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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Shaping Business for the Tribe

Previously, in our articles Tribes in Today’s Marketing and Mastering Tribe Marketing, we explored how the marketplace is represented by countless networks of people who are connected by a common interest or goal – known as tribes – and how successful business growth is rooted in attaining leadership in those tribes and putting the principles of trustcasting into practice. Now we shift our focus to an outside-in examination of how the influence of tribes extends beyond promotion to shape how today’s businesses operate and evolve.

The old way

For any organization large or small, achieving a thorough understanding of its target market has always been fundamental to growth and long-term success. However, the task of gaining this knowledge has historically been a difficult process. It required a significant and ongoing investment of time and resources in fact-finding through surveys, focus groups, opinion polls and demographic studies – all in the name of formulating a more detailed profile of the customer, their attributes, their needs and their preferences. But in the same way that old advertising has been rendered ineffectual in today’s consumer-centric marketplace, these types of market studies have likewise become obsolete. Such disconnected, impersonal methods of information gathering are often too skewed, too broad or based on too thin an audience segment, ultimately falling short in delivering the depth of insight needed to engage in meaningful, trust-based relationships with the customer. More importantly, these outmoded forms of market research are not taken seriously by the majority of participants and thus fail to elicit the honest, thoughtful responses needed to understand what they really want, what truly drives their decision making and what actually motivates them to action. However in today's tribe-driven marketplace, the answers are right there in front of you.

Know thy customer, the tribe way

Simply by being an active participant in the tribe, you will gain an intimate understanding of your customers.If there is one thing that tribe marketing affords today's business, it is the ability to identify, engage and lead the community of customers that exists around it. You must understand that your tribe represents your customer base. While every one of your customers may not be active in the tribe, its membership is a reliable sample of all customers – especially those that can be the most passionate evangelists for your business. Therefore, attaining membership and demonstrating leadership in your tribe gives you invaluable access to your customers. Simply by being an active participant in the tribe, you will gain an intimate understanding of your customers, their lifestyle, their wants, their dislikes and their needs. It’s a deceptively simple concept: earn your place in the tribe by being one with its goals and serving its interests, and you will achieve unparalleled insight into the marketplace where your customers exist because you yourself are a part of it. However, it is then that the real work begins.

Listen, learn and integrate

When you’re a member of your tribe, you will be exposed to brutal honesty. The tribe is not there for you; they are there for the tribe. They will discuss their issues candidly and openly. They will likely complain and may at times be crass. This is not the type of polite, shallow input you receive from a survey or a customer comment card that is filled out hastily under the watchful eye of the clerk at the front counter. These are real issues being voiced by real people with real needs. You must be prepared to have your feelings hurt and develop a thick skin. However difficult it may be, it is important to absorb these opinions in their most raw form. If you’ve made the investment in earning your place in the tribe, you can take this process one step further and engage its members in your business operation. Let the tribe know what you are doing. Ask for feedback. Ask for honesty. Ask what’s wrong and how you can do better. Whatever you do, don’t attempt this unless you are a bona fide member, or you’ll find yourself being ignored, being fed ineffectual information or even being ousted from the tribe for conducting market research as an outsider. Ultimately, the benefit of being in the presence of such brutal honesty is that it often brings to light problems or weaknesses within your organization as well as untapped possibilities for growth. These may come in the form of an employee that they dislike, a product feature that they hate, an inconvenience you should correct or a void in the marketplace that is ripe for a solution. You may even find bigger issues to address: Maybe your product isn’t what’s needed. Maybe it needs to evolve. Maybe you need to rethink everything. Whether big or small, the problems and obstacles that you uncover by listening and engaging are invaluable to long-term success when you use what you’ve learned to direct the evolution of your organization in order to continue growing with your tribe.

Letting go and following the tribe

As the one charged with growing your organization, you’re probably used to doing things your way. However, if you are going to serve the needs of your tribe, you must take a step back and re-examine every aspect from the perspective of its members. You must not only preach the mantra, “The customer is king,” but live it through and through. You must not only preach the mantra, “The customer is king,” but live it through and through. It’s important to understand that your tribe represents the loudest, most opinionated and most critical subsection of your customer base. The honest, unfiltered information to which you have access as a member of this inner circle allows you to make changes to your product or service that will satisfy your most demanding customers. If you can placate these early adopters, loyalists and core users, then you will be ahead of the curve in not only meeting but exceeding the needs of your greater customer base. Should you give them what they want, they will wave the flag for you, giving you invaluable PR and unbiased word-of-mouth marketing the likes of which no amount of money can buy. This is not to say that you should make sweeping changes to your products, services, operations or processes based on the fleeting whim of each and every vocal customer. Quite the opposite is true, in fact. This is about getting to know the whole of your tribe – identifying the desires, problems and goals that are common to the greatest number – and applying your own ideas and innovation toward reshaping your product or service offering to provide solutions that address these needs.

Setting your tribe on fire

People instinctively long to be a part of something meaningful. Another aspect of reshaping your business around your tribe is finding a way to inspire them. The members of your tribe have the greatest potential to become your most ardent evangelists, but only if you can connect with them on a deeper level. People instinctively long to be a part of something meaningful. They crave outlets that allow them to engage in their passions. They are ready to carry the torch for those who they see doing good. Let’s say you own the corner coffee shop. Who is your tribe, and what is it about your offering that inspires them? Perhaps your tribe is made up of people who are passionate about organic or fair trade coffee. Or maybe the atmosphere of your store represents the culture and sophistication of urban lifestyle, and that’s what excites them. It could be that your tribe feels strongly about patronizing locally-owned businesses, and you offer Charlotte’s best coffee, so they find meaning in supporting your shop with their dollars. It’s possible that inspiring your tribe will require you to tell a story that’s greater than your direct product or service offering. Perhaps the members of your tribe are highly attuned to social and political issues that affect their community. Let’s say you decide to raise $50,000 this year to support local charities that assist homeless families, and you pledge that 25 cents from every cup of coffee you sell will be applied toward that goal. People will be proud to be seen carrying your cup because of who you are and what you do. The logo on that cup then becomes the secret handshake for the members of your tribe. There’s no advertising campaign, no marketing gimmick and no customer rewards card that can rival a tribe that is inspired. If you attach greater meaning to what you do, you give your tribe a reason to shout your message from the rooftops and proudly embrace your identity as part of their own. In this way, you’ll become more than a brand, you’ll become a revolution.

Tribes crave ideas

If you find that what you’re doing doesn’t light a tribe on fire, it’s time to invest in the white space of creating ideas. Today’s business is idea-based. Great ideas require a willingness to take a risk, to challenge the status quo and to do something revolutionary. This runs counter to traditional business thinking, which tends toward minimizing risk whenever possible. However, a tribe-driven marketplace has no tolerance for those who play it safe. Apple has sold two million iPads within the first 60 days of launch in the midst of an economic downturn because they hit on an idea for a new category of mobile device that set their tribe on fire. Great ideas require a willingness to take a risk, to challenge the status quo and to do something revolutionary. Amélie’s in Charlotte has achieved monumental growth because they took a concept usually found in much larger metropolitan locations – a 24-hour authentic French bakery and cafe – and brought it to a tribe of urban foodies that were primed for something new and different. Bucking conventional restaurant industry wisdom about the necessity of turning tables quickly, they instead welcome the members of their tribe to stay and linger, transforming their offering from a commodity to a culture and winning a following of loyal and vocal evangelists as a result. Tribes are ready and waiting for the next big thing that is going to solve a problem, meet a need 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.

There’s no shame in being small

The downfall of many small businesses when it comes to advertising and business growth is trying to act like a large business in order to increase their perceived legitimacy and trustworthiness in the eyes of the customer. However, in today’s tribe-driven marketplace, small businesses actually have a clear and distinct advantage. In fact, more and more, it is the large business that is trying to emulate and keep pace with the local mom-and-pop operation. Trust is earned when real people connect with real people. It is very hard for a large corporation to be real to anybody. In fact, when it happens, it’s because they have found a way to provide the level of personal service and engagement with the tribe that would typically be expected of a small business. In today’s tribe-driven marketplace, small businesses actually have a clear and distinct advantage. AT&T tried this with “Seth the Blogger Guy.” Recognizing that they couldn’t just run ads saying that they were working on the problem, they crafted a fake persona to represent AT&T to its tribe. They thought presenting customers with an unassuming-looking character on a first-name basis with the audience would be sufficient to cultivate trust-based relationships. This is false tribe leadership, and tribes are not so easily fooled. Conversely, Frank Eliason of telecommunications giant Comcast has established a customer service program that offers the kind of highly personalized touch that would ordinarily be more characteristic of the neighborhood florist. He has built a reputation for approaching problems with a genuine passion for resolving problems and following through on what is promised to achieve a positive outcome. As a result, over time people have given Frank and his team their trust, and they trust Comcast more as a result. Another great example is Mellow Mushroom – a very successful pizza restaurant chain with sales in the millions. However, their success is due in no small part to the fact that when you enter a Mellow Mushroom, nothing – from the menu to the decor to the staff – resembles a chain. They have identified their tribe, and they are catering to it. If Mellow Mushroom suddenly decided that they needed to look more sophisticated, more polished and more corporate, their tribe would quickly abandon them and follow the next place to come along and offer the casual, unrefined ambiance of a college dive bar. In this way, there is great possibility for small businesses. Your tribe inherently expects you to be real and to be personal, and as a result, they are predisposed to trust you. Don’t fall into the trap of trying to force your organization to be something it’s not. Remain focused on listening to your tribe and molding your operations around what you see and hear as an active member of your core customer base.

All for the tribe

The facts are simple: if you want to grow and thrive in today’s marketplace, your organization, your business operations and your products or services must be shaped by and around the tribe. If what you have to offer doesn’t fit your tribe, you have an obligation to listen to them, identify their needs and grow your business in that direction. If a competitor does it before you, you’ll be facing a mountain that’s immeasurably harder to climb.

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Website Design for a Multi-Device World

The array of devices through which people interact with online content is larger and more diverse today than ever. To underscore the point, try this little exercise – take a look around your house and find every device you own that can access the Web. For me, the list looks like this:

• Desktop computer
• Laptop computer
• Netbook computer
• iPod touch (x2, each a different generation)
• iPad
• Kindle (x2, each a different version)
• Android phone (HTC EVO)
• Gaming system (wii)

Each of these devices has a different screen size, and the experience of accessing web content is different on each.

That’s why, if you want to ensure that your website will provide an experience that truly engages your audience, it must be designed specifically for this multi-device world in which we all live today.

The multi-device user

The multi-device world is populated by multi-device users. While a staggering variety of devices are, indeed, being used to access web content today, it’s also important to remember that the same user is often using multiple different devices to access your website – and they expect that site to work well regardless of which device they happen to be using at the time.

To illustrate this point, let’s consider the scenario of an average everyday activity that occurs on the Web: mom planning the family vacation.

As she starts her day, she does a quick search on her iPhone and starts to peruse a few sites that strike her interest as she enjoys her morning coffee. Later she takes advantage of her lunch break to continue her research. She visits many of the same websites as she did before, this time reading more and delving deeper each one now that she’s seated comfortably in her chair behind her desk and has more screen real estate to work with. That evening she shares her findings with the family, flipping between sites on her iPad as they unwind on the couch. In each instance, she visits many of the same sites, and she expects them to perform just as well no matter which device she has in front of her.

More than just mobile phones

You have likely been introduced to the concept of “mobile websites” and have been told that your company needs one, but as the scenario above illustrates, the multi-device landscape encompasses much more than just large desktop monitors and small handheld phones. There are many devices and screen sizes in between, and your website must be equipped to work well on all of them. That’s why a separate “mobile-only” site is not the best way to serve the needs of the multi-device user.

A mobile-only solution relies on technology that detects when your website is being accessed via mobile phone and redirects the user to a completely separate version of your site – one designed specifically for the typical screen size of a smartphone. These mobile websites often feature less content and fewer features in order to minimize both navigational complexity and load time.

The problem with the mobile-only approach is that it only addresses the needs of one specific type of device. Large desktop computers get the “normal” browsing experience while mobile phones get a smaller, more streamlined version.

But what about the multitude of devices that fall between these two extremes? How do we serve them effectively?

Going responsive

There are a number of deficiencies with a mobile-only approach, but the inability to serve today’s broad array of devices is the most detrimental.

If the mobile version of your website offers less content and fewer features than your desktop site, you run the risk that a user will be looking for content that you have decided to eliminate from your slimmed-down mobile site. This is a problem, because when a user comes to your site looking for something specific and they can’t find it, their natural response is to go looking for it somewhere else – which usually means your competitor’s site.

After all the effort your put into attracting users to your website, anything that drives them away – like a user experience that is not optimized for the device they are using – runs counterproductive to your goals. So how can you embrace this multi-device world and ensure that your website can succeed in it? It’s time to go responsive.

What is responsive web design?

Responsive web design is an approach that has gained much favor and momentum in the web industry in the past few years – in part because it offers a solution to many of the limitations that mobile-only websites face.

A responsive website is one that intelligently rearranges its layout based on the size of the user’s screen. For instance, let’s say your site normally presents its content in three columns. The smaller a screen gets in size, the more problematic this layout can become, as the columns become so narrow that their content is unreadable and their buttons are un-pressable.

With responsive design, when a visitor is using a tablet in portrait mode or a laptop with a very small screen, those three columns reflow into a two-column layout that is better suited to the dimensions of those screens. For handheld phones, the design shifts to a single column of content with text and links that are large enough to be easily read and touched even on a very small screen. In this way, you have one website that “responds” to the multi-device user, adjusting its layout based on the particular device they are using – hence the name responsive design.

The benefits of responsive design

Efficient maintenance

It’s hard enough to keep one website updated with timely, relevant content; updating content across multiple websites is even more challenging.

When you go the mobile-only route, you end up with multiple websites to maintain. With a responsive approach, however, you have only a single website to manage. This makes it easier to keep your content consistent, because anytime you make a change to your website, that change is seen by all visitors regardless of the device they are using.

Zero gaps

As we saw earlier, supporting the multi-device user means being able to accommodate more than just large desktop screens and small handheld devices.

A responsive web design approach does indeed address these two extremes, but it also fills all the gaps in between, adapting its layout to perform seamlessly on the widest range of screen sizes and devices possible. This is especially helpful for those users that jump from device to device, as described earlier, because the site will adjust to their needs and present them with a consistently good experience regardless of their choice of device.

Adaptability

Because a responsive website design will reflow based on the screen being used to access it, your website will be equipped to support not only those devices that are popular today, but also those that we don’t even know about yet.

As new devices are released – some of which will undoubtedly also introduce new screen sizes or resolutions to the market – you can rest assured that your responsive site will do its best to present an optimal experience by “responding” to whatever type of screen it might be presented with.

Go big

While much attention is paid to how your website will handle smaller screens such as those on smartphones, there is another end of the spectrum to consider: large devices.

A responsive website can not only reflow its layout to present an optimal experience for small screens, but it can also do the same for very large screens. Large screens are often neglected in website design because even sites that are engineered for desktop monitors are not built to suit many of today’s widescreen displays. However, a responsive approach can allow your site to stretch its legs a bit in order to better fit bigger screens, making use of the additional space to better communicate your organization’s message.

Cost effectiveness

Since responsive design means you need only a single website, deploying this approach can often be much more cost effective than developing separate websites for different devices. This cost effectiveness is compounded further over time as you save the added expense of having to update, maintain and host separate sites for desktops, mobile phones, tablets, etc.

The challenges of responsive design

While there are a number of advantages to responsive design, there are a few challenges as well.

First, responsive design is not a feature that you can simply tack on to your existing website. To be done right, a responsive approach requires you to redesign and redevelop your site from the ground up so that responsive logic can be built into every aspect.

Another challenge of responsive design is that, if not done properly, it can result in loss of performance for users on devices where bandwidth is a concern. Often the small-screen version of a responsive design does away with some of the elements that exist solely for aesthetic purposes (large background images, for example). When such elements are “turned off” for smaller devices, if not configured properly, they might still be sent to the device anyway, meaning those devices are required to download excessive and completely unnecessary data that negatively impacts performance. To avoid this pitfall, make sure you’re working with a team that’s experienced in responsive design and has the technical expertise necessary to ensure that your site tailors both its layout and performance to deliver an optimal experience for any device.

Embracing the multi-device world

Traffic to websites from devices other than desktop computers has risen dramatically in the past few years, and industry analysts predict that number will continue to soar in the coming years. Looking at the hundreds of websites that I help maintain and manage, I am seeing an average of about 30 to 35 percent of all traffic coming from mobile devices of one kind or another and even a few sites where mobile traffic is nearing 50 percent.

As we head toward a future where more than half of our website traffic will come from visitors not using a traditional desktop computer, now is the time to ensure that your website is armed to compete effectively in a multi-device world.

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