Going the Distance: Four Ways to Build a Better Customer Loyalty Program for Your Brand

It’s easy enough for a customer to join your loyalty program, especially when you’re offering an incentive such as discounts. All your customer has to do is give out some basic information, and voila! They’re in the fold, a brand new loyalty member with your company. From there, it’s happily ever after. You offer the perks; they stand solidly by you, bringing you their continued business. Simple. Or is it? In reality, just how many of those customers are act ively participating in your loyalty program? Do you know? Sure, loyalty program memberships are on the rise according to market research company eMarketer, having jumped 25 percent in the space of just two years. However, that figure may be a bit misleading. The truth is that, while loyalty program sign-ups may be more numerous, active participation in such programs is actually in decline. At the time of the study, the average US household had memberships in 29 loyalty programs; yet consumers were only active in 12 of those. That’s just 41 percent. And even that meager figure represents a drop of 2 percentage points per year over each of the preceding four years, according to a study by loyalty-marketing research company COLLOQUY.

When discounts just aren’t enough

So what’s a brand to do? How can you make your loyalty program worth your customer’s while—as well as your own? After all, gaining a new loyalty member doesn’t mean much if your customer isn’t actively participating in your program. Consider this: Does your customer loyalty program offer members anything different from what your competitors are offering? Chances are your program includes discounts. That’s a given. And what customer doesn’t appreciate a good discount? But when every other company out there is providing this staple benefit in comparable amounts, it becomes less and less likely that customers will remain loyal to any one particular brand. Frankly, it’s all too easy for customers to get lost in a sea of loyalty member discounts. They’re everywhere. In fact, just under half of internet users perceive that all rewards programs are alike, according to a 2015 eMarketer survey. The key to success, then, is to differentiate your business from the crowd. If you can offer your customers something unique and valuable beyond the usual discount, chances are they’ll be more likely to stick with your brand. Here’s some inspiration from companies who get it.

Virgin: Reward more purchases with more benefits.

That’s not to say you need to get rid of discounts entirely. In fact, nothing could be further from the truth. Customers still love a good discount. The goal is to be creative in terms of the loyalty perks you offer. Take the Virgin Atlantic Flying Club, for example. As part of its loyalty program, the airline allows members to earn miles and tier points. Members are inducted at the Club Red tier, from which they can move up to Club Silver and then Club Gold. Here, it’s not just a discount. It’s status. And people respond to feeling important, elite. Still, even where the rewards themselves are concerned, Virgin is motivating loyalty customers with some pretty attractive offers. At the Club Red tier, members earn flight miles and receive discounts on rental cars, airport parking, hotels and holiday flights. But as members rise in tiers, they get even more. At the Club Silver tier, members earn 50 percent more points on flights, access to expedited check-in, and priority standby seating. And once they reach the top, Club Gold members receive double miles, priority boarding and access to exclusive clubhouses where they can get a drink or a massage before their flight. Now that’s some serious incentive to keep coming back for more. Discounts are still part of the equation – but they are designed with innovation and personal value in mind, elevating them to more than just savings.

Amazon Prime: Pay upfront and become a VIP.

What if your customers only had to pay a one-time upfront fee to get a year’s worth of substantial benefits? It may not sound like the smartest business idea at first glance. But take a closer look. Amazon Prime users pay a nominal $99 a year to gain free, two-day shipping on millions of products with no minimum purchase. And that’s just one benefit of going Prime. It’s true that Amazon loses $1-2 billion a year on Prime. This comes as no surprise given the incredible value the program offers. But get this: Amazon makes up for its losses in markedly higher transaction frequency. Specifically, Prime members spend an average of $1,500 a year on Amazon.com, compared with $625 spent by non-Prime users, a ccording to a 2015 report from Consumer Intelligence Research Partners.

Patagonia: Cater to customer values.

Sometimes, the draw for consumers isn’t saving money or getting a great deal. The eco-friendly outdoor clothing company Patagonia figured this out back in 2011, when it partnered with eBay to launch its Common Threads Initiative: a program that allows customers to resell their used Patagonia clothing via the company’s website. Why is this program important to customers? And how does it benefit Patagonia? The company’s brand embraces environmental and social responsibility, so it was only fitting that they create a platform for essentially recycling old clothing rather than merely throwing it away. The Common Threads Initiative helps Patagonia build a memorable brand and fierce loyalty by offering its customers a cause that aligns with deep personal values. OK, so their customers get to make a little money, too. Everybody wins.

American Airlines: Gamify your loyalty program.

If you’re going to offer your customers a loyalty program, why not make it f un? After all, engagement is key to building a strong relationship with your customer. And what better way to achieve that goal than making a game of it. American Airlines had this very thing in mind when it created its AAdvantage Passport Challenge following its merger with USAirways. The goal: find a new way to engage customers as big changes were underway. Using a custom Facebook application, American Airlines created a virtual passport to increase brand awareness while offering members a chance to earn bonus points. Customers earned these rewards through a variety of game-like activities, from answering trivia questions to tracking travel through a personalized dashboard. In the end, participants earned more than 70 percent more stamps than expected – and the airline saw a ROI of more than 500 percent. The takeaway: people like games.

Stand out from the crowd.

Your approach to your customer loyalty program should align with your overall marketing approach. Effective branding is about standing out, not blending it. Being memorable is key. To this end, keep in mind that loyalty programs are no longer a novelty. That means that yesterday’s strategies won’t work moving forward, so look for ways to rise above the noise, setting yourself apart from the cloying drone of countless other cookie-cutter programs.

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The New Rules of Customer Engagement

The rise of the culture of the Web has revolutionized the nature of how businesses and customers relate to each other. Whereas companies could once shape and direct the perception of their brand through carefully crafted ad campaigns, direct mail and press releases, today the flow of information runs fast and free, and customers now own the conversation. And because whoever owns the platform dictates the culture, the world is a more human, less institutional place to do business. Today’s customers want to feel good about the products they buy, where they came from and how they were made. Moreover, they want to like the company behind the product – that is, genuinely like it, not just press a Facebook button. We are entering an age of emotive economics. Corporations have been forced to adapt to this new, people-centric culture by connecting with customers on their own turf in more casual, conversational ways. There’s little room or respect for old-school corporatism’s pomp and protocol. And those businesses that cling to traditional behaviors in the online community will earn its scorn very quickly. Those companies that have embraced this new landscape and its risks have enjoyed great reward. For this reason, the human face, rather than steal and glass, has become the façade of big business. Yet with style must also come substance. It is no longer acceptable to be about profit alone. Companies are expected to contribute to the world in ways that make their customers’ lives better. Consumers are demanding that business be done on their terms. It should come as no surprise, then, that human values – transparency, respect, conscientiousness, kindness, trust, generosity and the like – are the keys to engaging with customers in this brave new world of business. So how can you use this new dynamic to your advantage to grow your business? You must embrace the new rules of engagement, understanding that when you put people first, profit will follow:

1. Don’t treat customers like they’re stupid.

When Netflix bungled its attempt to change its pricing structure last year, the backlash in the online community was severe, with many customers threatening to cancel their accounts immediately. It was clear that customers viewed Netflix as a value-priced alternative to more expensive traditional paid media channels, and therefore many felt betrayed by the company’s sudden doubling of their fees. While the price increase itself wasn’t really so unjustifiable, what made it unpalatable for customers was the company’s lack of transparency in explaining the business drivers behind the rate hike – the rising operational costs of maintaining a physical DVD business and the growing licensing fees for content streaming. Instead, Netflix spun the move as giving customers a “choice,” offering the option to subscribe to a DVD-only service at its lowest price ever. Here's an excerpt from their ill-advised news release: To his credit, CEO Reed Hastings acknowledged the poor handling and chalked up the misstep to “overconfidence,” which still sounds like PR spin, but hey, we’re making progress. The lesson? If a change in product or policy may have negative consequences for your customers – even if only in perception – acknowledge them, express empathy over the inconvenience or added cost, explain the reasons if possible and then point out the benefits or offer alternative options. People understand that businesses must evolve and that profit is still part of the equation. Don’t assume that your customers are beyond reason or treat them like they’re too stupid to detect what’s really going on.

2. Over-serve your customers.

It’s always good business to go the extra mile for customers, but never more so than when trying to recover from a mistake. How you handle disappointment is what determines whether your customers write you off and tell everyone about it or trust you more and spread the good word about you. When Google decided to phase out Wave due to poor user adoption rates, they didn’t just shutter the windows and bury the technology as if it never existed. Instead, they gave users months to move their data off the service, converted Wave into an open-source project and gave the Wave community the tools to get involved:

3. Be humble and listen to your customers.

Building on the success of its breakthrough app Wunderlist, Berlin-based software firm 6Wunderkinder recently launched Wunderkit, a project collaboration and management tool designed around the social connections of today’s work environment. Wunderkit was made available in a “freemium” model, offering standard features to all users for free with additional functionality available for a small fee to power users. As the company analyzed feedback from its beta release of Wunderkit, they realized the community’s dissatisfaction with project collaboration between users – one of the platform’s central features – only being available to premium users. What follows is a fantastic example of how to demonstrate that you’ve heard your customers loud and clear, understand their feelings and are acting to resolve the issue:

The customer is king, and the king is here to stay.

Never underestimate the commitment required to engage with customers effectively in today’s marketplace. Human relationships are not managed well with rigid rules and policies but instead must be governed by human values like compromise, sensitivity and transparency. It takes much more than a Twitter account and Facebook page to win the hearts of customers. You must develop a culture that is focused on and driven by the customer through and through. Be purposeful in growing such a culture. Establish your own rules of engagement. Make sure every employee is encouraged to embrace and exhibit those values. Empower them to do whatever it takes to take care of your customers. The journey may be a bit rocky at times, but if you walk the line faithfully, you’ll earn something from your customers that can never bought with advertising dollars – trust, respect and even passion for your brand and what it stands for.

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Six Lessons from the Google School of Logo Design for a Digital World

Recently, Google set the design world abuzz when they unveiled their new brand identity. Gone was the familiar, sophisticated serif font reminiscent of classic books and newspapers that rolled off the printing presses. In its place, a new mark that retains Google’s trademark rainbow of colors but with a new sans-serif typeface of the company’s own creation called “Product Sans.” Love it or hate it, Google’s reasoning behind their redesign and what they hope to achieve with this new logo offer some interesting insights that any company in today’s multi-screen, multi-device world should take into consideration.

1. Size matters.

In their article rolling out the redesign, Google cites the need to “create a scalable mark that could convey the feeling of the full logotype in constrained spaces” as one of the challenges that they wanted to address. The need to consider a variety of screen sizes has become incredibly important over the past few years with the growing adoption of small-screened devices – from mobile phones to wearables like smartwatches. The relatively tiny screens on these devices put space at a premium, and most brand marks that were created prior to the advent of these small screens struggle to adapt to a much smaller canvas. For a visual brand to be successful in today’s world, you must ensure that it can scale and adapt to work effectively on any screen size or device.

2. You must consider the whole ecosystem.

In the not-too-distant past, when designing a new visual identity, there were only a limited number of applications that had to be taken into consideration: business cards, letterhead, signage, collateral materials, ads, product packaging, etc. This is why many early websites were little more than digital brochures. Companies took what they already understood (printed brochures) and tried to port them over to a brand new medium (the Web). This was obviously not an optimal solution, and since then, web design has come a long way from the days of static brochure sites. In much the same way, it’s time for logo design to evolve by taking into account the full array of digital platforms in which brands must reside today, including websites, mobile apps and social media sites, just to name a few. Taken as a whole, these make up a complex ecosystem with different channels that build upon and feed off of others. As a result, Google’s new identity takes the form not of a singular logo but of a system comprised of three “elemental states” that are flexible enough to be used across all mediums and platforms:

• Google logotype: The sans serif logtype retains Google’s signature multi-color sequence.
• Dots: A dynamic distillation of the logotype that takes the form of four animated, perpetually moving dots that are used for interactive, assistive and transitional moments.
• Google G: A compact version of the Google logo that works in small contexts.

When evaluating your own logo and how it translates across different platforms and channels, it’s important to make sure that all of its elements and iterations work together seamlessly so that they feel connected to your core brand identity in order to protect the integrity of your brand throughout the ecosystem.

3. There’s more to logo design than choosing a typeface.

Talk to someone who does not understand the nuances of design, and they are likely to assume that the process of creating a logo is comprised of little more than selecting an attractive font and maybe adding an illustrated icon in front of it. In truth, however, logo design is its own unique and complex discipline. Just as Google did, any successful logo design process must consider the weight and legibility of that logo along with “spacing, clearance rules, and specification for in-product treatments.” It also must factor in big-picture thinking, such as how the logo will transform in various applications (when it must be displayed in black and white versus full color, for example) and whether it sets the right tone for the brand. Yes, using attractive letterforms is part of designing a quality logo, but this process goes way deeper than just font selection.

4. Performance matters.

How quickly a website loads is more important today than ever before. With mobile devices making up a larger and larger percentage of website traffic, and with emerging countries becoming an important part of the audience on the Web, the need to create sites that load quickly for all users is paramount. To accomplish this, website designers must look for ways to streamline a site’s overall file size. The new Google logo is only 305 bytes, which is a significant decrease from the old logo, which weighed in at ~14,000 bytes. Google actually had to deliver a text-based, non-image version of their old logo in some instances, but the new one is so small that it can be delivered to all connections, keeping the brand identity consistent. Overall performance is critical to the success of a website – after all, no one ever complains that a site loads too fast. You may not be thinking about download size and performance when creating a logo, but you should be, because improved performance should be a thread that runs through every decision you make on your website. Better performance can mean happier visitors, improved search engine rankings and better conversions rates for your website.

5. You can’t please everyone.

As soon as the new Google logo debuted, there were people praising the design as well as those tearing it down. Even within the design community, reactions on Twitter ranged from “The beautiful balance of utility and joy” to “I love the font in the new Google logo – a revival of Paul Renner’s rarely seen 1934 masterpiece, Futura Jackas” – proof that no matter how well-reasoned or well-intentioned the principles behind your design are, you simply cannot please everyone. One of the most challenging realities of a redesign, whether it is for a logo, a website or an application, is that you are forcing change upon people who did not ask for or expect it. Even if the change is for the better, it’s human nature to favor the familiar and therefore to react strangely to a change that they did not initiate themselves. Couple this with the fact that people are more likely to contact you when they dislike something than when they like it, and a redesign can quickly generate what feels like an overwhelming amount of negative comments. For some companies, this initial wave of critical feedback can be scary and may lead to the temptation to revert back to the old design. But you cannot give into this! If you followed a good process and if the new design is well thought-out and executed, you need to give it time for people to grow accustomed to it and embrace it. You cannot please everyone, but given ample time, you will find that a quality redesign will win people over, and all of those detractors will fall silent.

6. Redesign for the right reasons.

Because introducing a new visual identity can be disorienting for your customers, and because there’s no purely scientific method to ensure your redesign will be well received, it’s important to make sure that there is good reason behind your decision to reinvent the look of your brand. With Google, the logic behind their decision was clear: “Since its inception, the Google.com homepage has been strikingly simple: The quirky, multicolored logo sits above a single, approachable input field on a clean white canvas. But as technology moves forward, the canvas itself is changing, and the inputs and needs are becoming more diverse. New classes of devices and ways to interact and communicate have emerged with wearables, voice technology, and smart devices in the world around us. Users now engage with Google using a constellation of devices, and our brand should express the same simplicity and delight they expect from our homepage, while fully embracing the opportunities offered by each new device and surface.” In short, Google needed a new identity that would represent the brand as effectively to someone who is typing keywords into a search bar on a desktop as one who is using a smartwatch as one who is using a device that may not yet even be conceived – or at least available to the general public. Likewise, while you should never redesign your company’s logo just for the sake of redesign itself, if your brand has evolved since your logo was originally conceived – whether in terms of the products you offer, the audience you serve or the channels and platforms through which they interact with your brand – it may well be worth the risk to introduce a new, modernized identity that will support the growth of your company now and for many years to come.

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