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.

---

One Year Later

Today, there is freedom in marketing. No longer is the loudspeaker of the media controlled by a select few. As a result, so much more can be gained than ever before, all with fewer resources and less risk. The playing field has been officially leveled—and not a minute too soon.

With those words, we launched the first Fame Foundry Magazine and began leading a revolution.

Recognizing that the world of marketing is riddled with misinformation and con artists, we set out on a mission to cut through the static and get to the truth of the challenges of growing business today.

Each month we bring you articles that cut through the muck of jargon, myths, speculation and the outmoded ways of old marketing to give you the clarity and perspective you need to thrive in today's marketplace. As we mark our first anniversary, we take a look back at the fundamentals of new marketing that we’ve established over the past year.

The end of marketing as we knew it

Prior to the advent of the Digital Age, our culture was based on a handful of media. Television, print and radio were the anchors of mass information exchange and business promotion.

As a result, if you owned a business or were charged with growing a company, you were shackled to promotional entities such as television commercials, newspapers and the Yellow Pages.

Those days are long gone, and those systems are now dying. In their place are unlimited channels of conversation not only between one person and another but between people and business.

No longer does mass media claim a chokehold on the lines of communication between companies and customers. No longer are information gathering and sharing the exclusive domain of mainstream news organizations. No longer are consumers willing to passively absorb the web of lies concocted by marketing’s spin doctors.

Today the means of communication have been revolutionized, and the old methods marketing to the masses have been rendered ineffectual.

Read more:
Prying the Torch From the Dead Hands of Old Marketing

All hail the virtual agency

The only thing deader than old marketing is the traditional agency, and its business model is in the grave right along with it.

Today's marketplace is ruled by survival of the fittest. It's time to get faster, leaner, smarter and more agile, and marketing agencies are no exception to this rule.

The new marketing company is one that hasn’t forsaken business principles that are timeless but takes advantage of all that’s afforded by today's technology to shave off unnecessary expenses.

OUT: Deals with a select few in a position of control.

IN: True, choice-based media, entertainment and communications.

OUT: Expensive payments to big, traditional, bureaucratic agencies that still attempt to use carpet-bombing tactics to grow your business.

IN: Fresh and nimble development firms who know how to build a brand and grow a following around it using today’s communication systems.

OUT: Paying the price for enormous overhead expenses for big buildings and lavish offices filled with excessive personnel.

IN: Virtual and hybrid marketing firms that work fast and don’t pass the bloat of unneeded expenses on to their clients.

OUT: Working through layers of costly production managers, account executives and supervisors before you get to the people that really do the work.

IN: Having access to the key architects and creative talents who are integral to the ideas and concepts essential to your success.

Read more:
10 Things You Pay for From Traditional Marketing Agencies

If marketing is dead, what's next?

Getting and keeping customers is what it's all about. That much hasn't changed. What has changed is what's needed to achieve it.

Gone are the days of growing your brand by marketing to the masses. Today’s consumers are disengaged from commercial culture as we once knew it, disenchanted with marketing’s shallow messages and misleading claims and disillusioned by promises unfulfilled. Instead, they are ever in search of the authentic. They are driven to seek out companies they can believe in and to identify themselves with brands that inspire them.

In a world of unlimited channels of communication, loyalty is no longer a commodity that can be bought rather than earned. In the new millennium, trust has become the currency of a marketplace driven by the consumer, and the new way to grow business is through trustcasting.

Simply put, trustcasting is the ongoing process of building and maintaining trust between a business and its customers. The practice of trustcasting requires that any and all resources dedicated to the promotion of business be directly or indirectly founded in trust.

Trustcasting approaches customers as people, not numbers. For those ingrained in the old practices of mass marketing, this represents a daunting ideological shift, but the task of earning and keeping trust cannot be reduced to statistics or demographic segments.

Recognizing word-of-mouth as the primary medium by which today’s customers are won, those that practice trustcasting engage in two-way communication with their customers on a human level, demonstrating genuine respect and value for their time and attention. While this approach undoubtedly requires a more significant investment in time and resources than traditional marketing, the return — cultivating a community of evangelists around a brand – is also much more profound and lasting.

Read more:
Put Away the Smoke and Mirrors
The Trust Manifesto
Goodbye, Marketing. Hello, Trustcasting.
10 Resolutions for Success in 2010 and Beyond
10 Keys to a Successful Marketing Partnership

A brave new world

In today’s marketplace, the Web is where customers are won and businesses grow.

It starts with a great website – one that has successfully confronted and conquered the challenges of providing a beautiful interface, engaging content and utility beyond your primary offering. However, even the best site is only the first step; it’s the foundation upon which you can start to develop a community around your brand.

Once you’ve launched your site, you’ve effectively set up shop and opened the doors. That’s when the real work begins.

To get and keep customers, you must master the Web marketing universe beyond your own site. You must actively seek out those whose needs, desires and interests align with the products or services you offer, draw them in and engage them in conversation.

While it may initially feel like daunting and unfamiliar territory, the key to navigating this new landscape successfully is to ensure that all of your efforts are driven by the motivation of establishing and keeping trust. As long as you always follow the principles of trustcasting, you will inevitably turn contacts into customers, customers into fans and fans into evangelists, all while cultivating a vibrant virtual community.

Read more:
The Web Marketing Universe
On the Right Path
Best of Charlotte Website Design
The “No Duhs” of Social Media
10 Principles of Trustcasting in the Web Marketing Universe

Be yourself or be nothing at all

It’s a mantra worth repeating: People follow people, not companies.

PR done right in today’s marketplace is about people. Cultivating a fan base and creating rich relationships with your public requires that you drop the corporate mask and be a real person.

The public has no affection for the face of corporate America. No one wants to see standard form-letter responses and press releases on Facebook, Twitter and the like.

You must stop being corporate and start representing your brand on a personal level. Be real, flaws and all. Be prepared to be honest through and through. Share your time, your action and your help. Be present every day – accessible and responsive – without fail.

If you try to play it safe and fabricate a personality that shows the world the face you want the public to see, this artifice will be found out quickly. No one will invite you back to the conversation. In fact, you will be banned from the conversation.

By contrast, engaging in real relationships creates fans. Fans are more than just loyal customers; they are brand evangelists that do your marketing for you.

Read more:
The Cult of Personality (Part 1)
The Cult of Personality (Part 2)
Breaking Boundaries

The Age of Tribes

Behind every major movement and successful marketing engine there is a tribe.

What is a tribe? Simply put, it is a group of people that connect around a common goal, shared passion, similarities in background or a need for solutions to improve their lives.

The facts are simple: if you want to grow and thrive in today’s marketplace, you must identify, become a member of and lead the tribes that are relevant to your business and your bottom line.Your organization, your business operations and your products or services must be shaped by and around the tribe.

Tribes are ready and waiting for the next big thing that is going to solve their problems, meet their needs or make their lives better. If you’re the one that delivers that idea, they’ll rally around you, spread your message like wildfire and fan the flames of your success. The power and influence you command as the leader of your tribe is unrivaled by any form of traditional advertising.

Read more:
Tribes in Today’s Marketing
Mastering Tribe Marketing
Shaping Business for the Tribe

Following the leaders

If you need living proof that the rules have changed, look no further than the Fame Foundry Podcast. Each month we spotlight the people and companies who are leading the way in setting new trends and redefining how business is done today.

Take, for example, best-selling author and video blogger extraordinaire Gary Vaynerchuk. When it comes to the gospel of personal branding, there is perhaps no one so well qualified to preach as Vaynerchuk, who has not only turned his family business into $60 million-a-year wine empire but has cultivated a following of more than 100,000 for his daily video blog.

For a true testament to the power of Twitter, we introduce you to Comcast’s Frank Eliason – the man behind the Internet’s most advanced social media-based customer service program. Eliason has achieved the impossible by lending a human voice to the cable giant and transforming formerly dissatisfied customers into brand evangelists.

Then there’s the inspiring story of Amélie’s French Bakery in Charlotte, N.C., which defied the unfavorable odds of launching a new restaurant in the midst of an economic downturn by cultivating a reputation for authenticity and a fiercely loyal community of ardent evangelists.

Perhaps you are sold on the importance of social media platforms like Facebook and Twitter, but you’re still dubious of the value of viral video. Meet self-proclaimed “Internetainers” Rhett & Link, whose reputation for creating highly popular video content has brought major brands like Cadillac, McDonald’s, Coca-Cola and Starburst to their doorstep.

Read more:
Gary Vaynerchuk: Profit from Your Passion
Comcast’s Frank Eliason: Creating a Better Customer Experience One Tweet at a Time
Amélie’s French Bakery: Staying True to Success
Rhett & Link: The Business of Viral

More to come

The revolution is far from over, and Fame Foundry is just getting started. Keep reading for more intelligence on the new rules for business growth and what it takes to compete in today’s marketplace.

---

The Web Marketing Universe

Confusion about successful web marketing is rampant. Even for those in marketing, there's an ongoing war to maintain clarity about how the web universe works and how successful web marketing is executed today. Building an outperforming web platform is very much like building and running a retail store whose primary objective is providing a product or service.

• The store must be attractive, have a good location and be unique to attract visitors.
• The store’s layout, personnel and operations must serve the customer and make the sales process as easy as possible.
• The experience must promote the visitor to return to the store.
• The experience must transform the visitor into a customer.
• The experience must provoke visitors to tell others.
• The experience must promote customers to become repeat customers.

And while the foundational recipe for a successful website is very similar, getting there is completely different. Life happens faster online. While visitors peruse a physical store, website visitors “use” an online store. They can leave just as easily as they walked in. Their attention spans are much shorter, and their tolerance for a confusing layout or arduous pathways is low. There are no roads leading to the Internet storefront. The idea of “getting there” is completely different. The straightforward “location, location, location” mantra is replaced with a myriad of new approaches and considerations to gain the foot traffic you need to be successful online. So, from the never-ending minutia of terminology, buzzwords and techno-jargon, let’s clear the air for once and get some things straight about what makes a successful web marketing machine.

Metrics

Before anything is done, before the first photo is taken, before the first line of code is written, you must take account of what you know. In the web world, everything is in the numbers. From the unaware prospect to the loyal return customer, all possibilities and measurements must be mapped out within the sales continuum. Where do your customers come from? How much does the average customer spend with you in a year? How much is spent to gain one customer? What has your past advertising and marketing efforts yielded? Who are your repeat customers? Why do customers come back? Why do customers leave? Are you doing everything you can to measure all elements that directly and indirectly affect sales? There is much inventory and soul-searching in identifying your metrics. You must be honest about what you know and what you don’t know. You must be critical and able to grade yourself. Doing the homework here will not only guide the purpose of all your web marketing efforts, but also allows you to measure your return on investment, make adjustments and out-perform your competitors.

Utility

In the vastness of the Internet, there are two classes of websites: the digital brochure and the utility site. Most websites are the first kind––the online equivalent of a printed flyer. Yup, all the computing processors, memory, software, hardware, power and communication lines for people to read the same information that they would get from a brochure. The brochure site states its case, makes its pitch and then its done. That’s what many companies do with their brands on the Internet, and their website’s performance is a reflection of it. Your website needs to be useful, not just informative about your primary business objective. Many websites waste inordinate amounts of time and money promoting a site with no utility. Its visitors see no reason to return, and it dies right there. The precious opportunity to turn a casual visitor into a return visitor—the web version of true branding—is sadly wasted. Your website needs to find its place on the Internet. It needs to be known for something. Awareness and traffic on the web is cumulative, and all the time used to gain a visitor is wasted if the site is not worth bookmarking, sharing, remembering or revisiting. To achieve this, you must be prepared to invest in your site’s utility. You must have an offering to the public at large, without the visitor needing to be a customer. Your website needs to find its place on the Internet. It needs to be known for something.If you sell lawn fertilizer, offer a lawn care calendar for the visitor’s geographical area, e-mail alerts on care stages, free weekly lawn care tips and write a regular article. Create a place the visitor can count on, all the while promoting your brand and selling your product or service. Comparative shopping listings, mortgage amortization calculators, games, a “rare word of the day” and “your lawn care tip of the week” are all beginnings of utility for a website. If your competitors are already introducing utility in their online store fronts and developing a reputation for having a website that’s worth returning to, then you have something to worry about. Don’t wait until then. Up the ante and don’t waste another visit to your site.

Content

Many times the utility of a good website resides in the content it offers. Now this is where many websites have an identity problem. Most view their website’s static “brochure” text regarding their product or service as the website’s content. It isn’t. Content has purpose and application to the visitor beyond your primary offering. It may not apply to everyone, but it needs to be content that your audience wants to read, see, play, view, hear and interact with. Content has been and always will be king. As a result, the content maker is king. Believe it or not, writers are usually the single most important factor to the successful website core. If your website features piano playing tips in video form, then the video producer owns the role of king. Don’t regard your website as a one-time sales pitch. Invest in content and the long-term rewards will be exponential.

The idea

The challenge of utility and content represents the stage where the good idea is born. If your website doesn’t present any reason for a visitor to return, then it’s useless. Your website’s success is based on its core concept. What is it going to offer people? What is its reputation going to be? What about your content is going to make people talk about it, forward its web address, bookmark it, share it and most important, what is going to make people come back to it? This is where a good web development firm shines. The responsibility of your web development firm is to make sure the idea around your utility and content is sound and executable. Web professionals work hard to stay abreast of what the Internet landscape—and all competitors—provide. They know what people want, what’s lacking, where the opportunities are and where to drill for maximum gain.

Presentation

You’ve got your idea, you’ve found your niche, you’re creating great content––now we can talk about building a beautiful and functional website. Crafting a superstar website is its own discipline. Professionals that build memberable websites master a craft that is like no other. Once again, the Internet’s vast array of possibilities and potential are the reason so much more must be considered. Take, for example, reading a magazine. The magazine contains a catalog of content. It employs the simple interface of a table of contents, page numbers and the action of turning the pages—that’s it. In contrast, a website has multiple dimensions and depth. It does more than display your content—it’s functional. It stores content, catalogs it and queries it. It reacts. It allows for conversation and builds community. Your 24-hour Internet house is, in short, a working engine that must reflect your brand proudly, be functional and easy-to-use and run itself without you in the room. Your website is a working engine that must reflect your brand proudly, be functional and easy-to-use and run itself without you in the room. But with great power comes great responsibility—in design and function. It’s very much like building a unique, first-of-a-kind car from the ground up, combining art and precise engineering into a beautiful, functioning machine. There is a metric ton of considerations in any given website, right down to the psychology of choice. As a result, there are many amateur web designers, but very few great web builders. Still, many companies rely on traditional marketing agencies who see web development akin to the linear development of print material, television commercials or radio spots [see our article on the fall of traditional marketing companies]. In other cases, some companies employ a single individual––usually a programmer or a designer––to build a competitive website that in reality requires experts from many disciplines. Both of these extreme approaches to web building leave a trail of failed websites littered around the Internet landscape. The memorable and over-performing website requires a unique and specific combination of expertise from an array of web professionals, all working in concert on the details and all joined together on the big picture. That doesn’t mean you need teams of people working around the clock, but you will need portions of their knowledge and interactive specialties to craft it the right way the first time. In fact, the right way costs less upfront and makes your investment that much more powerful.

Traffic Building

You’ve established a good foundation with your web marketing strategy and metrics; you’ve got an online building that’s both beautiful and very useful; now the focus turns to building foot traffic. While the traffic building plan is part of the web marketing strategy, its execution is on an ongoing basis. The exact strategies and tactics for traffic building are different for each business, brand, product or service, and covering all the possibilities would be beyond the scope of this article. Effective traffic building, however, depends on one key element: the relation of a website’s utility and content to the community at large. Food for thought: In the beginning, you will start with any traffic. However, the public does reside with other websites. Those other websites have provided a platform for community. There are an endless number of online communities on everything from aardvarks to zucchini that people bookmark, remember and participate in––weekly, daily, hourly. You need to be there too. Identify those spots and begin participating in them. Be real and helpful. Promote your brand when appropriate, and promote your personality in the process. Link to some of your good content. Extend an offer outside your primary objective. Create and build a reputation. Again, there’s more to this than a simple example can convey. Simply put, there must be regular engagement with the public outside of your website. People engage with companies through the best form of advertising: word-of-mouth. The Internet just sets that on fire.

Visitor-to-Customer Conversion

The science and art of converting a visitor into a customer is unique to each web marketing plan. It begins with identifying, marking and sometimes even coding-in conversion points within the site. Conversion points can be the creation of an account, the point at which a product is sold, the submission of a contact form or the making of an appointment. The array of possible conversions are unique to the business; however, they tie directly to the bottom line. This is where the experienced web development agency brings metrics back into play. All efforts in traffic building and advertising are mapped; traffic from websites, search engines and other sources are cataloged; traffic is tracked to conversion points within the site; analysis is taken and actions to improve traffic and the rates of conversion are continuously implemented. Such complexity is beyond the expertise of traditional marketing firms or the one-man-band.

Getting Started - The Big Picture

Yes, at first glance this is a lot to take in. That’s why it’s important to interview your marketing firm to make sure they not only recognize the web marketing universe, but that can also execute on it and show results. We’re here to help. Call or write us. We promise to answer all of your questions in a straightforward manner and help you understand it all. If you’re already engaged or under contract with another firm, at least ask your firm—and yourself—the tough questions:

• What is the plan?
• Why will people come to your website?
• What will keep visitors coming back?
• What will make visitors tell others?
• What will convert visitors to customers?
• How is it performing?

And most of all: What will make people fans of your website? This is ultimately the goal of any web marketing campaign, and it's indicative of any superstar website. From local dentists to international corporate brands, anyone can reach the apex of online marketing, win more customers and gain market share for less money. Remember: fans do the marketing for you.

---