While loyalty programs have been popular in the US for years—with the average American consumer belonging to 18 loyalty programs according to loyalty marketing publisher COLLOQUY—whether these members are active is another story. “Points, coupons and freebies are great for grabbing initial attention,” said Krista Garcia, eMarketer analyst and author of the new report, “Social Loyalty: From Rewards to a Rewarding Customer Experience.” “But in the long run these promotions can’t make up for a lackluster customer experience.”

Through the use of social media, though, retailers and brands can identify and interact with their most profitable internet users. “Loyalty can be won through encouraging word-of-mouth and creating advocates, by raising a user’s social status, by surprising and entertaining shoppers in unexpected ways, and also by listening to customers’ needs and suggestions and responding in a mutually beneficial fashion,” said Garcia.

The link between social media and loyalty seems to be on the minds of many, but user behavior on social networks is still misunderstood. Marketers in a Q4 2011 CMO Council survey weren’t just being overly literal when they interpreted a “like” as an indicator of agreeableness to content, they were missing by a long shot how customers truly viewed social relationships with brands. In actuality, consumers most often clicked the “like” button to show their loyalty. The next most popular reason users clicked “like” was because they were looking for incentives or rewards.

“The ability to combine traditional loyalty programs with a social layer holds great promise for retailers and brands trying to strengthen retention,” said Garcia. “Starting with a compelling customer experience lays the foundation, then responding in real time, anticipating and meeting needs, and influencing a wider audience by creating sharable perks are part of the next generation of rewards.”