The retail market is more competitive than ever before and shoppers are looking at more than just price when making a purchase decision. To stand out, companies will need to incorporate reputation-building strategies into their business model that promote brand loyalty from customers.
If done correctly, brand loyalty translates to lasting customer relationships. Moreover, consumers have the perception that a particular brand meets their needs and expectations while identifying with the individual on a personal level.
With this in mind, how can businesses effectively capitalize on existing customers while growing retention rates across the board? User-generated content and the various ways it’s posted is a good place to start.
Brands have recognized user-generated content
As traditional advertising declines in the wake of the digital transformation, user-generated content, or UGC, has the potential to fill in the gap. User-generated content is not created by companies themselves—rather, their customers post pictures, videos, reviews, testimonials, and other media that showcase the retailer’s products.
Embedded in traditional advertising and user-generated content is consumer trust, and both these marketing strategies could not be further apart in this category.
Roughly 84% of consumers don’t trust traditional advertisements and that number continues to climb. Further, UGC is shown to be 50% more trustworthy than traditional marketing.
This is to say that user-generated content uses the word of the crowd to create trustworthy purchasing decisions for consumers. Within the crowd are customer advocates, who are brand ambassadors or regular customers posting about a brand.
These loyal customers can make or break a business in the current retail climate, which is why they’re being taken seriously on prominent social media platforms like Facebook, Twitter, and Instagram.
The success of user-generated content
Reports show roughly 80% of consumers are impacted by user-generated content—a tell-tale sign that UGC is more authentic than other forms of digital marketing. Further, marketing via UGC is shown to be 8.7x more effective than influencer content and 6.6x more influential than company-made branded content.
In fact, the global pandemic has only pushed the success of UGC further. As consumers spend more of their time at home using personal devices, the impact social media images, videos, and messages have on shoppers is far greater than before last Spring. Because of this, brands that place UGC at the heart of their customer experience will be rewarded with meaningful customer connections and heightened retention rates.
Brands will leverage user-generated content
In order to tap into the potential user-generated content has to offer, retailers need to understand where to start when it comes to building brand loyalty. Whether it’s creating a review strategy, loyalty programs, social media pages dedicated to UGC, or FAQs and Case Studies to build community-supported content, retailers have ample options when jumping into the UGC space.
There’s enough evidence to support UGC success across a multitude of marketing initiatives, so building a customer-driven online community across digital platforms has become an essential part of the equation for retailers.
Within a customer-driven online community, members are more than willing to share photos and video testimonials with a brand in exchange for financial compensation or personal recognition. To this degree, consumers are eager to serve as content creators for their preferred brands.
One of the easiest and most effective forms of user-generated content comes in the form of online reviews.
Building a strong review strategy
In a world where 92% of retail consumers read online reviews, a brand’s image on review sites like Google or Yelp cannot be overlooked—particularly for E-commerce businesses. Google, Yelp, and other top platforms are recognized and trusted, in part, because their reviews cannot be edited or deleted by a business written about.
Because of this, every review left on a business is seemingly credible, and therefore, trusted. For a brand, listening to what customers have to say on review sites is a reliable approach to building rapport with customers and delivering what they want.
When brands do an effective job listening to and acting on the reviews written about them, they increase brand loyalty by maximizing the customer experience. For an up-and-coming brand to deliver on their customer’s needs, it’s easier for them to future-proof product developments because they’re communicating with their audience.
Loyalty Programs to build community
Another way to leverage user-generated content is by creating customer loyalty programs. Loyalty programs take a multitude of forms, but tend to benefit the most loyal customers of a brand more than anyone else.
Typically, loyalty programs consist of reward points, coupons, or deals that regular customers won’t receive unless they became a member of the program. This system becomes incredibly useful when brands want to recognize loyal customers and generate interest for new and attractive offers.
When done successfully, loyalty programs help maintain a contract between the retailer and the customer. If the program satisfies the needs of both parties, they are more than willing to listen to each other and provide ample compensation on both ends.
Ideally, this relationship continues to develop so the retailer can continue to learn the needs and wants of its customer base.
Social Media Platforms are uplifting UGC
For many, social media platforms are the perfect place to post user-generated content. Retailers who want to build brand loyalty over months and years will need to consider platforms like TikTok, YouTube, Instagram, Facebook and others as mediums to post, share, and develop user-generated content.
Within these platforms, user-generated content comes in the form of videos, images, and testimonials that can easily be shared and interacted with. Further, the most popular social media platforms have already updated their algorithms to prioritize UGC more than content posted by the brand itself.
This is why retailers across the industry are asking loyal customers to post their experience with a product and give it a testimonial if they loved it. When taken to the extreme, brands will pay influencers to post positive testimonials about a given product so their followers will be more likely to increase website engagement or make a purchase.
Social media personas who heavily use a retailer’s products can also act as branded community leaders within online hubs. Discord, Reddit, and Facebook are all prime examples of community-driven platforms that offer channels or forums dedicated to a single topic.
User-generated content has growing potential
User-generated content is freely available to any brand who wants it, and that’s a big reason it’s so appealing. Brands don’t need to pay buyers to create authenticity for their products—it happens naturally with UGC.
More often today are retailers asking their customers to speak out about their favorite products on review sites, social media and other online communication hubs to maximize buzz around their image.
A seemingly small but significant bump of 5% during the last 12 months in social media usage on a global scale leads us to believe UGC isn’t going anywhere anytime soon. Moreover, it’s inexpensive and extremely time effective so long as the brands update their social media pages regularly with fresh content.
Brand loyalty will forever be tied to UGC
Holding onto customers for the long-term has become increasingly difficult in today’s climate. Consumers have more options than they’ve ever had and we’re seeing them make purchases based on cost, reviews, and the speed of delivery more than the reputation of a brand.
In order to create a lasting impression on customers, brands need to find alternative reputation-building strategies that build loyalty. This is where brand loyalty and customer satisfaction meet head-to-head, and user-generated content is a driving force in that equation.
User-generated content helps build and maintain trust within a brand while giving customers a voice within their online circles. Further, traditional advertising isn’t given the credence it once was, and for many brands, UGC makes up for that and more.
