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.

---

Remarketing: A Second Chance at Love

Consider this bit of classic situation comedy:

Guy meets girl at a laundromat.

Girl gives guy her number.

Guy accidentally washes the receipt she wrote it on.

All hope of love is lost.

The poor schlep. If only he had a second chance, right?

Fortunately for him, we’re all familiar enough with TV tropes to know that their story doesn’t end there. Fate will intercede to bring them together again, and all will be well.

Fortunately for you, the story of you and your prospective customers can have a similar happy ending.

In many ways, marketing is like dating. There’s an initial introduction, followed by a period of wooing to secure their digits (or email address or mailing address or Facebook “like,” as the case may be). Every step – and every hour and every dollar spent – along the way in nurturing that relationship is designed to keep things moving through the proverbial funnel to greater levels of commitment until you arrive at a proposal (call to action) and the resulting commitment (conversion).

But what if, in spite of your best efforts to get your customer to the alter (the checkout or contact form), they lose interest, forget you exist (ouch!) or, worst of all, go AWOL before clicking “submit”? Like the guy in the laundromat, you need a second chance.

Enter remarketing – the fairy godmother of sales.

Reunited and it feels so good

As we’ve covered previously, there are plenty of things you can do both to optimize your chances of converting a new customer and to minimize the odds that a shopper will walk away from their cart mid-session.

Inevitably though, despite your best efforts, some prospective buyers will simply fall through the cracks. They might decide they need more time to consider their purchase, or they might be pulled away from the computer by one of the many distractions of daily life. Whatever the reason, unlike our friend in the laundromat, you don’t have to rely on fate to reunite you. You have more than a damp blank receipt in your pocket; you have the ability to deploy remarketing.

In principle, remarketing is not rocket science. It’s exactly what it sounds like: reaching out once again to someone who has already responded to earlier marketing efforts and engaged with your brand on some level. Essentially, it’s preaching to the converted – or nearly converted – if you will.

More specifically, remarketing uses information collected about a visitor’s activity on your site (e.g., viewing a product page, adding a product to their shopping cart, etc.) to put your brand and your products in front of them again via a highly targeted follow-up message that’s customized based upon parameters relating to the actions they took while on your site.

Typically, this follow-up is executed in one of two ways: either by pushing ads for your products out to other sites they visit as they continue browsing or by sending an email message directly to them if their contact information is available to you. These ads and emails typically feature tailored messages and images designed specifically to re-engage the prospect in the action they previously abandoned based on information collected about their browsing activity.

The nitty gritty

How on earth does this work?

What’s happening behind the scenes is that a code snippet provided by your analytics resource of choice (e.g., Google AdWords) is embedded into the source code of strategically selected pages of your site.

This code then places a cookie into the browsers of those who visit such a page on your site, assigning specific information about their visit. These cookied visitors are skimmed off into a new “audience” within your analytics and sent customized ads over advertising networks known as Demand Side Platforms (DSPs). Google AdWords is the probably the best known DSP, but there are a host of others out there, many of which claim to specialize in remarketing. Alternately, recipients of remarketing may instead receive automated, custom-tailored emails if that visitor has previously provided their contact information to you.

The proof is in the ebelskiver

Let’s consider an example that’s close to home (pun intended). My wife recently visited the Williams-Sonoma website in search of a special pan required to make her latest obsession: tiny filled pancakes known as ebelskivers.

She located the tart-maker on the site but did not select the option to “Add to Basket.” Within a few hours, she received the following email (because she had registered to receive updates from the company previously, they already had her email address on file):

The “Buy Now” button embedded within this message took her directly back to the page for the product, just one convenient click away from purchase.

“Hello, Clarice.”

One word of caution: as with any marketing strategy, you must always implement this tactic in ways that show respect for your customers and reinforce – rather than undermine – the trust they have in your company and your brand.

Overly eager DSPs will promise to make it rain, but there’s a fine line between a gentle reminder and creepy stalking – or “cookie bombing”.

A retargeted ad that reminds a visitor that they have items remaining in their shopping cart is a courteous customer service gesture. Bombarding them with the same ad for days or weeks will come off as a much more self-serving ploy that’s likely to cost you not only the potential sale that’s currently on the table but any future business from that customer as well.

---

The Five Types of Brand Evangelists

There’s no more valuable asset to the growth of your business than your brand evangelists.In today's culture of the Web, there’s no more powerful form of marketing than word of mouth. As a result, there’s no more valuable asset to the growth of your business than loyal customers who talk about you, sing your praises and disseminate your content through their networks. If you want to set the word of mouth around your brand on fire, you must identify the core motivations within your fans that spur them to action and give them ways to carry your torch that cater to their passions and personalities. Below we’ve profiled the five types of brand evangelists, what drives them and how to put them to work for you:

The Opinionater

The Opinionater wants to be heard. They have opinions about everything, and they want to share them with whomever will listen. They are the bloggers, the commenters, the reviewers, the frequent tweeters and Facebook status updaters.

How to put The Opinionater to work for you:

The most basic level of engaging The Opinionater is providing outlets for them to express their ideas and insights. Let them review your products or services on your website. Share interesting, original content regularly on your blog, Facebook and Twitter, and allow them to comment and debate. However, if you really want to make the most of The Opinionater’s potential as an evangelist, you have to go further. Social media has stripped away the barriers between customers and customers, so put this to your advantage by soliciting The Opinionater’s input on what they like, what they don’t like and what they want to see more of. Starbucks does this in a very sophisticated way on their “My Starbucks Idea” website, where fans can submit suggestions and requests for everything from drinks and merchandise to community involvement. However, you can achieve the same outcome in a less structured fashion simply by asking your followers on Facebook and Twitter for their opinions. To keep the The Opinionater loyal to your cause, it’s important to reassure them that these ideas are being heard. Respond to their comments, recognize their great ideas publicly and let them see their suggestions in action. They’ll feel invested in helping you because they’ll feel like they are a part of your success. If they feel like no one’s listening, you’ll not only risk alienating them, but you might find that suddenly you've got a very vocal critic on your hands.

The Informer

The Informer likes to be first in the know so they can be the one to spread the news. You know them as the email forwarders and the Facebook friends who are always sharing links to articles and videos. It’s important to The Informer to get credit for being ahead of the pack. In being the first to disseminate information within their network, they’re able to take ownership of the ideas being presented as if they were their own.

How to put The Informer to work for you:

Give them access to exclusive information that makes them feel like an insider. The Informer loves to join mailing lists, so be sure to offer an email opt-in on your website and send out regular newsletters with timely news, tips and offers. Let The Informer have the inside scoop on trends and sales, and you’ll set their forwarding fingers in motion.

The Fame Seeker

The Fame Seeker is driven by the allure of attention. They crave the spotlight and want to be celebrities within their own circles. They want to achieve their 15 minutes of notoriety in as many places around the Web as possible. They want to be the first to comment, or at least the one with the wittiest contribution that gets the greatest response. They want to see their name and their photo anywhere and everywhere they can get it, and they have profiles on multiple social media platforms.

How to put The Fame Seeker to work for you:

Recognition is the name of the game. Give them ways to participate in your community that are all about them, and then reward them for their participation. Call them out from the crowd, and you'll have a fan for life. NASCAR driver Ryan Newman’s Fan Club site is built around keeping The Fame Seeker engaged and active. Every member has the ability to share what’s most important to them – their photos, their videos and their opinions. Popular content is rewarded with points from other members, and the top points earners are elevated to a place of special prominence within the site on the fan club leaderboard.

The Trendsetter

The Trendsetter is constantly on high alert for what’s new and what’s coming next. They have a reputation within their circles as the one that’s always sporting the latest and greatest iteration of their obsession, whether it’s coffee, shoes, jeans, gadgets or cars. As a result, when they buy what you sell, it puts you immediately at the forefront of the tribe they belong to.

How to put The Trendsetter to work for you:

The task of putting The Trendsetter to work starts at the very core of your brand. You must position yourself as a company that’s always ahead of the curve. You must offer something genuinely special and unique to entice The Trendsetter to become your standard-bearer. Apple is the epitome of a brand that is in touch with The Trendsetter. Every new product they bring to the market is not only technologically innovative but impeccably designed. The iPad is a status symbol just as much as it’s a useful productivity tool. But you don’t have to compete on the same level as Apple to win over The Trendsetter. What you must do is earn a place in, listen to and respond to your tribe. When you can give them something that no one else in your niche can, it puts you on The Trendsetter’s radar. For example, let’s say you own a restaurant. What’s hot in the culinary world right now? The slow food movement. Create a special section of your menu dedicated to dishes made from seasonal ingredients sourced from local growers, and yours will be the restaurant that Trendsetter foodies all over town are suddenly talking about.

The Crusader

The Crusader is the torchbearer for the causes they believe in, and their loyalty runs deep because their passion is for the mission. They’re not interested in being seen wearing or carrying the trendiest label. They’re consumers with a social conscience that identify themselves with brand whose values and corporate culture inspire them.

How to put The Crusader to work for you:

Make them one of you. Give them a badge to wear that proclaims their belief in your cause. Arm them with information, tools and resources to be your advocate and help spread the word about what you stand for. TOMS is a brand of shoes with a simple mission: for every pair of shoes their customers buy, they donate a new pair of shoes to a child in need. On April 5, TOMS is sponsoring an awareness campaign called “One Day Without Shoes,” and they’ve enlisted their Facebook fans in the cause by creating an app that lets them share what they’ll be doing “without shoes” on April 5 and encouraging them to go “virtually barefoot” by using the campaign’s logo as their profile picture.

It’s time to hand over the megaphones.

Thanks to the evolution of social media and the culture of the Web, word of mouth is no longer an invisible phenomenon but a very public and powerful reality of today’s marketing. No matter the size of your company or the nature of what you sell, you have a powerful sales and marketing force in your customers, fans and followers. These loyalists are at your fingertips, ready and waiting to spring into action. All you have to do is provide the right tools and the right platforms, and you’ll reap the rewards of the trust they build on your behalf.

---