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.

In It to Pin It: 8 Ways to Win New Customers with Pinterest

A Pinterest-ing development in social media

The results are in and they’re rather stunning: Pinterest is now the third largest social network in the U.S., right behind Facebook and Twitter (Google+ who?). Moreover, a recent study by BlogHer showed that women trust recommendations from Pinterest more than any other platform. Not too shabby for a network that’s barely two years old and still in an invite-only open beta phase.

The basic mechanics of the site are simple. Members (known as “Pinners”) can establish a profile and “pin” all the cool, funny, trendy and inspirational things that they find in their online travels to digital bulletin boards, where images (and their associated links) are bookmarked. Pinners use these boards to visually document anything and everything pertaining to their interests, whether those interests entail fashion, home décor, food, parenting, wedding planning, tech gadgets or cars.

As you’d expect from any social network, pinners can follow each other. They can also “repin” other users’ images as well as like or comment on pins. Naturally, there’s also integration with the other Big Two, with the option to share links to pins on Facebook and Twitter.

More interesting is the question of why the site has caught fire so quickly. The primary reason lies in its anatomy. True to its name, Pinterest creates a highly streamlined experience for its users that is curated according to their interests. Unlike Facebook and Twitter, where users have to sift through every photo and status update from those they follow in a linear fashion, Pinterest users can focus solely on their hobbies without their feeds being cluttered with information that holds no value to them.

The most important question, of course, is how you can harness the power of this explosive new social network to grow your business. To answer that question, here are eight ways you can use Pinterest to win over new customers and fans:

1. Tap into what people love.

Before you dive in, take some time to study the ecosystem and how its members interact. One of the greatest advantages of Pinterest from a marketing perspective is that the community is very open, so it’s easy to see who’s influential in a certain area of interest and what types of content generate the most repins and comments.

By monitoring these trends, you can identify where the best opportunities lie for your brand to create the kind of content that your customers crave.

2. Focus on values, not products.

Think your brand isn’t a good match for an image-driven platform? Don’t be too quick to dismiss your Pinterest potential. Plenty of brands that don’t seem like the most obvious fit for Pinterest – from GE to Kotex – have found creative ways to leverage the platform to engage with customers.

The key is focusing not on your products or services but on the core values that define your brand. Organize your boards around these pillars of your brand and share things there that anyone who shares that common interest or passion would enjoy. Make sure to offer a healthy balance of content that includes your products where relevant but also great stuff from across the Web as well as repins from other users.

Whole Foods Market, for example, has quickly emerged as a Pinterest rock star using this approach. The company’s core values include caring about the community and the environment, promoting healthy eating habits and providing education about good nutrition. Drawing upon these values, they’ve created a diverse collection of boards –ranging from “Who Wants Dinner?” to “Winter Entertaining” to “Super HOT Kitchens” to “We’re Used to Reusing” – where they share content from a wide array of sources that collectively represents the Whole Foods lifestyle.

3. Tell a story in pictures.

Unlike Facebook or Twitter, Pinterest is image-based rather than message-based – which is one of the key reasons for its success. When users scroll through feeds or boards, they’re presented with a simple, uncluttered interface that includes a stream of pictures interrupted just slightly by a brief caption below. As a result, to be successful, it’s important to ensure that the images you pin to your boards tell the story of the content they represent in a visually compelling way.

For example, if you want to share a link to a post from your blog on Pinterest, you need to make sure it includes a powerful image that encapsulates its key theme or message and is also intriguing enough to prompt someone to click through to see the full story.

Keep in mind, too, that when followers re-pin your images, they can change the caption. As a result, it’s important that the images you pin can stand on their own outside the context of your brand’s boards so that they continue to convey your message and values as they are repinned from one board to another.

4. Be a participant, not just a contributor.

Creating boards that offer great curated content organized around your customers’ interests is a good first step. But as with any social network, to get the most out of your presence on Pinterest, you must also listen and engage, not just broadcast.

Repinning other users’ content to your brand’s boards demonstrates that you’re there to do more than push your own agenda by elevating those who have something interesting to offer on your topics of interest. Likewise, following other users’ boards and commenting on others’ pins is an effective relationship-building tactic that can draw new eyes (and potential new customers) to your own boards.

5. Let your customers create content for you.

Pinterest makes it easy to crowdsource content. All you have to do is create group pinboards and invite other users to pin content to those boards – a great way to spark engagement with your brand.

You can also use group pinboards as a springboard for contests where you ask customers to pin pictures of themselves using your products, with prizes for the most creative, innovative or inspiring images. It’s a win-win strategy for both your brand and your customers, as your customers can enjoy a turn in the spotlight while you can promote your products in a tasteful way that’s very palatable to the community.

6. Diversify your boards.

Another element that differentiates Pinterest from Facebook and Twitter is that users have the option to follow specific boards in addition to following users. This means that a user may elect to follow just one or two of your boards rather than everything you post.

While this may initially seem like a disadvantage to you, it’s actually a benefit. Why? Because it means you don’t have to worry about limiting your content to only that which offers the broadest appeal. Instead, you can tailor each board to fit a specialized interest.

Returning to our Whole Foods example, each of their boards is tailored to a fairly narrow area of interest, whether that’s recipes, seasonal entertaining, home décor, DIY projects, gadgets or books. While all of these boards may not appeal to every Whole Foods customer, by providing such a wide array of boards, the brand has greatly increased its chances that every customer can find something that resonates with their interests.

7. Make sure your great content can be found.

If you’re investing the resources required to create and curate interesting content, you want to make sure it can be found by the greatest possible number of customers and potential customers, right? The good news here is that there are tactics you can use to boost your odds.

First, just like Twitter, Pinterest supports hashtags. Tagging each image with the central idea or theme of your board will increase its chances of being found in search. Additionally, the sharing tools built into Pinterest automatically pick up these hashtags and include them when users share your content on Facebook and Twitter.

Also, make sure when possible to form the name of your boards around keywords. For example, West Elm offers home décor boards organized around specific color palettes (“Coral,” “Aquamarine”) and patterns (“Stripes,” “Chevrons”). By naming their boards according to these keywords, West Elm helps lead users who are looking for decorating ideas focused on that color to their boards.

8. Turn pins into traffic.

Don’t overlook the opportunity to use Pinterest to drive traffic to your website. If you pin cool imagery and interesting content from your site to your boards, you’re basically seeding Pinterest with a lot of links back to your site.

You can also add the “Pin It” button to your site right next to your other social sharing buttons in order to make it as easy as possible for visitors to add images from your site directly to their boards.

And if something either you or one of your customers pins happens to become incredibly popular? Think of all the potential clicks back to your site!

10 Things You Pay for From Traditional Marketing Agencies

In today’s business world, it’s no longer the big fish that eats the small fish; it’s the fast fish that eats the slow fish.

In the same way the information revolution has changed how customers and market share are won, it has also reshaped the old systems that once governed how companies operate and how people work. The future of business is more flexible, faster, leaner and smarter.

This is not just about adopting a telecommuting policy or forgoing the purchase of that expensive copier. It’s about changing how business is done, both in philosophy and in execution.

The penalty of clinging to old business practices is losing clients that no longer can justify bills with unneeded overhead baked into them. As leaner and smarter companies emerge, the old juggernauts who are slow to change are quickly dying.

Marketing agencies

At the top of the scale of corporate bloat are marketing and advertising agencies. While not all industries can shed their physical offices and adopt a virtual model, the dominance of digital marketing coupled with the very nature of marketing’s day-to-day business operations afford these agencies a clear-cut path to modern efficiency.

However, in reality, few have changed. The majority of marketing firms hang on to these old systems of operations, passing on the burden of their expenses to their clients.

The traditional marketing firm still maintains an expensive posture to attract its clients.Why? Most find changing their methods of operations to be just as hard as adapting to today’s Web culture and the new rules of doing business. Too much has changed too quickly. In clinging to old methods – even those of its own self-promotion – the traditional marketing firm still maintains an expensive posture to attract its clients with their lavish offices and costly travel. These companies force work into physical locations, perpetuating the punching of clocks and shuffling of paper, while carrying years of old business operations in the form of debt, all of which must ultimately be paid for by the client.

There’s a reason why marketing companies are dying left and right, beyond becoming irrelevant in the digital age. Today's clients no longer accept invoices inflated by bloated operations, particularly when virtual companies can do more at a fraction of the cost.

The rise of the virtual company

It took time for companies like Amazon, Netflix and Apple to revolutionize and overtake industries that were once based in bricks and mortar. Replacing the physical form was a challenge in reconditioning the mind of the consumer and in reshaping traditional systems, such as fulfillment, customer service and exception handling.

2010 will see the emergence of the virtual company in full force.These initial obstacles were quickly overcome as consumers realized the advantage of lower prices by way of lower overhead, mutually beneficial partnerships and geographical barriers being torn down and giving way to an expanded market. Today, that same virtual model that started strong in the retail sector is being adopted throughout all applicable industries. As a result, virtual companies are growing at record pace.

2010 will see the emergence of the virtual company in full force. The convergence of technology, communication, new service-based companies and systems that meet the demands of companies that no longer carry the burden of bloated operations will allow more companies to work smarter, faster and from anywhere.

As virtual companies continue to refine their systems and clients continue to realize the value in receiving better service for less money, the virtual company will gain strength and overtake the outmoded traditional business models. This not only improves efficiencies but tears down geographical barriers to markets and talent.

As we enter the age of the virtual company, let’s review ten things you pay for from traditional marketing agencies:

1. Facilities

Office space is typically the largest expense on the books for marketing agencies. These obligations range from rented space in a shared office park to owning (and owing for) real estate, freestanding buildings and parking facilities.

Virtual marketing companies shed this expense because the nature of the business simply doesn’t require it anymore. Marketing is digital, and print is dying. All the infrastructure that was once housed in a physical location is now replaced by a range of new digital services. Communication is conducted through e-mail, mobile devices, video conferencing and client dashboards rather than on-site meetings and client lunches, the costs of which are ultimately passed back to the client.

The marketplace demands geographic barriers be removed to hire, collaborate and partner with the best talent in the industry. The virtual company’s employees work remotely within a virtual space that accomplishes anything that a physical location provides and more. They are mobile and available at a moment’s notice to meet with clients. Even remote offices, meeting spaces and presentation rooms can be rented by the day or hour, as needed, so as not to waste money on a fixed building that sits there to house all the bloated systems and conventions the traditional marketing company clings to.

2. On-site employees and physical work systems

For many office-based companies, the days of having people gathered in a building to work is gone. For these businesses, the act of keeping people around was just another form of time card punching, rooted in old systems founded on the demand for people to be present and available to coworkers and customers from 9 to 5.

Happy employees do better work, particularly the ones responsible for great creative work.Virtual companies don’t operate according to fixed 9-to-5 schedules. Instead, their systems and employees are faster, more flexible, working within tighter deadlines and using new, more robust project management conventions.

Telecommuting is more prevalent today than ever, for reasons that go beyond avoiding the cost of expensive office space. Happy employees are ones that are not trapped in cubicles, hustling through traffic, burning 30-40 hours and hundreds of dollars a month in commuting to a fixed place to do work that can be done anywhere. The fact is, happy employees do better work, particularly the ones responsible for great creative work.

Moreover, work systems based on having everyone in a centralized office all day are terribly inefficient. To see this, you have to look beyond hard costs and expenditures and consider the man hours wasted on meetings, scheduling, water cooler talk, Web surfing – the list goes on and on.

Replacing the physical office environment are proven virtual office management and collaboration systems like Basecamp, video conferencing, cloud computing and mobile Internet connectivity. Most importantly, the philosophy behind the work is based on maximizing project development efficiencies rather than filling up a 40-hour work week simply for the sake of adhering to convention.

3. Utilities

From security systems, electricity, heating and A/C to cleaning and facility repairs, the auxiliary costs of maintaining a facility can be extraordinary. This is an expense that virtual companies leave behind and don’t pass on to their clients.

4. Landline phone systems

In an age where business is a 24-hour, anywhere and everywhere proposition, corporate phone systems are an enormous waste. Everyone has a cell phone, and most working professionals carry smartphones. For many, the superfluous office phone collects dust, and voicemail systems are rarely used. In a time when most households are shedding the costs of landlines in favor of more flexible and leaner mobile options, many businesses still lag behind.

Agencies that continue to operate from a physical facility must pay to maintain and upgrade expensive landline systems, adding yet more extraneous dollars per hour to their clients’ bills.

5. Office furnishings

Expensive offices, conference room tables, desks, chairs, bathrooms, kitchens, interior decoration and even trophy cases displaying purchased accolades are omitted from the overhead costs of all virtual companies.

6. Computing infrastructure and LANs

So many companies still keep gobs of file and printer servers along with data backup systems, server redundancies, uninterrupted power supplies, routers, switches, cabling, internal e-mail systems – the list goes on.

For virtual companies, the idea of a LAN (local area network) has been replaced by cloud computing, with Web-based service providers, project management, collaboration systems, and applications. These systems are accessible from anywhere in the world, offer true collaboration with anyone and are always backed up and protected.

What’s more, project management in the virtual space allows for new and innovative work habits that promote speed, efficiency and flexibility in ways old companies employing old work systems simply cannot keep pace with.

7. Paper

So many of the slow, dying companies we see today still live in an office with paper circulating all the time. Believe it or not, nowhere is this more true than at your local marketing agency. Also included in this paper-filled world are printers, copiers, fax machines, shredders and a never-ending variety of supplies, all in support of paper trails that lead from the office to the client and back again before ending in nicely climate-controlled filing cabinets.

Virtual companies exist in a paperless world, and the best work circles around those that stay in a paper-driven office. The benefits of going (and staying) completely digital are immense. Digital documents are searchable, sharable, versioned, more secure and viewable on nearly any device. The more files that are kept, used and cataloged in digital format, the more efficiencies will increase overall.

8. Support staff and personnel

When agencies pay for an office, furnishings, phone systems, computing infrastructure and everything in between, they also require additional personnel, time and resources to support those systems, including office managers, receptionists, IT staff, cleaning crews, landscapers and security, to name a few. Thus, these already excessive expenses are further exacerbated and passed on to the client.

9. Restricted geographical barriers

If there’s one thing the Internet has brought to the economy, it’s the expanded marketplace. The business systems of virtual companies are not only set up to take on clients without most of the additional expenses suffered by traditional companies but to hire the best talent available anywhere.

Truth is, many marketing agencies are restricted to their local markets. While these firms would in theory jump on a plane to take on a client nearly anywhere, most find in practice that only local clients are cost-effective given the traditional systems still employed.

10. Debt

The result of all of this expense in a world that is quickly shifting to leaner and smarter operations is that this much of the excess is carried forward in debt that comes at a premium paid to a bank in interest. That ongoing obligation is passed to clients along with the cost of all other inefficiencies.

Virtual companies that start fresh, using smart, lean and flexible systems of operation don’t carry years of bad investments in outmoded, expensive systems on their backs. In fact, as traditional marketing agencies continue to lose clients and market share to these more adept modern firms, the additional debt taken on to stay alive will eventually lead to the extinction of the slow, bloated traditional marketing company as we know it.

photos: Flickr: Christ0ff, chrisdlugosz