March 2012

is a philosophy and a business strategy, supported

by a technology platform, business rules, processes

and social characteristics, designed to engage the

customer in a collaborative conversation in order

to provide mutually beneficial value in a trusted and

transparent business environment.

It’s the company’s response to the customer’s

ownership of the conversation.

— Paul Greenberg, Social CRM Strategies, Tools and

Techniques for Engaging Your Customers

Since March, 2011 Watsons Ukraine invested in Facebook community growth keeping the engagement rate at the high level.

The community numbered over 30 000 Watsons customers, 60% of which corresponded to the Client's core audience.

Facebook community was actively used to launch new products, stimulate sales with coupons, numerous branded campaigns.

It looked like we have a great community…

but something was missing…

We actively engaged with Facebook fans, got reach

for key messages, even made 15% out of Listerine

sales during the exclusive launch campaign…

— How many of them are real Watsons consumers?

— How often do they visit Watsons stores?

— What products do they buy?

— How much do they spend?

— How valuable they are for the Client's business?

—Can we somehow chance their buying

habits?

The agency outlined the objective – to build the

system that would let in a real time format answer

all those questions at the same time would

become a basis for a new channel of relationships

building with Watsons customers and vendors.

The other objectives were:

— to substantially increase the engagement rate

with community contents

— and raise the number of community members/

generate new Likes.

Taking into account gained expertise with

managing the community for a year-long time,

long-term goals as well understanding the insights

of the community fans,

we believed the activation mechanics

should be based on something other than

a big prize fans have to fight for.

(e.g iPad2, a car, a trip, etc.)

The approach should have met the following criteria:

— Relevance in a long-term perspective (the consumer should have an opportunity to join an activation any time and at the same time have the same chanced as those who were the first to join)

— It has to be integrated into Watsons core business and its goals (activation should be interesting to exactly Watsons consumers in contrast to those who like to win prizes or motivate the last to become Watsons consumers )

We developed and launched a system that rewarded active Facebook community members – basically an extension of the already acting Watsons Club loyalty program.

In order to earn bonuses in Watsons Club program just for engaging with the Facebook community content, a user just needed to enter the Watsons Club Card number. As simple at that!

We gave our fans on Facebook what they wanted (savings on purchases) for what they love to do (Like, comment and share the content).

Watsons Club+ is ability to analyze:

—customer behavior in Watsons stores

—average check size, purchase frequency

— socio-demographics profile

—additional communication and sales

stimulation opportunities, etc.

The Watsons Club+ launch (testing started on Feb. 7, 2012) was supported by:

—content in Facebook community (Wall posts)

— targeted ads campaign on Facebook (accent on the existing page fans)

—Watsons Club+ E-mail newsletter announcement

—Ad in 'Tviy Watsons‘ (retailer monthly newspaper)

Gender Watsons Club Watsons Club+

Female 75% 88%

Male 21% 10%

N/A 4% 2%

100% 100%

Age range Watsons Club Watsons Club+

<20 11% 7%

20-29 32% 56%

30-39 27% 23%

40-49 17% 7%

50-59 9% 3%

60-69 3% 1%

N/A 1% 3%

100% 100%

In

general Watsons Club Watsons Club+ VIP

Average

frequency of

purchases, a

month

- 1,96 1,08 3,03

Average check,

UA Hrn. 64,60 70,78 18,83 100,27

Terrible! :(

— 2× bonuses for shopping in Watsons

for Watsons Club+ members only

— The offer is for 6 days only (15-21.03.12)

— There was only one

announcement made:

a post on Watsons Ukraine wall

— 14 thousands comments

— 1400 «likes»

— 870 «shares»

But, the aim of every loyalty program is to make regular

customers better customers. Is this true for a Facebook-

based loyalty program? Can we turn Facebook fans into

better customers? We decided to give it a try:

42.7% of Watsons Club+ members

made a purchase!

For similar CRM-based offers a Client faced 9 to 17%

rates in the past.

* 1451 customer made 2233 purchase during only 6 days

(Watsons Club+ members at the time of the offer – 3396.

There are about 4k members now)

As a result of Watsons Club+ launch, Watsons Ukraine Facebook page

faced +8 000 Likes growth during 1,5 months and keeps the dynamics

of +100 new members a day.

Fans engagement since the launch of Watsons Club+

has grown enormously.

11%

89%

8%

91%

6%

91%

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

Before Watsons Club+ launch After Watsons Club+ launch

Likes

Comments

Shares

4% 6%

54%

36%

3% 3%

46% 47%

2% 3%

43% 52%

0

5000

10000

15000

20000

25000

30000

December January February March

Likes

Comments

Shares

Watsons Ukraine — No 1 in the rating of all

Facebook pages in Ukraine for engagement per

post.

—Watsons Club+ will be developed as a

social CRM and will become a central part

of Watsons Ukraine Facebook community.

—Watsons gives a lot to Facebook fans, but

it gives so much more to Watsons Club+

members!