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.

---

Death by Liking

What if you create a good product that everyone likes? What if you keep feeding the demand by making more and more of that product? What if you maintain this endless rinse-and-repeat cycle with what you know works? What if you never stray from the safety of the familiar? How could you not be successful?

Blockbuster brands

Simple math will tell you that you will be successful for awhile – years, even – if enough people like your brand. Therein lies the problem: people like your brand. They choose your product when it's convenient for them. They tolerate it in the absence of a more appealing option. But what happens when you hit a bump in the road? What happens when a new competitor arrives on the scene? What happens when they realize they can live without you? Let's ask Blockbuster, shall we? For years, it was smooth sailing for Blockbuster. At the height of their success, there was a store on practically every street corner. People went there as a course of habit. Going to Blockbuster to rent a movie became as deeply ingrained in our routines as going to the grocery store or the dry cleaner. And it was good to be Blockbuster. That is, until Netflix happened. Suddenly, the idea of driving to a store and paying $4 to rent a movie for a few days didn't seem like such a nice convenience. Driving it back to the store according to Blockbuster's timetable wasn't so tolerable. People discovered they didn't like Blockbuster quite as much as they thought they did. One by one, the once ubiquitous blue and yellow signs started disappearing. No one cheered their departure. And no one felt the sting of their absence.

Apple brands

What if you create a product that some people love? What if those people tell everyone who will listen how great your product is? What if they are willing to seek out your product even when they have to pay more or drive farther to get it? What if they still choose your brand even when someone else comes along with an alternative that is cheaper, newer and flashier? The flip side of that coin is that there will be people who hate you. They'll align themselves with other people who share their hatred. Hating you will become their rallying cry. How do you survive when you've polarized the market? Ask McDonald's. Ask Starbucks. Ask Apple. Hardly anyone is just lukewarm about their fast food preference. For everyone who must have a regular Big Mac fix, there's someone else who will gladly give you an earful about why Wendy's is a far superior choice and they'll never set foot within 100 yards of a McDonald's. You could stage a re-enactment of West Side Story with the Jets who take pride in bearing the white cup with the green seal and the Sharks who feel their own smug sense of self-satisfaction in sporting the nondescript cup from the locally owned corner coffee shop. For everyone who evangelizes for Apple, there's someone on another message board tearing them to shreds. You don't even have to be a computer geek to have a dog in this fight. There's a reason the "I'm a Mac/I'm a PC" ad campaign resonated with people on both sides of the aisle. If you're a Mac, you're a Mac through and through, and you probably own an iPhone and an iPod, too. The Apple brand is part of your identity.

Make waves or drown treading water

Doing things as they've always been done is comfortable and safe. You're not going to offend anyone. But you're not going to inspire anyone, either. Everyone who likes you one day can be gone the next. But people who love you stand by you. In every industry and in every market, there is the opportunity to be a revolutionary. You don't have to invent the next iPad. You might just develop a network of trustworthy, reliable home maintenance professionals that can be reached with one call to one phone number and dispatched to solve any problem that might arise. You might start a car-buying concierge service that saves your clients the hassle and guesswork of negotiating a car deal. You might bring an authentic 24-hour French bakery and cafe to a mid-sized southern city. Everyone who likes you one day can be gone the next. But people who love you stand by you. Give the tribe of people who share a passion for what you do something meaningful to rally around. Show them that you understand them and you care about meeting their needs. Draw a line in the sand. Demonstrate what you stand for. Be equally proud of what you are and what you are not. Be bold. Be unapologetic. Be arrogant if that's what it takes. It shows passion. It shows conviction. It's better than being imminently forgettable. Let go of the safety net of liking. Make waves of love and hate. You'll make the choice for your customers an easy one every time.

---

The Web Marketing Universe

Confusion about successful web marketing is rampant. Even for those in marketing, there's an ongoing war to maintain clarity about how the web universe works and how successful web marketing is executed today. Building an outperforming web platform is very much like building and running a retail store whose primary objective is providing a product or service.

• The store must be attractive, have a good location and be unique to attract visitors.
• The store’s layout, personnel and operations must serve the customer and make the sales process as easy as possible.
• The experience must promote the visitor to return to the store.
• The experience must transform the visitor into a customer.
• The experience must provoke visitors to tell others.
• The experience must promote customers to become repeat customers.

And while the foundational recipe for a successful website is very similar, getting there is completely different. Life happens faster online. While visitors peruse a physical store, website visitors “use” an online store. They can leave just as easily as they walked in. Their attention spans are much shorter, and their tolerance for a confusing layout or arduous pathways is low. There are no roads leading to the Internet storefront. The idea of “getting there” is completely different. The straightforward “location, location, location” mantra is replaced with a myriad of new approaches and considerations to gain the foot traffic you need to be successful online. So, from the never-ending minutia of terminology, buzzwords and techno-jargon, let’s clear the air for once and get some things straight about what makes a successful web marketing machine.

Metrics

Before anything is done, before the first photo is taken, before the first line of code is written, you must take account of what you know. In the web world, everything is in the numbers. From the unaware prospect to the loyal return customer, all possibilities and measurements must be mapped out within the sales continuum. Where do your customers come from? How much does the average customer spend with you in a year? How much is spent to gain one customer? What has your past advertising and marketing efforts yielded? Who are your repeat customers? Why do customers come back? Why do customers leave? Are you doing everything you can to measure all elements that directly and indirectly affect sales? There is much inventory and soul-searching in identifying your metrics. You must be honest about what you know and what you don’t know. You must be critical and able to grade yourself. Doing the homework here will not only guide the purpose of all your web marketing efforts, but also allows you to measure your return on investment, make adjustments and out-perform your competitors.

Utility

In the vastness of the Internet, there are two classes of websites: the digital brochure and the utility site. Most websites are the first kind––the online equivalent of a printed flyer. Yup, all the computing processors, memory, software, hardware, power and communication lines for people to read the same information that they would get from a brochure. The brochure site states its case, makes its pitch and then its done. That’s what many companies do with their brands on the Internet, and their website’s performance is a reflection of it. Your website needs to be useful, not just informative about your primary business objective. Many websites waste inordinate amounts of time and money promoting a site with no utility. Its visitors see no reason to return, and it dies right there. The precious opportunity to turn a casual visitor into a return visitor—the web version of true branding—is sadly wasted. Your website needs to find its place on the Internet. It needs to be known for something. Awareness and traffic on the web is cumulative, and all the time used to gain a visitor is wasted if the site is not worth bookmarking, sharing, remembering or revisiting. To achieve this, you must be prepared to invest in your site’s utility. You must have an offering to the public at large, without the visitor needing to be a customer. Your website needs to find its place on the Internet. It needs to be known for something.If you sell lawn fertilizer, offer a lawn care calendar for the visitor’s geographical area, e-mail alerts on care stages, free weekly lawn care tips and write a regular article. Create a place the visitor can count on, all the while promoting your brand and selling your product or service. Comparative shopping listings, mortgage amortization calculators, games, a “rare word of the day” and “your lawn care tip of the week” are all beginnings of utility for a website. If your competitors are already introducing utility in their online store fronts and developing a reputation for having a website that’s worth returning to, then you have something to worry about. Don’t wait until then. Up the ante and don’t waste another visit to your site.

Content

Many times the utility of a good website resides in the content it offers. Now this is where many websites have an identity problem. Most view their website’s static “brochure” text regarding their product or service as the website’s content. It isn’t. Content has purpose and application to the visitor beyond your primary offering. It may not apply to everyone, but it needs to be content that your audience wants to read, see, play, view, hear and interact with. Content has been and always will be king. As a result, the content maker is king. Believe it or not, writers are usually the single most important factor to the successful website core. If your website features piano playing tips in video form, then the video producer owns the role of king. Don’t regard your website as a one-time sales pitch. Invest in content and the long-term rewards will be exponential.

The idea

The challenge of utility and content represents the stage where the good idea is born. If your website doesn’t present any reason for a visitor to return, then it’s useless. Your website’s success is based on its core concept. What is it going to offer people? What is its reputation going to be? What about your content is going to make people talk about it, forward its web address, bookmark it, share it and most important, what is going to make people come back to it? This is where a good web development firm shines. The responsibility of your web development firm is to make sure the idea around your utility and content is sound and executable. Web professionals work hard to stay abreast of what the Internet landscape—and all competitors—provide. They know what people want, what’s lacking, where the opportunities are and where to drill for maximum gain.

Presentation

You’ve got your idea, you’ve found your niche, you’re creating great content––now we can talk about building a beautiful and functional website. Crafting a superstar website is its own discipline. Professionals that build memberable websites master a craft that is like no other. Once again, the Internet’s vast array of possibilities and potential are the reason so much more must be considered. Take, for example, reading a magazine. The magazine contains a catalog of content. It employs the simple interface of a table of contents, page numbers and the action of turning the pages—that’s it. In contrast, a website has multiple dimensions and depth. It does more than display your content—it’s functional. It stores content, catalogs it and queries it. It reacts. It allows for conversation and builds community. Your 24-hour Internet house is, in short, a working engine that must reflect your brand proudly, be functional and easy-to-use and run itself without you in the room. Your website is a working engine that must reflect your brand proudly, be functional and easy-to-use and run itself without you in the room. But with great power comes great responsibility—in design and function. It’s very much like building a unique, first-of-a-kind car from the ground up, combining art and precise engineering into a beautiful, functioning machine. There is a metric ton of considerations in any given website, right down to the psychology of choice. As a result, there are many amateur web designers, but very few great web builders. Still, many companies rely on traditional marketing agencies who see web development akin to the linear development of print material, television commercials or radio spots [see our article on the fall of traditional marketing companies]. In other cases, some companies employ a single individual––usually a programmer or a designer––to build a competitive website that in reality requires experts from many disciplines. Both of these extreme approaches to web building leave a trail of failed websites littered around the Internet landscape. The memorable and over-performing website requires a unique and specific combination of expertise from an array of web professionals, all working in concert on the details and all joined together on the big picture. That doesn’t mean you need teams of people working around the clock, but you will need portions of their knowledge and interactive specialties to craft it the right way the first time. In fact, the right way costs less upfront and makes your investment that much more powerful.

Traffic Building

You’ve established a good foundation with your web marketing strategy and metrics; you’ve got an online building that’s both beautiful and very useful; now the focus turns to building foot traffic. While the traffic building plan is part of the web marketing strategy, its execution is on an ongoing basis. The exact strategies and tactics for traffic building are different for each business, brand, product or service, and covering all the possibilities would be beyond the scope of this article. Effective traffic building, however, depends on one key element: the relation of a website’s utility and content to the community at large. Food for thought: In the beginning, you will start with any traffic. However, the public does reside with other websites. Those other websites have provided a platform for community. There are an endless number of online communities on everything from aardvarks to zucchini that people bookmark, remember and participate in––weekly, daily, hourly. You need to be there too. Identify those spots and begin participating in them. Be real and helpful. Promote your brand when appropriate, and promote your personality in the process. Link to some of your good content. Extend an offer outside your primary objective. Create and build a reputation. Again, there’s more to this than a simple example can convey. Simply put, there must be regular engagement with the public outside of your website. People engage with companies through the best form of advertising: word-of-mouth. The Internet just sets that on fire.

Visitor-to-Customer Conversion

The science and art of converting a visitor into a customer is unique to each web marketing plan. It begins with identifying, marking and sometimes even coding-in conversion points within the site. Conversion points can be the creation of an account, the point at which a product is sold, the submission of a contact form or the making of an appointment. The array of possible conversions are unique to the business; however, they tie directly to the bottom line. This is where the experienced web development agency brings metrics back into play. All efforts in traffic building and advertising are mapped; traffic from websites, search engines and other sources are cataloged; traffic is tracked to conversion points within the site; analysis is taken and actions to improve traffic and the rates of conversion are continuously implemented. Such complexity is beyond the expertise of traditional marketing firms or the one-man-band.

Getting Started - The Big Picture

Yes, at first glance this is a lot to take in. That’s why it’s important to interview your marketing firm to make sure they not only recognize the web marketing universe, but that can also execute on it and show results. We’re here to help. Call or write us. We promise to answer all of your questions in a straightforward manner and help you understand it all. If you’re already engaged or under contract with another firm, at least ask your firm—and yourself—the tough questions:

• What is the plan?
• Why will people come to your website?
• What will keep visitors coming back?
• What will make visitors tell others?
• What will convert visitors to customers?
• How is it performing?

And most of all: What will make people fans of your website? This is ultimately the goal of any web marketing campaign, and it's indicative of any superstar website. From local dentists to international corporate brands, anyone can reach the apex of online marketing, win more customers and gain market share for less money. Remember: fans do the marketing for you.

---