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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Five Often-Overlooked Opportunities to Build Trust with Online Shoppers

Just because the online shopping experience precludes you from cultivating personal, face-to-face relationships with your customers, it doesn’t mean that trust is absent from the equation. In fact, just the opposite is true. Because you don’t have the advantage of engaging with your customers in person, it’s critical that you examine each aspect of your e-commerce process to ensure that you are building and reinforcing trust at every step of the way. Here are five commonly overlooked opportunities to earn the trust of online shoppers:

Transparency

From the time a customer lands on your site until the time their order reaches their doorstep, transparency is key. It’s important to ensure that you address and eliminate all potential concerns upfront. Before your customers even reach checkout, they should know how quickly their order will be processed as well as the range of available shipping options and costs. Give your customers added assurance by providing delivery timetables that are as specific as possible without compromising accuracy. For example, you might guarantee that all orders placed Monday through Friday before noon eastern time will be shipped the next business day, as long as you know that you can live up to this promise without fail. This type of information is mission-critical to shoppers who are making a time-sensitive purchase such as a birthday gift or an outfit for a special occasion. If possible, after an order has been placed, send a follow-up e-mail confirming that the shipment is on its way, and include a tracking number, too. The fewer question marks that arise between the time your customer completes their purchase and the time it arrives in their hands, the more trust you’ll build.

Packaging

When your package lands in your customers’ hands, does it give the impression that someone has taken care to make them feel they are receiving something special that has been handled and shipped with care? Or does it create the feeling that someone in a warehouse grabbed a few things off the shelf, stuck them in a plastic bag and sent them on their way, with no thought about or regard for the recipient on the other end? The quality of packaging can have a great impact on the perception of the quality not only of the product inside but of the overall buying experience. As a result, you shouldn’t think of the cost of packaging as an expense; you should approach it as an investment in earning the trust of your customers. It’s important to go the extra mile to make sure you present your products in a way that protects and enhances the value of your brand. Grove is a great example of a company that has perfected the art and science of packaging. Each handmade bamboo iPhone 4 case, which can be custom-engraved with the customer’s design of choice, arrives encased in a bamboo frame, which is actually created as a byproduct of the production process. This ingenious idea embodies everything the brand stands for – sustainability, quality, craftsmanship and authenticity – while presenting the case itself as a unique work of art.

Follow-up

The process of building trust with online shoppers doesn’t have to end when your package arrives at their doorstep. A follow-up e-mail asking them to rate your products or provide feedback on their buying experience is a simple act of consideration that conveys your genuine concern for their happiness. Netflix frequently sends subscribers e-mails asking them to rate the audio and picture quality of a movie they recently watched or to evaluate their satisfaction with the service they received when they contacted Netflix phone support.

While Netflix undoubtedly cares about measuring the quality of their services, they are also seeking to build and maintain the trust of their customers by demonstrating their commitment to delivering a great experience every time.

Returns

A generous return policy is priceless when it comes to winning the trust of online shoppers. As commonplace as the act of buying products on the Web has become, there is always still a lingering hint of uncertainty that resides with customers because they cannot see, hold and judge an item for themselves before committing to the purchase and paying the associated shipping costs. However, reassuring them that if their item arrives and is not what they expected, they can return it without question and – even better – with free shipping, shows that you are fully dedicated to ensuring their satisfaction. Not only will you build trust but you’ll also give them an added boost of buying confidence that will keep them coming back again and again. Additionally, make sure that your return policies take into consideration what happens when things don’t go exactly according to plan. If you miss your promised delivery date, don’t add insult to injury by creating headaches for a disappointed customer. Instead, win back their trust by expressing your sincere apologies and graciously offering to credit back the original shipping fees and cover the cost of return shipping.

The human touch

Sure, it's okay to automate your e-commerce processes – charging a credit card, sending order confirmation e-mails, scheduling shipments and generating tracking numbers. But throughout every step of the transaction, you must also offer your customers the safety net of being able to talk to a real person. Not only should your customer service number be available, but it should be obvious and omnipresent so that shoppers don’t have to hunt it down. While it’s tempting to bury those digits because the cost of maintaining customer service staff can cut into your profit margins, you must remember that even in today’s Digital Age, nothing builds trust quite like genuine human contact. If you’re not readily accessible to your customers, you’re running the risk of losing their business to someone who is. E-mail and online contact forms are fine options, but they shouldn’t be the only options. Keep building trust and head off the temptation to give up and go elsewhere by making sure your customers can easily make the leap from virtual interaction to personal interaction. In an age when consumers have the luxury of almost unlimited options, you can’t afford to roll the dice with your customers’ trust. Establishing clear, straightforward expectations, demonstrating care and concern for your customers’ satisfaction, following through on your promises and being readily accessible and responsive goes a long way in transforming a casual online shopper into a repeat buyer and a loyal evangelist for your brand.

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Starbucks vs. Dunkin' Donuts

With billions in sales annually, coffee industry giants Starbucks and Dunkin' Donuts have demonstrated their ability to push their product in our caffeine-driven society. But when it comes to harnessing the power of the web to cultivate community around their brands, what are these two superstars doing to ensure that they keep and inspire loyalty among their followers, especially in the face of mounting competition between each other as well as increasing threats from newer players such as McDonald’s? Fame Foundry’s agents weigh in below:

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• The Architect

  Starbucks and Dunkin' Donuts’ approaches to creating meaningful community around their brands and extending their companies beyond a typical retail website is as different as their stores. Both websites have menus, nutrition information, online stores, store locators and social links -- the bare necessities for brands of this nature. The similarities end there. Dunkin' Donuts' version of extending itself beyond the walls of its stores is reminiscent of old gimmicks and half-hearted community-building ploys. There's a healthy version of its menu, links to a running site, some promos and a contest, and then we’re done. Dunkin' Donuts provides no opportunity for its fans to be a part of its website in any meaningful way. Starbucks has done better in their attempts. Noteworthy is the idea of improving the company with your ideas -- something that speaks to core fans. If you love the green Starbucks splash stick, then you should know it was developed in this way. The website allows visitors to share ideas, vote on ideas submitted by others and see which ideas have received the strongest response. It promotes community by encouraging visitors to play a part in improving the brand they love through their own opinions and innovations. Second to this, there’s a blog that’s halfway worth subscribing to if you’re an ultra fan. And while it is not exactly groundbreaking, it has a genuine appeal and seems to keep a decent personal touch to it with little of the usual corporate interference on the surface. Introducing new conveniences, products and free offers allows the blog to be something worth subscribing to for core users and brand evangelists. In addition, Starbucks offers a place for those willing to contribute to their causes. It’s not terribly engaging, but having a directory of people bound to stores and allowing for conversation within each store is a worthwhile effort. It needs more work in order to truly establish the store as a gateway to the local community.

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• The Craftsman

  A website should not only be an extension of a retail store, but it should also be the gathering place for your brand's community of followers. It's important to give that community a great experience when they visit your site, and design plays an integral role in that experience. Dunkin' Donuts and Starbucks handle this experience in very different ways, and both leave much to be desired. Let's start with Dunkin' Donuts. It is quite clear that the goal of this site is to push products. The first thing that I notice is the horrible Photoshop work on the home page. It's a collage of poorly photographed and cut out cups, beans and other products. It's obvious that none of the elements ever appeared together naturally. With coffee beans the size of walnuts and cups the size of buckets, the scale is so ridiculous that the whole thing comes off as cheesy and poorly produced. There is a lot of movement and visual stimulation on the home page, including pop-up menus, enlarging images and a hot pink drop-down menu. It seems that at any moment a man wanting to guess my weight or swallow a sword could jump out from behind that burlap sack. These elements are over the top and a detriment to the functionality, as the page takes several seconds to load. The navigation is passable, but there is a lot going on. First you have the main navigation with drop-down menus. Above that you have a secondary navigation that is one of the smallest I have ever seen at only six pixels. I would think that a store finder and franchising information warrants a larger size. And above in the upper right corner there are 4 graphics that appear to be buttons but do nothing when clicked or hovered over, creating confusion. Secondary pages on the site are cleaner, but there are still some alignment and spacing problems, and an overall lack of design consistency makes the site look thrown together. While some pages look pretty good, others look quite bad. On any given page there are several fonts and many colors, causing it to look very busy. Starbucks' website is in stark contrast to the Dunkin' Donuts site. It's clean and minimalist in a way that feels great on the home page, but once you dig into the site, the pages become bland and boring. The home page immediately gives you hierarchy with a large, interactive feature that is simple to navigate. Below that are three areas that funnel traffic with a minimal navigation system. The light background helps the warm, rich imagery pop, creating terrific contrast. Nothing is in your face or obtrusive. It's subtle and functional -- just what you'd expect from a brand like Starbucks. The secondary pages aren't nearly as strong as the home page. The primary and secondary navigation are minimal to the point of being boring. The leading on the navigation and body text is tight and should be expanded. The subtle drop shadow on the top of the canvas area makes that area appear as a frame and does nothing to enhance the page. Columns are narrow, and content feels cramped. There is wasted real estate under a poorly designed search bar which features a "go" button -- none of which feels like what you would expect from Starbucks. There is also a lot of inconsistency from page to page, especially in the way their products and offerings are displayed, which makes the browsing experience feel disjointed. Both sites have work to be done and leave me feeling disappointed. I expect better from these two captains of the coffee industry. While Dunkin' Donuts is over the top with its bright colors and flashy animation, Starbucks doesn't go far enough with its neutral colors and boring framework. Like a cup of coffee that's too strong or too weak, these sites need to find the perfect brew.

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• The Developer

  Anyone who has studied the metrics on their own website knows that getting people past the front page is a big deal, getting them to stay longer is even a bigger deal, and having someone feel that your site is worthwhile enough to come back is the ultimate score. Today's websites are as much about visitors consuming information, collaborating and interacting as a community as they are about selling a product or service.Interestingly, when comparing Dunkin' Donuts to Starbucks, it is clear that both companies have attempted to make their sites into something more than just a reproduction of their retail storefronts. They both have used various methods to try to capitalize on the enthusiasm of their customers. Dunkin' Donuts offers a feature that allows you to create your own donut, while Starbucks has launched a number of social websites that range from promoting specific product lines to advocating social change to soliciting suggestions to make your Starbucks better. Overall, Starbucks does a better job of providing compelling reasons to visit the site. However, both make the perplexing mistake of burying the content rather than bringing it to the forefront. Dunkin' buries these nuggets in favor of button graphics and forces visitors to hunt to find something interesting. Starbucks hides a single text link for each of their social sites below their Flash movie that gets in the way of finding something more useful. Both companies have very active Facebook pages with posts happening every few minutes -- not that you would know this by looking at the front page of their site. What's that you say? The goal is to sell product? Well, I have a question in return: Isn't it necessary to drive traffic to your site in order to sell products online? If there are 4.5 million fans on Starbucks' Facebook page posting every couple of minutes, you do the math. I'll just hold off on returning to these websites until either company gives me a reason to.

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