Building brand loyalty through social brand action

With more awareness of social responsibility, customers like to be seen to be "doing their bit" when making purchasing decisions. The University of Southampton's James Seligman takes an academic view of how social brand action can build brand capital.

By James Seligman, University of Southampton

Consumers are seeing the financial services industry reflect a past of greed and lack of governance to the point of public money bail outs, thousands of people losing their homes and jobs and a global credit crisis. Link this to the growth of the internet and explosive growth in people's access to 'knowledge' and you have a backdrop of change in how organisations are integrating social value propositions into their brand values.

The link goes even further. The public is also more aware of the environment and going green. Green products or services, although considered with a touch of cynicism by consumers, do not take away the fact that people want to do something to help our neglected planet.

Social brand capital is not a new idea, in fact companies like clothing firm Patagonia and Body Shop embraced CSR in their products and communication 20 years ago, with most companies today focused on issues that effect our social and cultural well being. Corporations are much more aware of their carbon footprint and the need to use responsible ingredients and packaging. In fact, many companies in their annual reports and websites identify their activity on social brand responsibility.

This phenomena of social consciousness is now expanding as customers seek out products and services that make them feel they are "doing their bit" for the environment and being socially good citizens. The change is fuelling a new greener approach in brand marketing and the developing a greener feel and look for a brand purchase beyond price.

Social brand capital

Most marketers would accept that branding today is about creating and building value–centric brands to show leadership in social responsibility well beyond how brands define themselves in terms of their functionality and image. Some well-known brands that use social brand capital include:

• Virgin Airlines: Greener planes.

• Virgin Trains: Greener trains that go further on a litre of oil.

• Coca–Cola: Investments in recycling.

• Starbucks: Using Fair Trade coffee.

• Body Shop: Ethical beauty porduct ingredients.

• Marks and Spencer: Recycling policy on shopping bags.

• Fed Ex: Low emission delivery vehicles.

Although a wide range of industries use social brand capital to build brand values and loyalty, these companies have created a brand value dimension which consumers see as part of their needs and wants. Here is the point: Social brand action builds brand capital through providing a meaningful in-built benefit through commitment to social and environmental issues.

However be warned, the public is sceptical, so if you make a claim about a product or service using social brand capital, make sure it is real. Consumers are smart and aware, and can see a fake a mile away. It takes time and investment to build a sincere social brand which is believed by all stakeholders and requires complete company commitment from the top down.

Those organisations who do walk down the social brand action road will find some quality brand value rewards as it can create a competitive differentiation, build a relevant and more authentic long term brand positioning in a crowded and competitive market. Another trend is also appearing in that new media is spawning a new wave of how consumers go about satisfying their needs and wants. The days of one way communication are over, the digital age has created the development of two-way exchange between the customer and the company, be a product or service.

However, this new technology has created new forms of communication such as bloggs, wikis, forums and chat rooms, where consumers can debate, discuss, and analyse products and services with other members of the public, with no communication from the brand owner. These social sites will grow in the future as consumers debate their experiences with brand X or Y openly with potential buyers. Consider the influence one person who has had a great or bad experience with a product or service could have on a social forum chat site on any brand you care to mention.

With hundreds of online participants eagerly listening and watching – real people and real experiences, not packaged communication from a company - it is not about selling or marketing any more; it is a social brand debate, which will determine a buyer's attitude and opinion of a brand. Smart marketers will encourage the use and application of a brand chat room, which it can sponsor to try to monitor debate.

Consumers have the power

Another change linked to social branding is the growth of the customer experience. The public are looking for service and satisfaction in different ways, so firms are not selling a car, soft drink, washing machine, etc. anymore. They are providing a customer experience from the moment the need and want has been recognised to well beyond the actual purchase. Along with this experience is the knowledge in the customer's mind that they have acquired a greener car or a beverage where the container is recycled, or perhaps a washing machine that uses less power and cleans well at lower temperatures.

These converging trends have created an environment where responsible organisations are starting to take notice of social brand action, which is satisfying a customer need and attracting new customers who are looking for brands which have a social responsibility agenda which is authentic.

In addition, with a slower economy the brand battle becomes more fierce - a brand which can find an extra differentiator such as social values can tip the purchase scales in its direction. Social brand action in building brand loyalty will emerge which goes beyond CSR and into the values we have in our brands and channels of communication.

James Seligman is senior fellow marketing at the School of Management, University of Southampton