The rise of customer engagement through social media has brought into question the “old” concept of customer loyalty.

The opt-in nature of social media, where customers choose when they want to receive and engage in communications with brands, has begun to overshadow the traditional CRM method of customer loyalty. On a great post over at The Strategy Web, Martin Meyer-Gossner has questioned the future of Customer Loyalty cards. Why should a customer sign up to a card, receive generic mail shots with offers and messaging that isn’t relevant to them? With the exception of a card in their wallet, where is their declaration that they support this brand or service?

Social media allows consumers to control their customer experience with organisations, becoming a fan, follower or friend – how and when they choose to. Does this emotional engagement in this interaction mean more than signing up to a discount card? Or does one click mean less then signing up for a store card? Rather than go down the typical ranting blog post route announcing the old format “dead”, isn’t there a third route?

Social Media is cheap, colloquial and great for macro and micro communications. CRM and loyalty schemes are normally more expensive, take more time but brilliant for targeting specific groups of customers. What we’ll see in the next few years is a combination of the two, where social media is used for broadcast & conversation, whilst CRM and loyalty cards are used to target and reward dedicated customers… who, hopefully, have enjoyed their customer experience so much they feedback through social media becoming brand advocates.

Social media allows consumers to fit brands and services into their lifestreams, rather than just their wallets. The impact of this change is only just beginning to bear fruit, but will be commonplace in the future.

By Colin Shaw | Published: February 16, 2010