances   to   create   customer  relationship  satisfaction  (Stauss,  et  al.,  2001).  2.2  Relationships  in  Social  Media  Social   media   platforms   have   changed   the   culture   of   customer   behaviour   and  have   resulted   in   enhanced   customer   power   (Bernoff   and   Li,   2008).   Customers  are   no   longer   passively   absorbing   value   propositions   from   a   brand   manager  rather  they  are  actively  forming  own  brand  values  online  (Bernoff  and  Li,  2008;  Chernatony,  2001;  Keitzmann,  et  al.,  2011).  This  increase  pressure  on  companies  ability  to  absorb  and  adapt  to  meet  customer  demand  (Bernoff  and  Li,  2008).    It   seems   like   the   old   marketing   procedures   cannot   be   directly   translated   to  online   medias   and   Chernatony   (2001)   for   example,   argue   that   maintenance   of  loyalty  online  is  not  the  same  as  offline.  In  online  loyalty  schemes  the  manager  has   to   acknowledge   that   a   customer   interacts   with   both   a   brand   and   a     5  
  • 6. community   and   that   brand   connection   and   repeated   visits,   are   usually   a   result  derived   from   the   customer   bond   with   the   community   rather   than   the   brand  (Chernatony,   2001).   Therefor   offline   incentives   in   loyalty   programmes   are   not  enough   as   value   propositions,   when   it   comes   to   creating   loyalty   online  (Chernatony,  2001).      To   be   able   to   create   relationships   online   Keitzmann,   et   al.,   (2011)   states   that   the  online  community  has  to  encourage  it.  Relationships  online  are  distinguished  by  conversation   and   interaction   between   users   and   different   content   is   needed  depending   on   the   relationship   objective   (Keitzmann,   et.   al.,   2011).   If   the   purpose  is   to   maintain   customer   relationships   less   effort   is   needed   than   if   the   company  aims   to   enhance   the   relationship   (Keitzmann,   et.   al.,   2011).   Overall,   a   strong  relationship   is   characterized   by   being   long-­‐term   and   involving,   which   implies  that   companies   have   to   devote   time   and   commitment   to   be   successful   in   social  media   (Armelini   and   Villanueva,   2011).   Armelini   and   Villanueva   (2011)   mean  that   a   corporate   Facebook   page   is   not   a   place   to   communicate   one-­‐way  communication,   but   rather   a   place   to   practice   interaction   with   customers.  Keitzmann,  et  al.,  (2011),  are  agreeing  that  Facebook  is  a  social  media  platform  well-­‐fitted  for  nurturing  and  creating  relationships.        2.3  Framework  Online  Relationship  Management  Social   media   is   a   relationship-­‐oriented   media   that   offer   great   prospect   for  building   mutual   value   through   relationships   (Rowley,   2004).   Due   to   the   vide  variety   of   suggestions   available,   regarding   how   to   manage   online   strategies   to  meet  customer  expectations  and  build  online  relationships,  Figure  1  was  made.  The  figure  is  based  on  suggestions  from  existing  research  regarding  how  to  use  social   media   to   maintain   customer   oriented   during   changed   power   between  customer  and  company  (Armelini  and  Villanueva  2011;  Keitzmann,  et  al.,  2011;  Chernatony  2001;  Bernoff  and  Li,  2008;  Weinberg  and  Pehlivan,  2011).      Even   though   there   is   no   particular   order   among   the   relationship   managing  activities  compiled  in  Figure  1,    “Make  Room  for  Conversation”  is  recognized  to  be  an  overall  inception  in  this  framework  since  consumers  need  to  be  informed  about  different  communities  in  order  to  find  them  (Keitzmann,  et  al.,  2011).  By  creating  communities  where  interaction  is  encouraged,  conversations  are  more  likely   to   arise   (Chernatony,   2001).   If   the   company   continuously   track   and   listens  to   what   customers   are   saying,   managers   can   learn   and   get   ideas   on   how   to  improve   business   and   offerings   (Bernoff   and   Li,   2008;   Chernatony,   2001).   By  making   changes   that   is   preferred   by   customers,   the   company   will   enhance   its  value  offering  (Bernoff  and  Li,  2008;  Chernatony,  2001).  That  both  customer  and  company   are   engaged   is   therefore   fundamental   for   relationship   building  (Weinberg  and  Pehlivan,  2011).  It  might  also  result  in  consumers  recommending  products  to  others,  and  thereby  carry  a  company  brand  message  (Bernoff  and  Li,  2008;   Armelini   and   Villanueva,   2011).   It   is   however   important   that   companies  learn   when   it   is   beneficial   to   join   customer   conversation   online   since   both  advantages   and   risks   are   associated   with   intruding   a   conversation   (Keitzmann,  et   al.,   2011).   To   have   a   support   system,   that   partly   consist   of   a   place   for  consumers   to   turn   for   help   and   information   and   partly   where   employees   track  their   communities   and   reaches   out   for   help   without   customers   having   to   call   e.g.     6  
  • 7. a  support  centre,  is  a  preferable  act  to  facilitate  for  the  customers  (Bernoff  and  Li,  2008).           Make     Room  for     Con-­‐   versation     Track/   Support     Listen                RELATIONSHIP             Learn/   Engage     Get  Ideas             Respond               Figure  1-­‐  How  to  use  social  media  to  create  or  maintain  customer  relationship                     7  
  • 8. 3  Empirics  and  Analysis  _____________________________________________________________________________________________  3.1  Selection  of  Empirics  To   conduct   this   research   three   Swedish   clothing   companies   who   has   established  membership   clubs   was   chosen   (H&M   Webpage,   KappAhl   Webpage,   Lindex  Webpage).   To   only   chose   Swedish   companies   are   based   on   the   idea   that   all  companies’   origin   from   the   same   culture   and   therefore   have   somewhat   similar  prerequisites   for   conducting   membership   clubs   toward   a   Swedish   target  audience.   Due   to   the   length   of   the   study,   Facebook   activity   and   email   offerings  are   focused   upon   in   the   analysis.   Facebook   seem   as   an   appropriate   media   to  investigate,  due  the  relationship  possibilities  that  are  offered  through  the  media  (Armelini   and   Villanueva,   2011;   Keitzmann,   et   al.,   2011).   Email   offerings   seem  relevant   to   investigate   since   they   might   distinguish   individual   relationship  building  activities  that  are  only  accessed  by  club  members.      The  chosen  companies  are:  H&M,  Lindex  and  KappAhl.  Corporate  Facebook  page  activity   and   email   communication   performed   by   these   companies   has   been  mapped  for  two  weeks  between  2012-­‐02-­‐10  and  2012-­‐02-­‐23.  To  receive  the  best  apprehension   possible,   regarding   relationship   management   with   members,   a  membership  in  all  three  clubs  has  been  started.  The  most  relevant,  diverse  and/  or   interesting   aspects,   which   distinguishes   differences   in   social   media  integration  of  a  loyalty  programme  and  relationship  building  in  social  media,  will  be  presented  in  the  analysis  below.    3.2  Activities  and  Analysis  To  provide  linkages  between  different  platforms  and  communities  are  a  way  to  create  interaction  and  conversation  (Keitzmann  et  al,  2011).  All  three  companies  are   trying   to   increase   interaction   by   integrating   Facebook,   YouTube   and   Blog  links,   in   the   end   of   every   membership   club   newsletter   (Appendix   1-­‐P1).   To  provide   a   link   to   other   medias   are   facilitating   for   the   customer   to   reach   the  company   and   develop   a   bond   with   the   community,   which   is   beneficial   when  trying  to  achieve  loyalty  online  (Chernatony,  2001).    To   offer   real-­‐time   chat   with   KappAhl’s   collection   chief   on   Facebook   is   another  attempt   to   create   interaction   (Appendix   1-­‐P2).   This   is   regarded   as   an   engaging  online  activity  where  two-­‐way  conversations  can  be  performed.  To  use  Facebook  in   this   manner   is,   according   to   Armelini   and   Villanueva   (2011),   promising   for  creating   relationships   online.   It   can   also   benefit   both   customer   (who   receives  answers  to  its  questions)  and  company  (who  discover  what  trends  or  aspects  of  business  that  customers  are  interested  in).     8  
  • 9.  An   activity   to   inform   and   facilitate   customer   efforts   is   the   column   “My   Info”  which  is  present  in  all  KappAhls  membership  newsletter  dispatches  (Appendix  1-­‐P3).  Here,  individual  membership  data,  how  many  credits  one  have  collected  and  how   many   credits   you   need   to   receive   a   bonus   check,   is   presented.   This   is   an  offering  that  informs  customers  without  the  customer  having  to  make  an  effort,  and   therefore   it   can   be   perceived   as   a   type   of   support   system   (Bernoff   and   Li,  2008).    Focusing  on  online  relationship  management  through  Facebook,  interesting  and  diverse   interaction   styles   performed   by   the   three   companies   have   been  discovered.   Starting   with   H&M,   almost   every   day   a   post   following   the   same  structure   is   uploaded   (Appendix   2-­‐P1).   Firstly   a   trend   is   defined   e.g.   “Bright  Colour”,  “Pink”  or  “Blouses”.  After  the  trend  a  question  similar  to  “Which  one  is  your   favourite   this   spring?”   is   stated   referring   to   pictures   incorporated   below  the  text.  This  type  of  post  is  engaging  since  it  encourages  Facebook  followers  to  give   their   opinion.   It   is   an   easy   way  for   customers   to   express   their   preferences  and   occasionally   the   different   pictures   are   numbered   which   is   increasingly  facilitating  (Appendix  2-­‐P2).   By   allowing   customers   to   share   their   thoughts,   H&M  discovers  what  is  popular  and  what  to  focus  on  for  satisfying  customers.  If  H&M  succeeds   in   embracing   customer   comments   and   ideas,   they   will   increase  customer   value,   which   is   beneficial   for   creating   relationships   (Bernoff   and   Li,  2008;  Chernatony,  2001).    In  that  case,  their  interaction  style  will  create  mutual  benefits  and  it  can  be  implied  that  social  media  opportunities  are  used  efficiently  (Rowley,   2004).   Another   example   illustrating   H&M’s   effort   to   create   mutual  exchange   is   posted   questions   such   as   “What   is   the   first   sign   of   spring?”   By  mapping   the   answers   H&M   distinguishes   what   customers   want   and   what   they  should  focus  on  promoting  in  early  spring.  On  the  other  hand,  customers  will  find  that  the  items  they  preferred  are  available  in  stores  at  the  right  time  (Appendix  2-­‐P3).    Continuing,   Lindex   are   creating   posts   such   as   “Get   the   Friday   Look”   which   is   a  picture   montage   usually   containing   four   clothing   pieces.   First   a   trend   e.g.    “Colour”   is   stated   followed   by   some   informative   sentences   about   the   garments  presented   in   the   collage   (Appendix  3-­‐P1).   Lindex   does   not   end   with   a   question,  which   in   comparison   to   H&M,   implies   that   there   are   interacting   opportunities  that   are   not   used   efficiently.   Even   though   customers   have   the   freedom   of  commenting   and   deliver   opinions   about   the   clothes   in   the   comment   field,  consumers   might   only   respond   to   the   post   if   they   are   distinctively   influenced  positive   or   negative   by   the   post.   Engagement   from   the   masses   is   not   encouraged  through   this   interaction   style   and   opinions   about   customer   preferences   between  different   garments   are   not   revealed.   Since   the   more   interaction   implies   the  better   customer   knowledge,   Lindex   might   be   missing   out   on   information   leading  to  better  customer  understanding  (Stauss,  et  al.,  2001).  To  upload  posts  that  are  not  inviting  customers  to  participate  might  be  compared  to  sending  out  one-­‐way  communication   messages,   which   is   not   the   right   type   of   activity   to   perform   on  Facebook   (Armelini   and   Villanueva,   2011).   This   implies   that   opportunity   for  creating  superior  value  is  not  efficiently  used,  which  in  that  case  result  in  missed  prospects  for  enhancing  customer  relationships.       9  
  • 10.  KappAhl   seem   to   use   a   combination   between   H&M’s   and   Lindex’s   way   of  communicate  on  Facebook.  Similar  to  the  other  two  companies  they  state  a  trend  such  as  “Pastels”  and  then  they  occasionally  end  with  a  question  such  as:  “How  do  you  feel  about  it?”  (Appendix   4-­‐P1).    To  end  a  Facebook  post  with  a  question  can  be,  as  discussed  above,  encouraging  and  inviting  to  customer  conversation.  KappAhl’s   question   however,   in   comparison   to   H&M’s,   is   more   diffuse   and   might  therefore   be   harder   for   the   customer   to   answer.   To   state   a   general   question,  might   also   be   a   sign   of   efficiency   waste,   since   the   question   will   not   reveal  customer   preferences   and   what   customers   need   to   become   satisfied.   In   line   with  the   argument   about   Lindex,   KappAhl   can   be   considered   to   not   use   the  relationship  building  opportunities,  which  are  offered  by  Facebook,  to  its  fullest  (Armelini  and  Villanueva  2011;  Keitzmann,  et  al.,  2011).    All  companies  illustrated  inability  to  respond  to  questions  or  discussions  on  the  Facebook  page.  This  finding  is  interesting  and  can  at  first  thought  be  considered  as   an   obvious   mistake   made   by   the   companies.   It   is   suggested   that   companies  should  listen  and  respond  to  what  customers  are  saying  at  online  communities  and  that  they  should  provide  a  support  system  that  tracks  and  help  customers  in  need   (Bernoff   and   Li,   2008;   Chernatony,   2001).   This   implies   that   customer  questions  or  problems  should  be  answered  to.  Companies  must  however  decide  when  it  is  beneficial,  and  not  risky,  to  join  an  online  discussion  (Keitzmann,  et  al.,  2011).   One   example   when   H&M   did   not   intrude   a   conversation   was   when   a  model   in   an   underwear   advertisement   is   claimed   for   being   retouched   by   a  customer  (Appendix  2-­‐P4).  It  is  debatable  whether  this  had  positive  or  negative  impact   on   H&M’s   customer   relationships.   To   engage   in   the   conversation   might  have  prevented  some  customers  to  loose  trust  in  H&M  it  might  also  have  led  to  H&M   interrupting   customers   at   the   wrong   time.   It   seems   hard   to   determine  when   it   is   right   to   join   a   customer   conversation,   but   to   give   answers   to   direct  questions   will   most   definitely   enhance   long-­‐term   relationships,   since   it   is  fundamental  to  commit  to  customers  online  (Armelini  and  Villanueva,  2011).                               10  
  • 11. 4  Conclusion  _____________________________________________________________________________________________  This   study   finds   that   loyalty   programme   efforts,   up   until   today   are   not  dramatically   different   from   offerings   and   activities   promoted   offline  (Liebermann,   1999).   Overall,   the   three   companies   were   performing   similar  membership   club   activities   where   online   loyalty   programs   are   incorporating  social   media   to   an   extent   that   Facebook   pages,   events,   YouTube   and   blog   posts  are   presented   in   the   newsletter   received   by   email.   Therefore   the   online   loyalty  programme  in  itself  is  not  regarded  as  relationship  building,  but  rather  it  seems  like  relationships  are  created  through  other  social  media  platforms.  To  link  and  refer  to  e.g.  the  corporate  Facebook  page  in  individual  membership  newsletters  is  therefor  seen  as  a  way  to  guide  the  members  to  online  platforms  that  are  more  successful  for  creating  or  maintaining  relationships.    Having   generated   club   members   e.g.   to   a   Facebook   page,   this   study   suggests   that  some   activities   are   more   efficient   for   maintaining   customer   relationships.  Engagement  is  considered  to  be  a  relationship  building  block  that  is  fundamental  to   strive   for   in   all   relational   managing   activities.   The   company   that   achieves   to  create   engagement   at   an   online   community   will   also   have   a   better   chance   for  maintaining   loyal   customer   relationships   (Chernatony,   2001).   Different  interaction  styles,  e.g.  how  Facebook  posts  are  formatted,  is  suggested  to  result  in   different   levels   of   engagement.   Posts   that   encourage   interaction   and   that  makes   it   easy   for   customers   to   reply   and   participate,   seem   to   be   beneficial   for  creating   engagement   and   thereby   online   relationships.   By   tracking   what  customers  are  saying  online,  the  increased  customer  power  can  be  used  as  a  tool  for   gaining   insights   to   enhance   customer   value   (Bernoff   and   Li,   2008;  Chernatony,  2001).    Limitations  and  Further  Research  It  is  important  to  recognize  that  this  has  been  a  preliminary  study  that  has  been  based   on   three   limited   case   studies.   Customer   insights,   regarding   customers’  interpretation   and   perception   of   company   membership   offerings   and  relationship  building  activities,  have  not  been  included.  Evidence  supporting  that  these   different   activities   have   enhanced   relationships   and   created   loyalty   is  therefore  missing  which  results  in  low  reliability  for  the  study.  Future  research  should   aim   to   explore   membership   clubs   online   more   extensively   and   which  prospects   the   membership   club   in   itself,   offer   in   terms   of   relationship   building  online.         11  
  • 12. References    Armelini,   G.,   and   Villanueva,   J.,   (2011).   ”Adding   social   media   to   the   marketing  mix”,  IESE  insight.  HBR  library  on-­‐line      Bernoff,   J.,   and   Li,   C.,   (2008).   “Harnessing   the   power   of   the   Oh-­‐So-­‐Social   Web”,  MIT  Sloan  Management  Review,  49(3),  pp.  36-­‐42.    De   Chernatony.   L.,   (2001).   “Succeeding   with   brands   on   the   internet”,   Journal  of  Brand  Management,  8(3),  pp.  186-­‐95.    Dowling,  G.,  (2002)  “Customer  Relationship  Management:  In  B2C  Markets,  Often  Less  is  More”,  California  Management  Review,  44(3),  pp.  87-­‐104    Gupta,  S.,  Armstrong,  K.,  and  Clayton,  Z.,  (2011).  “Social  Media”,  HBR  library  on-­‐line    H&M  Webpage.  H&M  in  brief.  [Online]  Available  at:  <  http://about.hm.com/content/hm/AboutSection/en/About/Facts-­‐About-­‐HM.html#cm-­‐footer>  [Accessed  8  February  2012]    Javalgi,  R.G.,  Martin,  C.L.,  and  Young,  R.B.,  (2006)  “Marketing  research,  market  orientation  and  customer  relationship  management:  a  framework  and  implications  for  service  providers”,  Journal  of  Services  Marketing,  20(1),  pp.  12-­‐23.    KappAhl  Webpage.  60  år  av  mode.  [Online]  Available  at:  <http://www.kappahl.com/corp/Om-­‐KappAhl1/Om-­‐KappAhl/Historik/>  [Accessed  8  February  2012]    Keitzmann,   J.H.,   Hermkens,   K.,   McCarthy,   I.P.,   and   Silvestre,   B.S.,   (2011).   “Social  media?   Get   serious!   Understanding   the   functional   building   blocks   of   social  media”,  Business  Horizons,  54,  pp.  241-­‐251.    Kohli,  A.K.,  and  Jaworski  B.J.,  (1990).  “Market  Orientation:  The  Construct,  Research  Propositions,  and  Managerial  Implications”,  The  Journal  of  Marketing,  54(2),  pp.  1-­‐18.    Leenheer,  J.,  Heerde,  H.,  Bijmolt,  T.,  and  Smidts,  A.,  (2007).  “Do  loyalty  programs  really  enhance  behavioral  loyalty?  An  empirical  analysis  accounting  for  self-­‐selecting  members”,  International  Journal  of  Research  in  Marketing,  24(1),  pp.31-­‐47.    Liebermann,  Y.  (1999).  “Membership  clubs  as  a  tool  for  enhancing  buyers  Patronage”,  Journal  of  Business  Research,  45,  pp.  291−297.    Lindex  Webpage.  Lindex  Story.  [online]  Available  at:  <http://www.lindex.com/se/om-­‐lindex/lindex-­‐story/>  [Accessed  8  February  2012]     12  
  • 13.  Pires,   G.D.,   Stanton,   J.,   and   Rita,   P.,   (2006).   “The   internet,   consumer  empowerment   and   marketing   strategies”,   European   Journal   of   Marketing,  40(9/10),  pp.  936-­‐949.    Rowley,   J.,   (2004).   “Just   another   communication   channel?   Marketing  communications   in   e-­‐business”,   Marketing   Intelligence   and   Planning,   22(1),   pp.  24-­‐41.    Scott,  D.M  (2011).  The  New  Rules  of  Marketing  and  PR:  How  to  Use  Social  Media,  Blogs,  News  Releases,  Online  Video,  and  Viral  Marketing  to  Reach  Buyers  Directly.  3rd  ed.  New  Jersey:  John  Wiley&  Sons,  Inc.    Slater,  S.F.,  and  Narver,  J.C.,  (1994).  “Market  orientation,  customer  value,  and  superior  performance”,  Business  Horizons,  37,  pp.  22-­‐8.    Stauss,  B.,  Chojnacki,  K.,  Decker,  A.,  and  Hoffmann,  F.,  (2001).  “Retention  effects  of  a  customer  club”,  International  Journal  of  Service  Industry  Management,  12(1),  pp.  7-­‐19.    Weinberg,   B.D.,   and   Pehlivan,   E.,   (2011).   “Social   spending:   managing   the   social  media  mix”,  Business  Horizons,  54,  pp.  275-­‐282.                                                           13  
  • 14. Appendix  1-­‐  Membership  Club  Activities    P1:  Links  to  other  Social  Medias  in  Individual  Membership  Newsletter                   H&M           KappAhl             Lindex          Source:  Private  email  account,  H&M  2012-­‐02-­‐17,  KappAhl  2012-­‐02-­‐15,  Lindex  2012-­‐02-­‐23    P2:  KappAhl  Real-­‐time  Chat  on  Facebook  Page                                                   14  
  • 15. Source:  KappAhl  Facebook  page  accessed  2012-­‐02-­‐16  (http://www.facebook.com/KappAhl)    P3:  “My  Info”-­‐  Individual  Data  Offered  by  KappAhl  in  Membership  Newsletter                          Source:  Private  email  account,  KappAhl  2012-­‐02-­‐15                                                               15  
  • 16. Appendix  2-­‐  H&M  Facebook  Activities    P1:  Standard  H&M  Collage  Presenting  Products  and  Encouraging  Interaction                                Source:  H&M  Facebook  page  accessed  2012-­‐02-­‐16  (http://www.facebook.com/hm)                                                  Source:  H&M  Facebook  page  accessed  2012-­‐02-­‐15  (http://www.facebook.com/hm)         16  
  • 17.                        Source:  H&M  Facebook  page  accessed  2012-­‐02-­‐13  (http://www.facebook.com/hm)  P2:  Standard  H&M  Collage  Presenting  Products  and  Encouraging  Interaction  with  Numbered  Pictures                                                  Source:  H&M  Facebook  page  accessed  2012-­‐02-­‐15  (http://www.facebook.com/hm)     17  
  • 18. P3:  H&M  Interactive  Questions  Revealing  Customer  Preferences                              Source:  H&M  Facebook  page  accessed  2012-­‐02-­‐14  (http://www.facebook.com/hm)      P4:  Discussed  H&M  Advertisement  on  their  Facebook  Page                                            Source:  H&M  Facebook  page  accessed  2012-­‐02-­‐13  (http://www.facebook.com/hm)             18  
  • 19. Appendix  3  –  Lindex  Facebook  Activities    P1:  Standard  Lindex  Collage  Presenting  Products  Lacking  Interaction  Possibilities                                                  Source:  Lindex  Facebook  page  accessed  2012-­‐02-­‐10  (http://www.facebook.com/Lindex)                               19  
  • 20. Appendix  4:  KappAhl  Facebook  Activities    P1:  Standard  KappAhl  Collage  Presenting  Products  with  Limited  Interaction  Encouragement                                                                    Source:  KappAhl  Facebook  page  accessed  2012-­‐02-­‐22  (http://www.facebook.com/KappAhl)       20