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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Tweet, Snap, Share, Post, Pin: Five Creative Ways to Get Your Customers to Do Your Marketing For You

Today’s digital age is also the post-advertising era. Armed with access to nearly limitless data and information, customers have grown disengaged from commercial culture as we once knew it and disillusioned with canned corporate marketing messages.

This is especially true of the latest generation of consumers – the Millennials (aka Generation Y). Encompassing roughly 72 million young Americans, the oldest of whom are now reaching their mid-30s, the Millennials represents the most educated, diverse, technologically proficient generation ever in the U.S., with tremendous spending power that is expected to eclipse that of the Baby Boomers within the next three years.

Another hallmark of the Gen Yers is that they have a strong aversion to "push" marketing and prefer brands that are engaging and already embraced by their friends. According to Christine Hassler, author of 20 Something Manifesto, “Friends are the biggest influencers for Gen Y. If their friends have something and endorse it, that's all they need.”

All of this evidence points to an inescapable fact of doing business in today’s culture of the Web: nothing holds greater sway than word of mouth. If you want to grow – and especially if you want to capture the up-and-coming Millennial dollar – you need the help of your customers and fans.

However, these customers and fans aren’t simply sitting around, waiting at the edge of their seat for the opportunity to promote your products and services. It’s up to you to get the ball rolling by structuring campaigns that reach your customers where they live (i.e., social media platforms) and give them opportunities to share that tap into their motivations and fit naturally with their habits and lifestyle.

Here are five creative ways you can leverage social media to connect with your customers and get them to do your marketing for you:

1. Solicit their stories.

Sometimes spurring your evangelists to spring to action is as simple as asking them to. After all, who doesn’t love sharing stories about themselves?

Everyone can agree that medical supplies is hardly a highly glamorous field. However, Medtronic Diabetes, which develops and sells diabetes management products, has achieved a 2-to-1 return on investment for their entire social media program based on the success of their Share Your Story Facebook app.

Since launching the app in June 2013, nearly 300 customers have shared stories and photos using the app, and over 80% of users have opted to allow their photos and stories to be used by Medtronic Diabetes in other ways. To maximize the mileage they get from this great user-generated content, Medtronic is also proactive about contacting those who have shared their story to participate in photo shoots, video testimonials and guest blogging.

When Steve, a Facebook community member, posted a photo from his 2012 wedding using the app, Medtronic followed up with a request to guest post on their blog, “The Loop,” which the company started as a forum to foster discussion about living with diabetes. Steve happily complied, penning the article “Getting Hitched With Diabetes: The Groom’s Perspective,” which they reposted on their Facebook page.

Key to Medtronic’s success is that they are very specific in the framing of their request. When the company first launched its app, the prompt asked users to share “moments in your life of living well with your insulin pump or continuous glucose monitor,” but they found that the majority of participants would write only one or two lines. In March 2014, they retooled the wording to say, “Share with us your personal story about the pivotal moment you switched to the pump and CGM, and how insulin therapy has helped you focus on the wonders of life,” and they discovered that this more specific request elicited much more rich and detailed tales from their customers.

While you might wonder why Medtronic’s customers are so eager to share their stories, Amanda Sheldon, director of digital marketing and communications, explains: “We know our customers and know that they like to support each other. Our hope that social media would bring this all together was definitely met.”

2. Share the spotlight.

As the relentless onslaught of the selfie has shown us, social media is the ultimate “Look at me!” medium. Tap into your customers’ love of all things me-centric by creating a campaign founded in giving them the opportunity to shine a spotlight on themselves – and on your products in the process.

Clothing brand Free People has come up with an ingenious way to integrate customers' Instagram shots with its website. The company has begun attaching individualized hashtag information cards to its jeans. Customers are encouraged to take pictures of themselves in the pants, tag them either with #myfpdenim or more specific tags for different jean styles (such as #fpanklecrop for the 5 Pocket Ankle Crop or #fpsorbettiedye for Sorbet Tie Dye Jeans). These photos not only appear on Instagram but also on the relevant product’s page on the company's website (after being approved by site moderators, of course) in a special section called "Free People's Style Community."

This brilliant campaign succeeds on two levels. First, by designing a platform that turns their customers into models, Free People has created the ultimate indulgence for the selfie-aholic. Second, they overcome an obstacle that has plagued e-tailers since the concept was invented, which is giving shoppers the confidence to make a purchase without being able to see, feel and try on the product in person. But now, through the magic of Instagram and social sharing, Free People empowers potential buyers to see how a pair of jeans looks in real life. Win-win!

3. Give to get.

Sometimes, you need to be willing to give a little bit in return for the great promotional juice your customers are providing to you. Often brands use contests as a way to motivate fans to snap, share or post in exchange for the chance to win a prize.

However, prizes certainly aren’t the only way to incentivize your followers. An even better way is to share your time and expertise. For example, Zappos – a company that has built its reputation on providing exceptional customer service – has created a forward-thinking Instagram campaign that is the perfect marriage of its trademark service and customer engagement.

Capitalizing on the popular #OOTD (“outfit of the day”) hashtag – which has more than 23 million images attached to it – the online retailer has launched a pilot program for a personalized shopping service called NextOOTD. When a customer posts a selfie with the hashtag #nextOOTD, a Zappos stylist will comb through their Instagram history and respond with personalized shopping recommendations catered to their unique style.

This campaign is social media engagement at its very best. First, it’s easy for customers to participate in. By building on the already familiar #ootd hashtag, it’s a natural extension of a well established habit for Instagrammers. Second, it’s personalized: this concept of selfie shopping allows Zappos to interact with people like a human, not a brand, which is exactly what every company should aspire to do on social media. Finally – in perfect keeping with Zappos’ mission of delivering happiness – it’s a great way to surprise and delight their customers, especially the type of selfie-wielding fashionistas who are most apt to use the #ootd hashtag in the first place.

4. Bank on bloggers (and other influencers).

Here’s an interesting fact for you: Research has shown that one-fifth of the consumer population is composed of key influencers who impact the purchasing activities of 74 percent of the population.

Chief among these influencers are the legions of bloggers and vloggers who have masses of dedicated followers hanging on their every word. If you can put these prominent opinion-pushers in your corner, you can turn the power of word-of-mouth marketing up to 11.

Blue Apron is a new start-up subscription service that delivers meal kits – including pre-measured ingredients and recipe cards – in refrigerated boxes on a weekly basis to its members.

According to Ken Fox, one of the company’s investors, Blue Apron’s target market is comprised of “People who like to cook at home but don’t always have time for shopping,” and their hope is that these people “discover the ease of cooking with Blue Apron [then they] start to do it more often, and to get their friends and family members into it, too.”

And who could fit that profile better than mommy bloggers – specifically Katie Bower of the hugely popular blog Bower Power? Katie has nearly 15,000 followers on Facebook and more than 25,000 on Instagram, so needless to say, there is no lack of moms (and other busy women) who identify with her and look to her for great ideas and advice. And as it so happens, Katie also recently gave birth to her third son, so she has no lack of demands on her time.

For the price of a sponsored post, Blue Apron reached all of her followers in the form of a glowing review written with Katie’s trademark candor – along with a series of fun images depicting the process of receiving the box, unpacking its contents with her adorable boys, preparing the meals and enjoying the dinners together as a family.

The end result is a testimonial that is 100 percent authentic – and 100 percent more effective than anything the company could have said about itself in a perfectly polished ad campaign.

5. Create a marriage of mediums.

All of this talk of social media posting, hashtagging and sharing begs the question: how can you take advantage of your fans’ promotional activities to reach a broader audience that includes those who don’t follow you on these networks?

The answer: integrate your social media campaigns into your traditional marketing efforts. Case in point: Ben & Jerry’s wildly successful #CaptureEuphoria contest.

In 2012, Ben & Jerry’s tapped into its Instagram community (which at the time numbered 120,000+ strong) to cast the starts of its latest ad campaign. The company invited fans to post photos tagged #captureeuphoria that they felt depicted intense feelings of joy. From sunsets to wedding photos to cute dogs to beach scenes, these user-submitted snaps were collected into a special gallery on the company’s website.

One interesting thing you’ll notice about the contest: there was no requirement to feature the company’s products in the photos. Rather the idea was to associate the emotion of euphoria with the experience of eating Ben & Jerry’s ice cream – very clever indeed.

At the conclusion of the contest, more than 25 shots were selected and featured in hyper-local media in the winners’ hometowns in ads that popped up in locales ranging from billboards to buses to neighborhood bars.

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The Who, What, When, Why and How of Successful Email Marketing, Part I

In today’s social media era, email marketing is hardly the newest, most popular kid on the block, but it still remains a powerful weapon in any marketer’s arsenal, as it’s a highly efficient and cost-effective way of communicating with your existing customers as well as new prospects. It’s also simple to execute. With options ranging from online services like MailChimp, Constant Contact and Emma to customized, cloud-based platforms that can be integrated with your CRM system, you can easily create and manage your own email marketing campaigns. It’s not all sunshine and rainbows in the land of email marketing, however. Because of the low barrier to entry (specifically the aforementioned cost and ease of use), many companies dive right in without fully developing a sound long-term strategy. Yes, getting started with email marketing is easy, but doing it well is what will make the difference between a campaign that captivates and motivates versus one that is ignored and condemned to the trash folder. In this two-part series, we’ll cover the fundamentals of successful email marketing – specifically what you should be saying, how you should be saying it, when and why you should be doing so, and to whom you should be speaking.

The Who

Taking these points in reverse order, let’s start with the who. When it comes to email marketing, the quality of the list of recipients to whom your campaign will be targeted is a make-or-break factor in its ultimate success. There are no shortage of companies that are all too eager to sell you lists of addresses. However, even if these are “opt-in” lists of people who are supposedly willing to receive such emails, a purchased list will always be far less effective than one you have assembled yourself. People who have interacted with your business before – even if their encounter was as brief as a visit your website or your trade show booth – are much more likely to want to hear from you again and, as a result, will be more receptive to your message. To provide you with an example, I have recently done some email marketing work for a company that runs a series of zombie-themed adventure races. Participants sign up to run these 5k races and be chased by actors dressed as zombies, while others sign up to be the zombies doing the chasing. The company does use email marketing but not to find new participants; those generally come via word-of-mouth, social media sharing and advertising links from other websites. Instead, they rely on email marketing solely to communicate with people who have already signed up for a new race and those who have participated in the past. The messages that are sent either provide important logistical details for upcoming events to registrants or advertise future races and promotions of interest. Because all recipients are already familiar with the company, these emails are not perceived as an unwanted inbox intrusion. Rather, they are welcomed as valuable and welcome communication from an organization with whom they have already established a relationship. As a result, the company’s email blasts are typically opened by over 60 percent of recipients, and some boast open rates in excess of 80 percent. Anyone who has ever done any email marketing with tell you that an open rate of 60+ percent is incredible. By contrast, the expected open rate for a campaign to anonymous recipients on a purchased list is 5-10 percent at best. The difference is clear: people who recognize and appreciate your brand are more likely to open your emails. They are also more likely to read your message and take the action you desire.

Beyond open rates

While the percentage of people that open your email is an important metric to consider, it isn’t the only statistic you should concern yourself with. It’s also to critical to examine how many of those who read your message take the next step and engage in some fashion, such as by clicking on a link. Someone who simply opens your email, gives it a quick cursory glance, then immediately deletes that message is not a success story. Yes, they clicked on the email, and they will be counted in your open rate statistics, but they did not engage with your company in any meaningful way, and they will likely forget about you as soon as that message hits the trash heap. By contrast, someone who knows your company and has interacted with your business in the past will not only be more inclined to open and read your email but to take action after they have read it, whether that comes in the form of visiting your site to read the full text of a blog article or press release, downloading a whitepaper, registering for an event or making a purchase. And isn’t that the ultimate goal? After all, you’re not going after simple opens; you want people to take steps that further solidify their relationship with your business, and a better quality list will yield these more meaningful results.

Quality over quantity

Let’s look at some numbers: if you email 10,000 people whose addresses were purchased and who have no prior connection to your business, you will get a fairly low open rate – say 5% (a common figure for these types of lists), which means you should expect that only about 500 of those 10,000 people will actually open your message. Next, we take a list of contacts that you have careful curated over the years from customers you have done business with and connections you have made. The list will certainly be smaller – let’s say only 1,000 names in total. If you see an open rate of 30% (which is about average when you look at open rates across all industries), about 300 people would open your message. Yes, you would get more opens from the bigger list, but again, quantity does not mean quality! The majority of those 500 opens from the purchased list will junk the email immediately, while very few will engage in any way. By contrast, the 300 people who opened the email in our second example will, in the end, yield a much higher rate of engagement, which is the true measure of a successful campaign.

The Why

Even if you are communicating with contacts who know your company and have done business with you before, you cannot violate the cardinal rule of trustcasting, which holds that any and all efforts dedicated to the promotion of your business must be founded in building trust. When it comes to email marketing, the way you build trust is by demonstrating to your recipients that you respect their time and attention. Never send a purely self-promotional message; only communicate if you have something of real value to offer them. That value can come in any number of forms, whether it’s a great discount offer or a highly informative bit of content. Of course, the recipient’s perception of value is tied closely to the frequency of your communication. Email too often and you will become an annoyance, no matter how great your offering is. At best, people will begin to ignore your emails or see them as white noise. At worst, they will unsubscribe from the messages altogether. On the flip side, if you do not reach out often enough, you run the risk of slipping out of sight and out of mind. The trick is to find the balance between these two extremes by devising a plan that allows you to email frequently enough to provide value but not so often that you become a bother. Establish a schedule for your emails that will act as a guideline. I use the word “guideline” for a specific reason here – because this schedule should be flexible and not written in stone. If you insist on sending out an email blast simply because your schedule dictates that it’s time but yet you don’t have anything of true value to communicate, your emails will be ignored because while they will be reliable, they will not be important. Again, the schedule is just a guide; you must use your judgment as to whether it’s right to send an email or whether it’s best to wait.

A case study in scheduling

During the first week of every month, my company sends an email to our entire list of contacts featuring all of the events that we have scheduled for that month. Because we run upwards of 10 or more events each month, it would be impractical to send a separate email promoting each one (that would quickly put us in the “annoying” category). In addition, we also send two different newsletter-style emails – one that goes out to our clients on a monthly basis and one that goes out to our partners and vendors on a quarterly basis. However, there have been many months where we do not have enough relevant, valuable content to justify sending a newsletter to our clients. If this is the case, we simply skip that particular month. For our vendors, who already receive our emails with less frequency, we usually delay our blast by one month rather than let an entire quarter pass with no communication. In both cases, whenever we decide to skip a planned release, we make a concentrated effort to find something of value to send the following month to ensure that we stay on the radar with our readers. In addition to these regular emails, we sometimes send important, time-sensitive communication, such as service disruption alerts based on planned downtime or impending storms. In the event that circumstances necessitate sending these one-off emails, we adjust the timing of our other monthly blasts accordingly to ensure that we do not send too many emails within too short a timeframe. As this example shows, each month may be slightly different in its execution, but with a sound plan in place, you can make sure that you maintain an ideal balance of timely, non-intrusive communication.

The When

As with almost every form of marketing communication, timing plays a key role in determining whether your message is received. There are many conflicting reports on what day of the week and time of day are optimal for sending email blasts, but here are my findings based on extensive experience: Mondays and Fridays are the worst weekdays to send emails. Unless there is an urgent reason why you need to send your communication on one of these days, it’s best to avoid them altogether. This trend is easily explained, as inbox traffic tends to be exceptionally heavy on Mondays, and by Friday, everyone is primarily focused on tying up loose ends before the weekend. Instead, I find that mid-week emails (Tuesday through Thursday) have much better open and engagement rates. When it comes to the time of day, I have found that early is better than late. Emails that land prior to the start of the business day – say at 6:00 a.m. – seem to perform best. These emails greet readers in their inbox as soon as they arrive at the office (or during breakfast if they are checking email prior to heading in) and seem to perform better than ones sent even just a few hours later. And as a general rule of thumb, blasts sent in the morning outperform those that are sent after lunch or towards the end of the workday. When scheduling your next email blasts, I recommend planning an early morning, mid-week delivery, but within this window, try playing around with some different day/time combinations to see which ones work best for your particular audience.

More to come

So far we have taken a look at the quality of the recipients to whom our campaigns are sent and we have solidified a strategy for when and why to send them to ensure that we do not overwhelm those recipients with messages that are unimportant or unnecessary. In the next installment of this series, we will explore the remaining two fundamentals of email marketing success – what we will say and how we will say it.

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