advertisement
advertisement

Is American Airlines’ New Social Program—Where Influencers Get Free Airport Club Access—Something Retailers Should Try?

Written by Evan Schuman
May 8th, 2013

The idea of retailers assessing customers’ value based on their social media influence—rather than what they personally spend—is not new. But the challenge of meaningfully figuring that out is still huge.

American Airlines on Tuesday (May 7) announced that it was going to offer people who have a high social influence free access to its airport lounges. On the plus side, this is one of the first major programs to offer shoppers a concrete item of value (people pay a lot to join airline clubs) in exchange for having a high social influence number. The downside is that the company calculating the social influence number—a vendor called Klout—has taken the easy way out. It simply counts up the Twitter followers and Facebook friends (and other social media stats) and looks at forwarded Tweets.

It doesn’t take the next logical step and try and determine actual purchasing clout. For example, the most meaningful number would be how many dollars of purchases that shopper’s Tweets generated. It’s nice if someone has a lot of Twitter followers and if they Tweet that the shoes on your homepage now are must-haves. But an influence rating needs to factor in what happened after that Tweet went out. Did it deliver 48 purchases of that product from the recipients of that Tweet?

In other words, what is the actual influence of that person with a lot of LinkedIn connections? Do their followers tend to do what they suggest? Without knowing that, the numbers do not mean much.

But this American Airlines program is the first step on setting up special benefits for a small group of people who at least have a lot of followers. Should retailers offer special sales, but only for people with at least 5,000 Twitter followers? Should this be like political campaign bundlers, who are valued for the total number of dollars they deliver, not necessarily the size of the checks that they personally write? Campaigns would much prefer a persuasive popular bundler who can get friends and co-workers to deliver $20 million than a wealthy individual who will write a personal check for $1 million.

The intriguing part of the American Airlines promotion is that it can deliver three things. First, it will bring more people into the American Airlines club, which will encourage those people to fly American as often as practical. Secondly, it will give American Airlines customers an incentive to use Klout. And thirdly, it will encourage them to do anything they can to inflate—artificially or otherwise—their social numbers.

From a retailer’s perspective, although getting true purchase-influencer numbers would be extremely helpful, the raw numbers might still work from an advertising perspective. Someone with a million Twitter followers is a great low cost way to publicize your products. And if you’re confident in the quality of your merchandise, getting the people with the largest numbers in with the incentive of discounts or better return rules or longer hours (the one-time Costco trick of letting corporate card holders come in an hour earlier than anyone else) is a nice way to potentially get more of the word out.

Then there is the chain effect on social influence. Maybe Customer 104 only has 200 followers, but you’ve determined that many of those followers are huge influencers. The deeper you dive into the data, the more potential it has. But if the system you’re relying on just counts numbers, the ROI on these kinds of social-to-in-store programs is going to be really dicey.


advertisement

Comments are closed.

Newsletters

StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!
advertisement

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

StorefrontBacktalk
Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.