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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3 Simple Rules for Navigation That Will Boost Your Website's Performance

At the outset of every new website design project, I ask clients to list a few adjectives that would describe their ideal new site. Inevitably, “easy to use” is almost always at the top of the list. Naturally, no one wants their website to be difficult to use. After all, in today’s era of unlimited choice, a great user experience is an absolute necessity. You work too hard to attract visitors and prospects to your website only to drive them away because that site’s interface presents them with frustrations and challenges. In that vein, the ease with which visitors can navigate through your website and its content will have a significant impact on the success of your site. If users can’t quickly identify how to accomplish their goals – whether it’s obtaining more information or making a purchase – they are likely to make a quick exit, taking their business with them. It’s up to your site’s navigational structure to do the heavy lifting in supporting their objectives and answering their questions, guiding them through the site to find what they need and complete the actions appropriate to those needs. This could be purchasing an item, filling out a membership or information request form, or simply finding your phone number so they can call you and open the lines of communication with your business. Regardless of your site’s “win,” an intuitive navigation structure is what will lead them there, so make sure your website follows these three Cs of good navigation in order to ensure that you make the most of every opportunity to capture and convert new customers.

1. Be concise.

In his book The Laws of Simplicity, renowned designer and current President of the Rhode Island School of Design John Maeda offers the following advice as part of his First Law of Simplicity: “The simplest way to achieve simplicity is through thoughtful reduction.” When weighing various options, the fewer choices that are available, the easier the decision process becomes. Give me four items to choose from, and I will be able to select one much more quickly than if you present me with eight. The same principle holds true for website navigation. Presenting your audience with fewer choices will allow them to more easily identify the one that pertains to their specific needs. Considering how impatient typical website visitors are, this can have a very positive impact on your site’s user experience. Look again at John Maeda’s quote, and you will notice that he is not an advocate for arbitrary editing but rather “thoughtful reduction.” Paring down the elements of your website’s primary navigation structure from nine or 10 choices down to four or five is great, but you need to be strategic in how you do it. Start by looking at the pages outlined in your sitemap and deciding how they can be categorized or grouped together in order to reduce the number of topline options. One of my favorite examples of this practice is the common testimonials page. Businesses love to include a testimonials page on their websites, but based on traffic numbers, these are typically among the least visited pages on any site. Traffic numbers are the ultimate arbiters of value and importance. If your visitors aren’t accessing certain content, then that content shouldn’t be given the same prominence as those pages that they actively seek out and use. In the case of testimonials, removing that link from your primary navigation and establishing it as a subpage under your “Our Company” or “About Us” section works very well. The same applies to any pages that you have that are dedicated to company history, management team profiles, staff bios, your company’s mission statement and the like. While these items are valid information for someone who’s really digging in to vet your qualifications, the majority of your visitors will never look at them, so let them take a back seat to the content that’s really going to seal the deal. Of course, this is where the “thoughtful reduction” principle comes into play. While each of the examples above could be grouped together, that doesn’t mean it is the right choice for your site. The goal is to examine your sitemap with a critical eye and decide which elements are truly important to your audience, which ones are secondary, and how you can treat them accordingly to provide as few choices as possible within your site’s primary navigation.

2. Be clear.

Everyone wants their website to be unique. Sometimes, this leads to the temptation to try to reinvent the wheel when it comes to the organization and presentation of its navigational structure, whether that’s by replacing links with icons or coming up with clever names for major content areas. While this may sound like a great idea that will help set your site apart from your competitors’, it can easily backfire. Visitors want to make quick, logical choices as they navigate through your website, which means that the options presented to them need not only to be concise but also to be clear. The navigation on your website needs to conform to the expected conventions that your visitors instinctively know and recognize. This does not mean that your primary navigation should be designed to look like large, beveled buttons with faux‐3D effects. That treatment may make for an obvious “button,” but it is also not in keeping with the aesthetic of today’s Web. On the other hand, you don’t want buttons or links that are so subtle with so little contrast that they fade into the design to the point of becoming invisible. There is a happy medium to be achieved where all links can be obvious and attractive at the same time. Labels are also an important part of clear navigation. Having a navigation link labeled “About Our Company” directly conveys to users what they can expect to find on that page. Trying to be creative and instead name that link “Unlock the Magic” is anything but clear and will confuse and frustrate visitors who simply want to find more background information about your company. That’s not to say that exploring interesting and innovative avenues in the design of your website is always a bad thing. It can certainly help differentiate your site from others and make for a memorable experience. Just make sure that you are not sacrificing clarity for creativity and confusing the user experience in the process.

3. Be consistent.

The final rule of website navigation is consistency. If you’ve designed a clear, concise navigational structure that your visitors can quickly and easily understand and use, then it’s important to maintain that structure throughout the rest of your site. Your website is not a video game, where each level provides new challenges that are the purpose of the game itself. Your users do not wish to relearn how to use your site at every step along the way. They are there solely to obtain information or complete an action, and anything that gets in the way of their mission is reason enough for them to abandon your site. Consistency is about more than just your primary navigation, however. The way that submenus are presented on the interior pages of your site should remain the same from section to section as well, and the same holds true for treatment of text links or buttons. If you use a certain color for text links, consider using that same color for buttons. Users will quickly learn which color – red, for instance – denotes a clickable area, which will help them to continue moving through your site quickly and intuitively rather than being bogged down by simply trying to locate the pathways to their desired destination.

How does your site measure up?

While there are many factors that ultimately contribute to your website’s performance, a well‐designed navigational structure goes a long way toward ushering your visitors from point A (your home page) to point B (the point of conversion, whether that’s placing an order, sending you an email or picking up the phone to initiate conversation). Look at your site and evaluate its navigation based on the principles covered in this article.

1. Is there anything you can do to make your navigational structure more concise through thoughtful reduction?
2. Are there any changes you can make to make your navigation clearer to your audience?
3. Are you consistent throughout your entire site with the way navigation is designed and presented?

Even if you are not ready to undertake a major site overhaul, you can still refine and tweak your existing site to improve its navigation and realize the rewards of presenting a better user experience to visitors that have found your website and are looking to do business with you.

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Is Your Promotion Ready for Prime Time? Seven Make-or-Break Lessons in Staging a Successful Retail Sales Event from Amazon

With the holiday season just around the corner, talk of “Black Friday” and “Cyber Monday” sales have already become practically unavoidable. These two retail sale juggernauts have become so deeply entrenched in our cultural lexicon that they actually shape consumer behavior, as eager shoppers anticipate and plan around their arrival for weeks or even months ahead of time. But what if you want to go your own way? Can you conceive of your own unique promotion that will excite consumers and jump-start spending behavior on par with Black Friday? This was the very challenge Amazon attempted to tackle this past summer with their “Prime Day” promotion. Coinciding with the company’s 20th anniversary, Prime Day was a one-day sale that was promised to include “more deals than Black Friday.” Amazon flooded the marketplace with advertising in advance of Prime Day and whipped up great excitement and speculation among customers about what types of deals might be offered. However, when Prime Day arrived and the sales rolled out, the reaction was decidedly less enthusiastic, with many underwhelmed shoppers turning to social media to express their apathy, disappointment and even downright disgust. In the end, Prime Day was not the colossal failure that the Twitterverse would have you believe. In fact, just a few hours into the day, Amazon sent out a press release claiming that “peak order rates have already surpassed 2014 Black Friday.” Moreover, “Prime members have already bought tens of thousands of Fire TV Sticks, 35,000 Lord of the Rings Blu-Ray sets, 28,000 Rubbermaid sets, and 4,000 Echo devices in 15 minutes. The Kate Spade purse was gone in less than a minute. We also sold 1,200 of the $999 TVs in less than 10 minutes. And there are thousands more deals coming.” While Prime Day may not be the next great retail phenomenon, Amazon’s venture into inventing a new sales holiday offers several valuable lessons in the do’s and don’ts of crafting a successful promotional event:

1. Build buzz around your promotion.

One thing that Amazon did right was building up excitement in advance of the event. They ran advertising for weeks leading up to Prime Day, yet they kept the specifics about the deals that would be offered under wraps, leading to great speculation among Amazon enthusiasts about the kind of fantastic steals they might be able to score. Many of these shoppers even logged on early to try to capitalize on the sale. Any successful promotion starts with hype. You must have a plan in place to build excitement and get people talking so that once it begins, you have a eager customers ready and waiting to jump on board. Of course, hype is just that. It should be the drum roll leading up to the big finish. Otherwise, it’s just an empty promise that will result in disappointed (and distrustful) customers.

2. Deliver on the expectations you’ve created.

By far, the biggest point of failure for Prime Day promotion is that many customers expected much more than Amazon ultimately delivered. The majority of the complaints about Prime Day centered around the lack of perceived value or desirability of the discounted items. Typically, during Black Friday and Cyber Monday, retailers tease deep discounts on highly desirable items (such as TVs, gaming consoles and premium brand products) to get shoppers in the door, counting on them to scoop up other items that they want to unload in the process. But on Prime Day, the best deals centered around Amazon’s own tech gadgets, like their Fire TV stick, Kindle and Echo, while many of the other products that were included, such as dishwasher detergent, socks and even a 55-gallon barrel of lube, were much less attractive and left many customers feeling underwhelmed. Furthermore, Amazon front-loaded the hottest deals at midnight PST, so by the time most customers jumped online in the morning, everything had long been sold out. While Amazon has the numbers to prove they sold tons of item during Prime Day, there’s no denying that, for many customers, they did not meet the expectations that they established in the pre-sale campaigns, leaving the retailer with a major black eye in the court of public opinion. When planning a promotion, be sure that you live up to the hype you create. If your focus is on marketing the promotion instead of on the promotion itself, then you are setting yourself up for disappointed customers.

3. Remember: bigger does not always mean better.

Looking back at Amazon’s pre-sale campaign messaging, you will notice that they refer to Prime Day as being bigger than Black Friday and having “more deals.” Nowhere could I find any mention that Prime Day would be “better” than Black Friday, just that there would be more deals offered, which is a perfect example of the old adage that “bigger does not always equal better.” Item for item, Prime Day may have indeed had more to offer than Amazon did on Black Friday, but that didn’t matter to most customers. People don’t necessarily want tons of options, they just want the right ones. When planning your own promotions, think big, but also ensure that you do not sacrifice quality for quantity. Instead of focusing on offering a wide array of deals, go the opposite direction and think about personalizing your promotion. These days, with the abundance of traffic analytics and customer account data available, it’s easy to know what your customers shop for and purchase most often. Use this information to your advantage and craft customized offers that reward your loyal shoppers with discounts on the things they really want and need. And for goodness sake, notify them ahead of time that their favorite items will be on sale! This is definitely one area where Amazon really missed the boat. After all, who has more customer data and marketing intelligence than one of the Web’s biggest retail giants?

4. Don’t try to please everyone.

The fact that we are talking about all the complaints that people had about Prime Day is interesting in and of itself. After all, this is a sale we’re talking about! People are actually upset that the deals offered weren’t good enough! That’s the very definition of a First World problem and it shows that, no matter how hard you try, you will never please everyone. When planning a promotion, consider your customers and what they want, but don’t get too hung up on trying to include something for everyone. Doing this can force you to go to market with a campaign that is unwieldy and unfocused, and no matter how hard you try, there will always be someone who complains that they did not get what they wanted. Do your best to set and meet expectations, but also be prepared to hear complaints, and accept that this is part of doing business.

5. Motivation is key, and timing is everything.

One of the key reasons Prime Day was not a bigger success is that the motivation behind the event was driven by Amazon, not it’s customers. Amazon decided that they wanted to stage a huge promotion in the middle of the summer to celebrate their 20th anniversary. But what does that have to do with me, the consumer? Nothing at all, really. As Ed Stevens, CEO of Shopatron explains, Amazon’s chief failure was that they neglected to tap into any real time- or emotion-based motivation for their customers: “Prime Day will in no way replace Black Friday. The primary reasons for this include the amount of consumer discretionary dollars in July will not change. Consumers are most motivated to spend their money when it’s associated with an event, and most holiday sales are centered around a sentimental or emotional gift giving component…Prime Day is an unsentimental, ordinary sales gimmick akin to a car dealership having a Labor Day blowout sale.” Everyone knows that the key to making a sale of any sort is to instill a sense of urgency in the buyer. July is far removed from any major gift-giving holiday, so as a shopper, the idea of Prime Day as an early Black Friday is null and void. Unless there’s something I want for myself and happen to find an unbeatable deal on, I’m not likely to part ways with my money on this particular day just because a company tells me I should. When you’re planning your next big promotion, make sure the timing is right, and that you’re tapping into motivations that are relevant to your customer base. If you own a stationery shop, you can run a promotion timed to coincide with brides who are planning for the summer wedding season. If you run a sporting goods store, it doesn’t make sense for you to run a Valentine’s Day sale, but it does make sense for you to plan promotions tied to the beginning of each new sports season for adults and kids needing to gear up for spring baseball or fall football and so on.

6. Make it easy for your customers to participate.

Another one of the chief complaints about Amazon’s Prime Day was the way in which offers were presented: an infinite scroll of items presented five at a time in no particular order which continued on for hundreds of pages. Who wants to wade through that for the chance at finding something they might want at a price they might want to pay for it? If you’re going to run a promotion, don’t make your customers work hard to make you money. People love a good deal, but only to the extent to which it doesn’t cause them an excess of inconvenience. Don’t forget: there’s always a competitor lurking in the wings to give your customers what you fail to deliver.

7. Accept that you will have a target on your back.

With Prime Day well underway and customer reactions starting to roll in, Walmart jumped into the conversation by offering a number of their own “Rollback” deals. They were able to sit back and see what Amazon was doing and then respond in a way that would allow them to try to trump Amazon’s big sale – and for many customers, this move worked as they found (in their opinion at least) better deals on Walmart.com. What does this show us? That the first one to do something is the one with the target on their back! After all, it is always easier to follow rather than to lead. By waiting to see what Amazon had up their sleeve, Walmart was able to evaluate the situation and respond, instead of taking the leap and being first into the fray. This is a reality for any company that forges into uncharted territory, since it allows your competition to learn from any mistakes you make and build upon the path that you establish. Does this mean you should be reactive rather than proactive in your promotional strategy? Not at all. Many companies that were “first in” benefited from that position. eBay was the first company to do online auctions, and sites that tried to follow in their footsteps slowly failed and closed up shop while eBay remains a powerhouse. Sometimes, the first one in wins the day, but other times, they end up being the target that everyone else comes gunning for. Ultimately, though, it’s good planning and solid execution that are the differentiators between a promotion that soars and one that sinks.

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