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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Pareto Principle Demystified: Applying The 80/20 Rule in Website Design

Are you spinning your wheels trying to boost traffic to your website? Are you constantly pouring resources into your site in an attempt to make sure that it’s everything your customers could want – adding new features, testing new strategies, redesigning in the name of staying current with the latest trend? What if I told you that the key to improving your website’s performance lies not in doing more but in doing less? If that prospect sounds too good to be true, I assure you that it’s not. Allow me to introduce you to the 80/20 Rule: focus on the 20 percent of things that will fetch you 80 percent of the results.

The 80/20 Rule defined

The 80/20 Rule is often interchangeably known as the Pareto Principle, Juran’s Principle and the Principle of Factor Sparcity. So what exactly is this multi-monikered principle? Let’s turn to Wikipedia for the answer: “The Pareto Principle...states that, for many events, roughly 80 percent of the effects comes from 20 percent of the causes.” The concept was the brainchild of business consultant Joseph M. Juran, and its namesake is Vilfredo Pareto, an Italian economist who observed in 1906 that 80 percent of the land in Italy was owned by 20 percent of the population. Since then, the principle has been applied widely to all aspects of business, whether it’s that 80 percent of a company's profits come from 20 percent of its customers, 80 percent of its sales come from 20 percent of its products or 80 percent of deals are closed by 20 percent of its sales staff. By following this principle, many businesses have realized great gains in profitability by focusing resources on the areas that net the greatest effect and eliminating, ignoring, automating, delegating or retraining the rest.

But how does the Pareto Principle apply to website design?

For the answer to that question, let’s head over to the blog of Tim Ferriss, a well-respected efficiency expert with a well-documented affinity for all things minimalist. Ferriss, a proponent of the 80/20 Rule, once performed a case study and noted that websites optimized using the Pareto Principle have a 20 percent higher conversion rate. Further more, Ferriss observed that in order to effectively implement the Pareto Principle in the design of any given website, only certain changes are required to be made, the majority of which involve the home page itself, since that is where most – if not all – of the site’s most mission-critical information lives. Most of these changes are relatively minor in nature, such as a cleaner call-to-action button, an uncluttered sidebar and so on.

Why should you use Pareto Principle in your web design?

The benefits of applying the Pareto Principle in the design of your website are two-fold for your visitors and for yourself. To begin with, the Pareto Principle means less work for you. Rather than fussing and fretting over how to max out every available square pixel of real estate on the screen with every conceivable feature and copy point, you only have to concentrate on that most important 20 percent that will take care of the remaining 80. Plus, keeping the focus on the most essential aspects of your site website ensures that your visitor’s attention is driven straight to your primary call-to-action elements (in fact, the Pareto Principle can be detrimental if not backed with a crystal-clear call-to-action mechanism). This in turn leads to higher conversion rates and winning over more new fans, subscribers and customers for your brand. From the perspective of visitors to your site, the Pareto Principle guarantees that they can look forward to a clean, streamlined browsing experience with fast page-load times that’s free of distractions and frustrations of any kind, thereby helping to turn turning random first-time visitors into regular users.

Putting Pareto into practice

Now that you’re on board with the Pareto Principle, how do you go about putting it into practice? To begin with, let’s take a literal interpretation of the rule: focus on the 20 percent of the elements that are responsible for the other 80. What is that magical 20 percent of the most vital things in your website? Call-to-action buttons, traffic funnels, images, whitespace, etc., right? In other words, USER EXPERIENCE. Yes, that’s right. The driving motive behind the 80/20 Rule is to provide the best possible user experience. Let’s examine the simple example of social sharing buttons – a nearly ubiquitous presence on every website or blog nowadays. Look at the sharing buttons that are present on your website. When was the last time the MySpace, Friendster or Digg buttons were used? These do not belong in that vital 20 percent. Similarly, let’s focus on another commonplace element of web design – the sidebar. Look at the sidebar elements on your own website or blog. What’s the purpose of having your 15 most recent posts listed there? If you are running a blog, your visitors can easily find your most recent posts on the main page of the blog itself. If you are designing for mobile, the Pareto Principle becomes all the more vital. In general, the elements that are prioritized for a mobile version constitute that 20 percent. If you are able to freely leave out certain sections of your website in its mobile version without negatively impacting its usefulness to your visitors, chances are that those sections do not belong in the most important 20 percent segment of your desktop version, either.

Five simple steps to implement Pareto

1. Identify the primary objective of your website. Is it to sell products, promote your brand or provide a service to the community? 2. Next, make a list of all items on your website that contribute directly to the fulfillment of this goal. For example, if you are selling products, the area where you promote your latest special offer or new arrivals belongs in the 20 percent. Also make a similar list of items that do not directly contribute to the main goal. 3. Eliminate any and all unnecessary elements. Easier said than done, isn’t it? 4. Refine, refine, refine. Make sure the focus of every page and every element on the page remains on that critical 20 percent of items that directly support your main objective. 5. Grab a coffee.

Analysis, prioritization, optimization and simplification

Before you launch into an all-out take-no-prisoners offensive to streamline your website, here are a few additional tips to consider: Analysis: Use tools such as Google Website Optimizer and Analytics to analyze your website’s most frequently used and important elements. Prioritization: Once identified, prioritize that 20 percent of important aspects that are responsible for 80 percent of the results. Optimization: Optimize that 20 percent elements and thereby see a boost in 80 percent of the performance. Simplification: Implement good design principles of minimalism and reductionism to simplify your site’s user experience without sacrificing quality. A final word of caution: Don’t overdo the 80/20 Rule. While you do want to focus on the 20 percent, this does not mean you should outright ignore the other 80 percent of lesser important things. When it comes to user experience, the details matter. Unarguably, the greatest benefit of implementing the Pareto Principle in the design of your website is that it allows you to keep your focus on the content that matters most. So go ahead, and experiment with putting it into practice. After all, what do you have to lose besides the clutter that is holding your site back from reaching its maximum performance potential?

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Rediscover the Lost Art of Focus

Does this sound like a typical occurrence in your day? You've just wrapped up one task, and before you move on to the next, you decide to take a quick break to see what's new on Facebook. Hey, look – your friend posted a link to an article in the New York Times. You click through to read, and when you're done, one of the related articles catches your eye. That one leads to another and then another. When you finally reemerge from the rabbit hole of link-clicking, you realize that half an hour has evaporated. Or perhaps your e-mail notification alert chimes, and you click over to find a reminder that your car is due for service. While you’re waiting on hold with the dealership to schedule your appointment, it occurs to you that you haven't checked the balance in your bank account lately, so you log in, and then you remember that you also need to pay your water bill. Before you know it, what began as a simple two-minute task has become a 20-minute derailment.

The cost of disruption

But a few distractions during the day are harmless and practically unavoidable, right? Not so much. All those minutes wasted here and there turn into hours that come with a high price tag if you're your own boss. When you're an entrepreneur, your time is your most valuable asset. When you're an entrepreneur, your time is your most valuable asset, and one of your most important responsibilities is being a good steward of that asset. Every minute frittered away on Facebook, YouTube, blogs and even mundane chores is a minute you're not spending innovating, selling or shipping. In reality, no matter how dedicated you are to your business or how deep your passion runs for what you do, staying focused can be a challenge. Between phone calls, e-mail, social media sites and routine daily to-dos, your attention is constantly being pulled in many directions at once. However, it is possible to quiet your mind and rein in the distractions, but to do so, you must recondition your brain. If you're serious about increasing your productivity, you must commit to a structured regimen of daily practice in regaining your focus, just as you would if you were training to improve your speed and endurance in running or cycling.

The Pomodoro Technique

One of the best methods for cultivating your powers of concentration is the Pomodoro Technique. In a nutshell, this technique is a time management tool that breaks the working day into units of 25 minutes called "Pomodoros." Use the clock as a time cop and obey it relentlessly. To get started, all you need is a timer, a notebook and a pen. When your day begins, make a list of all the tasks you must accomplish in order of priority. Set the timer for 25 minutes, and start working on the task at the top of the list. Focus on this task and only this task until the timer chimes. When the timer goes off, mark an x next to that task on your list and give yourself a short break of no more than three to five minutes. The purpose of this break is to let your mind rest and disconnect, so don't keep thinking about what you were just working on, and don't get wrapped up in responding to e-mail or returning a call from a client. Instead, relax, get up and stretch, read an article on your favorite blog or take care of one item on your personal to-do list. After every four Pomodoros, take a longer break of 15 to 30 minutes. Then simply repeat this cycle until your workday is done. The key to success in implementing the Pomodoro Technique is to use the clock as a time cop and obey it relentlessly. Be sure to set the timer for breaks, too, so that you're not tempted to extend them beyond the allotted time. However, always keep in mind that breaks are equally important as the 25-minute Pomodoros, so don't work through them in your eagerness to finish your task, either. The breaks are there for a reason – to allow you just enough of a mental refresher to keep you razor-sharp without getting sucked into a vortex of distraction.

Put time back on your side

As you adapt to this new daily rhythm, you'll be amazed how quickly the clock ceases to be your enemy and becomes your ally. You'll also realize how many times throughout the day you habitually allow yourself to be interrupted by distractions like Facebook and Twitter just because they're there. Reclaiming lost time in your day is critical to getting the most out of your business growth efforts.With practice, it will be easy to tune anything and everything out for 25 minutes. Knowing there is a break ahead is a great source of motivation. When you're tempted to check e-mail or see who's on IM, look at the clock first, and make yourself stick it out, knowing you never have more than 25 minutes until the next break. The Pomodoro Technique is much more than just an exercise in self-discipline; it's also an invaluable resource to help you take control of your time and boost your productivity. Because you keep a running daily log of how many Pomodoros it takes to accomplish each task, you will develop a very clear picture of how long each activity takes, which will help you estimate and prioritize projects more effectively so that you don't find yourself racing to meet deadlines. You can also identify tasks that are absorbing a disproportionate amount of your time and develop more efficient ways of getting them done. Reclaiming lost time in your day is critical to getting the most out of your business growth efforts. When your focused work time is more productive and your downtime is kept in check, you'll be amazed at how much you can accomplish when you quite literally put your mind to it.

Further reading

To learn more about the Pomodoro Technique, download the free instructional e-book at  www.pomodorotechnique.com.

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