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.

---

Keep it Social

Human communication is complex. The words that you use, the tone and volume of your voice as well as your body language and facial expressions all play a role in how your message is received by those that you are communicating with. A poorly chosen phrase or a simple misstep in your body language can steer a conversation into unexpected, and unintended, territory. In an age when so much of our communication has now become digital, the challenges have become even greater. Many of the social cues present in face-to-face interactions are all but impossible to convey. Body language and facial expressions are a non‐factor, and tone is as hard to express as it is easy to misinterpret. As a result, when communicating online, achieving clear understanding of meaning and intention comes down to the words that you use and how you use them.

Social communication

In today’s Digital Age, social media plays a pivotal role in the way companies communicate with their customers. But with the proliferation of social platforms – from standard bearers like Facebook, Twitter, LinkedIn and Google+ to niche sites like Pinterest, Instagram, Flickr and Foursquare – it’s easy to become overwhelmed by the task of managing your brand’s social presence. As a result, it’s tempting to find ways to automate this communication in order to save time and resources. This is exactly the solution that I discussed recently with a vendor who was promoting a platform that would automatically broadcast updates to dozens of social media sites each time a blog post, news release or similar content was published to our website. Rather than spending the time to post this content to each of our social profiles individually, this tool would do it all for us in one quick shot. While this may sound like a dream come true, the problem is that it is a blunt instrument-style approach to communication: every profile gets exactly the same update at the same time. But the reality is that not all social media sites are the same, and neither are the audiences that use them. The way you communicate with connections on LinkedIn should differ from how you do so on Facebook. Similarly, the content you’d publish on photo-sharing sites like Instagram, Pinterest or Flickr is completely different from the updates you’d post to a micro‐blogging site like Twitter. Each site has a syntax specific to that particular social media platform, and ignoring that syntax greatly compromises the effectiveness your communication. You absolutely have something to lose – the opportunity to connect with your audience in a meaningful way. Some might argue that since the posts are automated, you’ve got nothing to lose by trying this approach, but that is incorrect. You absolutely have something to lose – the opportunity to connect with your audience in a meaningful way. And that lost opportunity could cost you dearly if the tailored messages of your competitors reach your potential customers where your robotic, automated communications miss the mark or, even worse, alienate your followers. In the end, while automation will save you time, it does so by taking away your ability to customize your message for specific audiences and platforms.

Be social, be specific

Stepping back from social media for a moment, think about human communication in general. We change the way that we speak and the messages that we send depending on who our audience is. You speak to your friends differently than you speak to your family. You communicate with co‐workers and peers differently than with clients and customers. Effective interpersonal communication requires an understanding of how best to convey your desired message to those you are speaking with. This is not something you could ever automate; it requires a human touch. When it comes to communicating via social media, the medium and the methods may be different, but the basic underlying principal remains the same: to be effective, your message must be tailored to the audience that will receive it. Although the channels themselves may be digital, you can’t eliminate the human element. For an example of how different messages should be tailored to different platforms – and why not every update is right for every social media profile you manage – let’s take a look at how my company shares our news and announcements. When we acquire a new certification or receive recognition that’s worthy of a press release, we promote that accomplishment on sites like Linkedin, Twitter and Facebook where followers naturally expect to see updates about what’s going on with our company. In each case, we use the specific syntax and conventions of that site – such as hashtags on Twitter – to make sure those updates are in a format that audiences are familiar with and can easily find. We do not, however, share content like this on sites like Flickr or dribbble because those platforms are visual in nature, and these particular announcements have no meaningful visual component to them. If instead we are publishing an update about a new website project that we are launching for a client, we will again post that announcement to Linkedin, Twitter and Facebook, but we will also add updates to social media sites that are more visual in nature because, for this update, we do have good image-based content (i.e., a screenshot of the new design) that can accompany the post. Each time we post an update to social media, we consider the nature of the content to decide which sites are most appropriate for those updates. Additionally, each social media post that we make uses the specific syntax of that social media platform.

Forget trying to do it all; focus on doing it right

The concept of automating your social media communication is only an attractive option if you are trying to publish content to so many social media sites that doing so has become unmanageable drain on your time. If this is the case, the solution isn’t to find a way to automate the work; it’s to streamline your activities to include only those sites that are a good fit for your needs. Trying to use every single social media site available to post as much content as possible is not a sound strategy. Why? Because social media platforms are overrun with self-promotional content that is irrelevant to audiences, and users of these platforms are quickly becoming conditioned to tune out this static. Sending automated updates to dozens of sites at once, without ever considering whether or not those updates are appropriate for those sites, just adds to this problem. Is that how you want your company’s news and announcements to be perceived – as part of the useless glut of social media updates? So if taking the time to individually update dozens of social media profiles for your company is not the answer, and automating those updates is also a no‐go, then how can you use social media to effectively communicate your organization’s message? The first step is to speak with a professional team that can help you establish an appropriate social media strategy – one that suits your brand and fits into your overall marketing plan. That team can help you identify which social media sites your audience is actually using and what types of updates you should send to each platform. They can also help you develop a rhythm for social media updates – one that you will be comfortable executing on a regular basis. By identifying the right sites for your organization and understanding how to use those sites effectively, you can capitalize on the power of social media to grow your brand and your business.

Case in point: KLR

KLR is a large accounting and business consulting firm headquartered in New England. In developing their social media strategy, they realized that while their target audience does likely use Facebook (after all, who doesn’t at this point?), they do not use that platform to search for the types of high‐end accounting and business planning services that the firm offers. As a result, promoting their services to that audience on that platform would be inappropriate, and their content would fall on deaf ears. Instead, KLR uses sites like LinkedIn and Twitter, where they have built a network of business connections that recognize them as thought leaders in their industry, to promote their services. Does this mean they turned away from Facebook altogether? Not at all; rather, they determined a more effective use for the platform: communicating with current and prospective employees, including interns whom they were looking to attract to the firm. Recognizing that college-age students would absolutely be using Facebook to research potential employers and positions, KLR decided to use their Facebook profile to showcase their company culture and their standing as a “Best Place to Work” for eight years running. By evaluating different social media sites, which segments of their audience (if any) are using those sites, and how they can most effectively convey their messages across that landscape, KLR has made the most out of the time they spend managing their social media presence.

A final word

Social media can be invaluable in its role as an open line of communication between your company and its customers. However, it can also be one of the surest ways to waste time and resources if you don’t have the right strategy in place. Make sure you’re getting the most from your efforts by contacting a digital marketing specialist to discuss your company’s needs. Together, you’ll be able to define your company’s voice and bring a human touch to your social media strategy.

---

Don’t Fear the Reviewer

Does the idea of allowing your customers to rate your products on your website make you uneasy? If so, it’s time to reverse your thinking: don’t fear the reviews; fear what their absence is costing you. Here are four reasons why encouraging your customers to post product ratings will not only strengthen their allegiance to you but also help you capture more sales:

Break through the trust barrier

As we established previously in our article on the culture of the Web, the Internet collective harbors an inherent mistrust toward all corporate entities, and unfortunately for you, retailers are no exception to that rule. On the other hand, peer validation is everything. No matter what you do or what you sell, if people love it and vouch for you, you’ll be strongly positioned for success. In the absence of this corroboration, you face a significant burden of proof to overcome the natural skepticism of the collective. What does this mean for you? You can spend hours meticulously crafting eloquent descriptions for each and every product you sell, but they will never carry the weight of a review that one of your customers spends five minutes to dash off. Reviews demonstrate that you stand behind your products and you have nothing to hide.Fair? Perhaps not. True? Absolutely. It’s all about trust. However, when it comes to trust, you actually get extra credit for the very fact that you do empower your customers to publish their feedback on your site. For new visitors who may not be familiar with your brand or your reputation, these reviews are a badge of transparency that demonstrate that you stand behind your products and you have nothing to hide.

Tip the scales in your favor

Online shopping is a fact of life in today’s world. However, as commonplace as the act of buying on the Web has become, there is always still a lingering hint of uncertainty that resides with customers because they cannot see, hold and judge an item for themselves before committing to the purchase and paying the associated shipping costs. This effect is multiplied for certain types of merchandise like clothing and shoes. I may know that I generally wear a size 11 running shoe, but when deciding between different brands and styles, how can I tell whether my chosen shoe will run true to size, offer the level of cushioning I desire and be comfortable for a five-mile jog? The last thing you want in this situation is for me to give up and go to a bricks-and-mortar store where I can try before I buy, even if it means paying a bit more for that luxury. This is where customer reviews can save the sale by providing the reassurance I need to feel confident that the particular shoe I have selected will meet my expectations.

Turn your customers into salespeople

Returning once again to the qualities that define the culture of the Web, one of the fundamental characteristics of the Internet collective is their compulsive need to share. As a result, when someone buys something that they love, it’s practically second nature for them to talk up their purchase on sites like Facebook and Twitter. This tendency is all the greater when they can boast about a particularly unique find or an especially good bargain, as they seek the approbation of those in their social networks. It’s the virtual equivalent of taking a girlfriend along on a shopping excursion and having her ooh and ah in approval over your selections. Why not give your customers a soapbox to exercise their habitual need to share on your own site, where their opinions can help persuade other shoppers to purchase the same product when it is right there in front of them, just one click away from landing in their cart? One of the most effective customer review systems we’ve encountered is on gap.com. Not only does Gap allow customers to provide thorough evaluations of each item in their own words, but each product can be rated on several different criteria, including overall sizing, fit through the arms, chest and shoulders as well as the type of occasion for which the item is best suited (i.e. work, going out, etc.). If the prevailing sentiment among reviewers indicates that a shirt runs small or tends to shrink in the wash, I know right away to order a size larger than usual, and I can feel certain that I won’t regret this decision when my order arrives at my doorstep. Furthermore, let’s say I’m a little iffy on whether or not to buy a pair of pants based on how they look in the photographs. Rave reviews from those who have already purchased and worn the same item can provide the tipping point that will persuade me to add them to my cart. Detailed and informative reviews give shoppers the confidence boost they need to complete the transaction.As these examples demonstrate, not only will detailed and informative reviews give shoppers the confidence boost they need to complete the transaction, they can also provide enticement to splurge on additional unplanned items. As a result, chances are good that you will yield a greater number of conversions as well as an increase in the total amount of each sale.

Do your own market research

Your customers buy products from you. Inevitably, those customers have opinions about their purchases. If only you could benefit from knowing what their opinions might be. It just so happens that you can, and you don’t have to spend a boatload of cash on a consumer research study to do it. When you invite your customers to post their reviews of your products on your site, you not only open a direct line of communication, but you also send a clear message that you care about what they have to say. Open a direct line of communication with your customers.Better yet, because it is up to the customer to take the initiative to provide their feedback and they can do so with relative anonymity, you can be confident that you are receiving their honest and unfiltered opinion – much more so than if you tried to solicit a response face-to-face or with a formal survey. Although these reviews do not represent a statistically accurate sampling of all your customers, they can be instrumental in revealing insights that can be invaluable in helping you shape your product offering to better meet their needs. Even when you’ve done your homework and made your best effort to provide a great selection of high-quality products that align with your customers’ interests and concerns, there’s nothing like the candid reassurance of those customers to let you know that your instincts were right. You might even find an unexpectedly strong preference for a certain type of item over another, in which case you can consider expanding your offerings in that category. But wait! What if the feedback you receive is negative? You should be equally appreciative of the opportunity this creates to go back to the drawing board and figure out better ways to give the people what they want. Maybe the response is “I like this, but I really wish it had more of that.” Without reviews, this sentiment might never have come to light, and your customers might have just silently drifted away, leaving you wondering where they went and why. Or perhaps your reviews alert you to a problem that emerges when a product is used over a prolonged period of time or in a particular set of real-world conditions. Even the best quality control efforts can’t forecast and circumvent every potential pitfall, but armed with this knowledge, you can take proactive measures to address the issue and make it right.

Open the door to greater success

If you’ve made the investment in creating a smart, user-friendly e-commerce store, why not seize the opportunity to yield the most from that investment by adding functionality that can multiply your sales? If you’re not sure where to begin, let Fame Foundry’s expert web development team help you develop a customer feedback module that is custom-tailored to fit your brand, your product line and – most importantly – your customers.

---