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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How to Pick a Fruitful Marketing Strategy: Three Juicy Takeaways from Walmart’s “Picked by Farmers" Campaign

Recently, Walmart has launched a series of video spots they call “Picked by Farmers, Guaranteed by Us,” featuring the farmers who grow and supply their produce. Each of these vignettes focuses on one individual farmer and one specific variety of fruit or vegetable. Additionally, each spot is centered around one of three themes: the personal story of the farmer and his experience working with Walmart (“Growers’ Stories”), helpful tips for how to select, store and prepare a particular type of produce (“Tips from the Farm”) or Walmart’s money-back guarantee. At first glance, these spots seem rather simplistic. There’s no trendy music, no rail-thin models indulging in the products, no Hollywood-worthy camera tricks or special effects. After all, we’re not selling iPads or BMWs here. But delve below the surface, and you’ll discover true marketing genius at work. Let’s look at the three core principles that make this campaign powerfully effective and how you can apply the same concepts to your own marketing strategy:

1. Serve before you sell.

Of course, these spots are designed to sell produce. As Walmart continues to take a bigger bite out of the grocery market with the aggressive expansion of its “Neighborhood Market” and “Walmart Express” concept stores throughout the country, they need to make sure that consumers think of them as their go-to destination not only for tires and diapers but also for tomatoes and dairy products. However, in the “Tips from the Farm” series, Walmart eschews using an overt sales message in favor of providing valuable, relevant information to their customers to help them make better buying decisions. For shoppers, there’s nothing more frustrating than spending their hard-earned dollars on fresh fruits and vegetables only to get home and find that their watermelon has no taste or their tomatoes have a mushy texture. With this understanding in mind, Walmart offers helpful tips on how to select, store and use these items to help their customers make the most of their grocery budgets (Don’t wash your strawberries until you’re ready to use them! Don’t put your tomatoes in the refrigerator! Pick an avocado with a firmness similar to the palm of your hand!). And who better to give this advice than the farmers who have dedicated their lives to understanding everything there is to know about these crops? To apply this principle to your own marketing strategy, think about your area of expertise and how you can put your inside knowledge to work to help your customers. For example, let’s say you own a home renovation business. Any homeowner who has undertaken a remodeling project knows how quickly all of the choices they must make can become overwhelming. Give these potential clients a hand by producing a series of videos that explain the advantages and disadvantages of different materials for countertops or flooring or showcase trends in lighting and other decorative fixtures. You’ll likely find that by dishing out a little free advice, you can earn major trust points with potential customers.

2. Be human.

One of the criticisms most often launched against Walmart is that it’s a big, unfeeling corporate giant with no face and no heart. But the Growers’ Stories spots show us that behind the Goliath, there are many Davids, and when we buy watermelons from Walmart, we’re actually buying them from third-generation farmer Jack Wallace in Edinburg, Texas. And we’re buying tomatoes from Scott Rush in Florida and strawberries from Mike Ferro in Oxnard, California. These are honest, hard-working Americans who care deeply about putting a quality product on your dinner table. The lesson here is this: Branding is important, always. But your company must be more than a brand. It must be human through and through. Whenever possible, you should remind your customers that they’re working with a team of people who are passionate about what they do, driven to exceed expectations and honestly apologetic if and when mistakes are made.

3. Counteract your brand’s vulnerabilities.

To sell anything – whether it’s a tomato or a tablet or a total kitchen remodel – you first must overcome the psychological objections of your customer. The current trend among foodies is the local food movement, which is focused on buying and using fresh, locally sourced ingredients. As cited previously, one of Walmart’s biggest branding challenges is their perception as the enemy of Main Street and the nemesis of the Mom-and-Pop. Therefore, Walmart is the antithesis of all things local, right? Not necessarily. As their Growers’ Story spot on tomatoes demonstrates, Walmart partners with small farmers around the country to distribute locally grown produce to nearby stores. And, in the end, if a customer is not satisfied with the quality of the produce, they can get their money back. The combined effect of these two messages is that Walmart has implicitly defended itself against a commonly held negative perception about its brand while negating any risk for customers in giving their products a try. What can you take away from this approach? Every brand has its weaknesses. While you don’t want to explicitly acknowledge these vulnerabilities, at every step along the way in the sales process, you should be aware of the red flags and concerns that might be giving your customer pause, and proactively counteract those inhibitions by providing  helpful (and true!) information that will help them make a confident buying decision.

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The Next Evolution of Social Media Integration

A few years ago, when brands first began wading in to test the waters of the social media pool, the concept of social media integration was very straightforward and simplistic: add icons linked to your company’s social media profile pages on your website, and consider the job done. The message to visitors was, “Like what you see here? Please come join the conversation happening on our company’s social outposts!” And as brands continued to jump on each new social bandwagon that came along – YouTube, Pinterest, Instagram, etc. – the once-standard three buttons became four, then four became five and so on. Shortly thereafter, brands discovered the benefit of serving content across multiple sites in the name of message continuity. The advent of social media management tools like Hootsuite and Tweetdeck set this activity on fire, as marketers began exploiting newly available scheduling tools to republish content to all their profiles with the click of a single button, with no regard for tailoring their message to the culture and syntax of each platform and audience. And this run-of-the-mill, low-quality content made its way back to these companies’ websites as embedded Twitter and Facebook feeds – all in the name of integration. And customers noticed. Actually, everyone noticed. Because this robotic, efficiency-driven method of social media integration began to strip these platforms of their primal social element — the very reason why sites like Facebook, Twitter and Instagram are so popular in the first place. So with a little push from Google, Bill Gates’ postulation, “Content is King,” became every marketer’s buzz phrase. Companies began pouring big dollars into developing relevant, original content in every arena, from sharable blog posts and traffic-driving SEO landing pages to viral videos — each fighting for a just few fleeting seconds of consumers’ precious attention. As companies started to find their footing, they realized success in social media demands integration through and through – not at the superficial level of icons and links but at the very core of a company’s business growth efforts. Rather than treating each marketing medium (e.g., television, radio, email, pay-per-click, social, etc.) as existing within its own self-contained silo, social should be seamlessly interwoven throughout the brand’s marketing initiatives in ways that are a natural fit with how real customers think, behave and make decisions. When done well, social media integration steps inside and outside the four walls of the Internet fluidly, supports customer engagement while maintaining the social integrity of the platform and, inevitably, drives sales. Here are a few excellent examples of companies who are doing it right by today’s standards:

Well that’s Pin-teresting

Recently, Banana Republic sent out an email blast that combined the best of social media, direct marketing and e-commerce into one cleverly crafted campaign. Subscribers to the company’s mailing list received an email message featuring images of customers’ most-pinned styles. Within this email was a link that took recipients to a dedicated landing page on the brand’s own website where they could shop these looks, creating a direct, distraction-free path between email, website browsing and checkout, greasing the gears for a quick and easy purchase decision. Smartly, Banana Republic executed these promotional efforts in the other direction, too. Their Pinterest profile includes a board of most-pinned styles, each of which of course links directly to the item featured in the pinned image for interested buyers to purchase from the website. This creative campaign not only integrates the company’s social media, email and e-commerce efforts, it also capitalizes on a key psychological motivation for the fashion-minded by giving them insight into what’s on their fellow shoppers’ wish lists so that they, too, can be seen sporting the season’s most-wanted looks.

Tweet to eat

If you’ve got a fanbase that’s actively engaged in talking about your brand on social media, it begs the question: how can you take advantage of their promotional activities to reach a broader audience? The answer: integrate your social media campaigns into your traditional marketing efforts. Case in point: Panera’s highly successful #PaneraFaves campaign. Over the past several months, Panera Bread has been encouraging customers to share photos of their favorite menu items on Facebook, Twitter and Instagram – providing added incentive by giving those who participate a chance to win Panera gift cards. While this initiative provides great value on its own by prompting fans to promote the brand to their own friends and followers, Panera has taken this campaign to the next level, running national TV spots that feature these #PaneraFaves tweets and pics. The strengths of this TV campaign are multifold, as they position Panera not only as a brand that pays attention to its customers and their opinions but one that is well loved by those customers, too.

Add it now, buy it later

In May 2014, Amazon launched a feature that lets Twitter users add items directly to their Amazon cart simply by typing a hashtag. First, the user must connect their Twitter account to Amazon. Then, anytime they see an Amazon product link on Twitter, replying to that tweet with the hashtag #AmazonCart — or #AmazonBasket in the UK — adds the product to that user’s shopping cart, where it will be ready and waiting for them to purchase at their convenience. This stroke of marketing genius essentially turns Twitter into a retail pipeline for Amazon, extending the reach of the e-commerce giant beyond its own website to the social hubs where its customers live and talk about products day in and day out. In doing so, Amazon is also wisely fending off the rising threat of social networks transforming into social commerce outlets in their own right. While there is still a learning curve for customers and a few technical kinks to work through, Amazon’s “add it now, buy it later” concept clearly has tremendous potential to shape the future of social commerce.

As seen on TV

Also in May 2014, TaylorMade partnered with Chirpify, a marketing conversion platform, to host a live sweepstakes for their SLDR S golf club during the CBS broadcast of the PGA Byron Nelson Championship. Using their #actiontag (#DistanceforAll), anyone could enter for a chance to win the SLDR S or a trip to the US Open. According to Chirpify, “55 percent of people who saw the message on TV and responded to the sweepstakes on social completed the registration.” This 55 percent conversion rate is nothing to scoff at. It means social is no longer limited to merely reflecting engagement. Instead, it can be used as a clear and defined component of the sales funnel — exactly the kind of approach to and innovative use of second screen and social that defines the next stage of evolution in social media integration.

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