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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Focus, Technology and Personalization: A Master Class in Branding from Apple’s Angela Ahrendts

Angela Ahrendts was recognized as a branding and marketing powerhouse well before Apple tapped her as their senior vice president of retail and online sales. Her eight-year track record at Burberry is very nearly legendary — and with good reason. When Ahrendts came to Burberry in 2006, growth at the venerable company had nearly come to a standstill, but within just a few years, she had re-established the brand as a force to be reckoned with in the luxury market. Through a combination of savvy use of technology and some hard-nosed business moves, she rebuilt the Burberry label brick-by-brick, and by the time she left for Apple, had nearly tripled the company’s annual revenue. And while your company’s marketing budget and resources surely are a drop in the bucket compared to Apple’s or Burberry’s, that doesn’t mean we can’t take a page from her syllabus and learn to how to emulate her innovative approach to branding building. So why don’t we all turn our attention to Professor Ahrendts, and let her teach us how to embrace the principles and practices that brought her phenomenal success at Burberry and got Apple’s attention.

Focus, focus, focus

When Ahrendts became CEO of Burberry, she inherited a brand in turmoil. The venerable 150-year old name was no longer synonymous with luxury; instead it had become the label of choice for British hooligans — so much, in fact, that some pubs refused to allow patrons inside if they were wearing Burberry. Outside the UK, the situation was even worse. Burberry had forged licensing agreements with more than a dozen international companies, and those companies were creating their own inferior products, then stamping them with the Burberry label. While Burberry was foundering, the luxury market as a whole was growing. Ahrendts found herself competing against well-established brands in a competitive market where her company had lost all advantage. Her response? Focus.

The brand

She began by finding what she refers to in interviews as her “white space” — the niche in the market that only Burberry could fill. And she found Burberry had two things that made it completely unique: it was British, and it had a history that spanned 150 years back to a single overcoat. These two features have been the touchstones guiding Burberry ever since in every piece of marketing, every fashion show and every story the brand has told — British models on the runway, British music on the website and in stores, and those classic trenchcoats always on prominent display.

The market

With a clear focus for the brand established, Ahrendts moved into market research to find the white space among consumers. Research told her something interesting – something that competing brands had either completely missed or ignored. The demographic group spending the most money on luxury consumer goods, especially in emerging markets, was the Millennial generation. So she landed upon the concept of “democratic luxury” as a way to bring the Burberry brand to a younger generation, avoiding the stuffy image many luxury brands promoted and making Burberry young, exciting and friendly.

The vision

Her final area of concern was all those licenses that were diluting the brand. Burberry bought back the licenses and established tight control over every single item that carried the Burberry label, from products to marketing campaigns. The new rule was simple: anything visible to the consumer passed through the hands of Chief Creative Officer Chris Bailey, the keeper of Burberry’s brand vision.

Digital first

Ahrendts has said that she views digital technology as a force for driving change rather than a marketing tool – a philosophy that is front and center in all of Burberry’s online outreach efforts. Take, for example, the Art of the Trench and the Burberry Kisses campaigns. Neither is designed as a direct-sell campaign but rather as a way to connect with, engage with and delight consumers. Then there’s Acoustic Burberry — a showcase of up-and-coming British musicians featured online and in Burberry stores. This integration of online and physical worlds is another of Ahrendts’ trademarks, and it’s embodied in Burberry’s flagship store, opened under her direction in 2012. Her stated goal was to make walking through a store exactly like browsing the Burberry website, and that goal is more than met. The store leverages cutting-edge technology to create a truly unique experience for customers. One great example is the use of chips embedded into selected products to activate interactive screens showcasing the story behind each item. Even runway shows blur the line between online and physical reality. Burberry now live-streams their fashion shows and allows online viewers to purchase items they see on the runway — well before they’re actually available in stores. It’s this seamless integration of worlds that has made the Burberry brand unique among its peers.

And always personal

Angela Ahrendts has also pioneered the use of technology to truly personalize the Burberry brand experience. In the stores, associates carry iPads with access to an international database of customers that provide purchase histories and personal preferences in order to allow them to provide their clients with a higher level of service. And online, customers are given the opportunity to customize items with nameplates and personalized technology. Orders placed online are even confirmed by a personal call from a Burberry rep.

Your takeaway

Angela Ahrendts has established herself as a branding genius — and Apple stands to benefit immeasurably under her guidance. Take her philosophy as an example, and reap some of the same benefits in your own market and on your own scale: Keep a clear focus on your brand story. Maintain control over your brand. Find your audience and learn to speak their language, which Ahrendts would say is digital. And discover ways to differentiate your product through presentation and personal service.

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Mythbusting Google’s “Mobilegeddon"

Back in December, we published an article called “Another Google Game-Changer: How Going Mobile Friendly Will Boost Your Search Visibility” that addressed the new “mobile friendly” designation that the search engine was adding to websites that had been optimized for mobile devices.

At the time, Google said that they saw “these labels as a first step in helping mobile users to have a better mobile web experience.” They went on to say, “we are also experimenting with using the mobile-friendly criteria as a ranking signal.” Many people speculated that it would only be a matter of time before Google started rewarding sites that were mobile friendly, and thereby penalizing those that were not. That day has come.

In a recent announcement, Google clarified their intentions for this mobile friendly label, stating that “starting April 21, we will be expanding our use of mobile-friendliness as a ranking signal. This change will affect mobile searches in all languages worldwide and will have a significant impact in our search results.”

If your site is not mobile friendly, Google has been quite clear in the fact that that site will no longer be given the same consideration that sites that are responsive and mobile friendly will be given. If you haven’t yet made multi-device support a priority on your website, now is the time to do so!

In prestigious company

Creating mobile friendly websites that are built with a responsive approach is not a new idea. The article that introduced this term to the industry was published in 2010 and it has been a best practice for years with Google recommending it as their preferred solution for multi-device support for quite some time. Still, even though responsive web design has been an important part of the Web industry for a while, there are many companies that have not yet implemented these best practices on their own site. If you are one of the companies that has thus far eschewed this approach to multi-device support, rest assured that you are in prestigious company.

A recent article by TechCrunch found that 44% of websites for Fortune 500 companies failed when using the Google PageSpeed Insights API. This tool shows if a site is, indeed, mobile friendly. The findings of this report show that the failure to go responsive is not always due to financial reasons. The prestigious companies on the Fortune 500 list can certainly afford to redesign their websites to add a mobile-friendly experience. So why haven’t they done so then? Oftentimes, when a company fails to go responsive and create a site with an optimized experience for all screens and devices, it is because they do not fully understand the importance or benefits of doing so.

Mobile expectations

Google’s changes to their algorithm show that they expect more from websites and the experience they deliver to mobile devices. This makes sense, because web users as a whole have begun to expect more from mobile websites.

A short time ago, Google conducted a survey of website users and their opinions on the mobile web experience. They found that “72 percent of mobile users say it’s important to them that websites are mobile-friendly, yet 96 percent have visited a site that doesn’t work well on their device.”

The survey, and resulting report, went on to state that “users are five times more likely to abandon the task they are trying to complete if the site isn’t optimized for mobile use, with 79 percent saying they will go back to search and try to find another site to meet their needs.”

As these numbers show, the expectations for mobile websites are rising and the patience to deal with non-mobile friendly sites is greatly diminishing. Because of this, the “do nothing” approach to multi-device support is simply no longer an option.

The “do nothing” approach

The “do nothing” approach to mobile web support is pretty easy to accomplish, because, as the name suggests, you do nothing to your website and allow a layout that was intended for large screen, desktop monitors to display on all devices and screen sizes – mobile included. Before the rise in popularity of mobile devices, this is how all websites were built. As such, when people first began using those mobile devices to access websites, they accepted the fact that sites were difficult to use on those devices. They had to “pinch and zoom” to read content or tap links that were meant to be clicked with a mouse, not touched with a finger. Once responsive design took hold, however, and as more and more sites integrated this approach and improved their mobile experience, expectations from customers were raised.

In short order, the “do nothing” approach went from an unfortunate, yet acceptable, solution to a sign that your site was behind the times. Now, with Google’s changes to their search algorithm and their clear stance that the “do nothing” approach is no longer acceptable, this approach will not only show you are behind, it will also hurt your site’s overall SEO. If you have not yet made your site mobile friendly, and you are not planning to do so now, expect that your site will fall further and further behind the times and lower and lower in Google’s search engine rankings.

The case for mobile-friendly

Google’s algorithm changes are the final piece that many companies may have needed to finally take the steps to make their site mobile friendly – but maintaining quality rankings is not the only reason to use this approach. There are a number of benefits to going responsive on your website, including:

Customer service – since customers expect a website that works well on all devices, from desktops to tablets to phones and beyond, by delivering a quality experience on all these devices, you present a better overall customer service experience

Business development / customer retention – as the Google report shows, customers who visit a site on a mobile device and find it not optimized for that device are likely to leave the site and seek out an alternative for the products or services the need. This is lost business for you! A site that works well on all devices ensures that the traffic you get is the traffic you keep!

Content consistency – with a responsive website, you have 1 website to maintain and manage, as opposed to separate sites for mobile versus desktop users. That one site will dynamically reflow its layout based on a user’s screen size. This means that while the look of the site may adjust for different users, the content will remain the same, ensuring that the right message is always delivered regardless of the device being used to access the website

Take the leap.

Expect search engine rankings to change dramatically after April 21st as Google begins using mobile friendless as ranking criteria. If you are not ready for this change, speak to your web or marketing team immediately and get the ball rolling on plans that will bring mobile support to your website and have your business ready for the increasing mobile-centric future of the Web.

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