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.

Behavior-Triggered Emails: The Secret to Boosting Your Open Rates by 152%

When it comes to email marketing, personalization is the secret to success. But how can you effectively personalize a tool that is by its very nature designed for mass communication?

The answer? Behavior-triggered emails.

Behavior-triggered email is a versatile personalization technique that allows your business to engage with customers at timely touch points. For example, when RunKeeper, a pedometer app, sends a message to one of their registered users with a prompt that reads, “You went running last Saturday at this time. Why not go for a run now?” — that’s a behavior-triggered email. Although highly personal to the recipient, messages like these are easy to automate by taking advantage of data points that are relatively easy to mine and collect thanks to modern technology.

While there is an almost limitless range of ways to execute behavior-triggered emails, the keys to crafting a successful campaign are specificity and creativity. To help you better understand what this is all about and provide inspiration that you can implement in your own marketing, let’s take a look at just a few of the brands that are using this tactic effectively to connect with their customers:

Harris Teeter: Welcome

The strategy: Sending a welcome email is standard protocol almost any time someone signs up for an account on your website or app. However, this message from grocery store chain Harris Teeter goes a couple of extra steps beyond extending the typical thank-you for registering.

First, it offers a discount on the service fee, providing an extra kick-in-the-pants incentive for new account holders to seize the day and place their first order.

Second, it takes advantage of this inbox inroads to remind customers of the benefits of their personal online shopping service and offer a few helpful hints for getting started, thereby reinforcing the sales messages that prompted the user to sign up for an account in the first place.

Soap: Come back

The strategy: In most relationships between customers and brands, there comes a time when the customer begins to drift away, whether because another competitor has caught their eye or because any of life’s myriad responsibilities and distractions have bumped their need for your products or services down in their list of priorities.

If it’s been a while since a customer last visited your site or made a purchase, it’s time to reach out and give them a gentle reminder that you’re still here for them, which is exactly the objective behind this message from Soap.com. Their approach is particularly effective because it is not just a one-time offer that might entice a customer back only to lose them again after making one purchase in order to reap the benefit of the discount. Rather, the offer code is good for every purchase made for two months, a smart sales strategy aimed at coaxing the customer back into becoming a habitual Soap shopper.

Williams-Sonoma: Abandoned cart

The strategy: Another staple of e-commerce email marketing is the abandoned cart reminder. While this strategy is not earthshakingly innovative, it is nevertheless effective.

Williams-Sonoma takes this approach to the next level by including a unique discount code that provides a strong incentive for the customer to return to the site – or the store – to complete their purchase. The code is valid for less than 24 hours, creating a sense of urgency to take advantage of the deal.

One caveat to this approach: You shouldn’t always include a discount offer in your abandoned cart reminder email, or you’ll run the risk of training your customers to put their desired items into the cart and then wait patiently for your message to arrive before checking out with their discount code. Rather, mix up your pitches and include a discount code in some messages but not all. Below is an example of a follow-up email from Williams-Sonoma that does not rely on a special offer to create an urgency to act but rather a mention of limited quantities and a reminder that the previously selected items will soon be cleared from the cart.

Old Navy: Product review

The strategy: If you’ve ever purchased something online, you’ve undoubtedly received one of these emails. Again, the reason they’re so popular is that they’re so effective.

Reaching out to someone who has already made a purchase from you to ask them to share their opinion about the product or services they received is a winning approach all the way around. The simple act of making the request conveys to your customer that you’re a brand that cares about your customers and their satisfaction. Moreover, when they click through to provide their review, you’re getting the benefit of a first-hand testimonial that will help you sell that product to future customers. You’ve also successfully brought an existing customer back to your site, where hopefully something new will catch their eye, leading to a purchase that will begin the cycle all over again.

Grovemade: Survey

The strategy: The survey request is another sure-fire winner. Similar to the product review prompt, the survey request conveys to the recipient that their needs and opinions are valued.

In this example from Grovemade, customers who have previously purchased a related product are sent a link to a survey to provide input to the company on the design of accessories for the new Apple Watch. This accomplishes two smart marketing objectives. First, it gives the company valuable insights to shape their new product line so that it delivers exactly what their customers want. Second, it creates anticipation among their customer base for an upcoming line of products even while they are still in the R&D phase.

Nike: Celebrate a milestone

The strategy: If you have a website or app that tracks customer activity, you likely have data that will allow you to recognize your customer for reaching a milestone, whether it’s a birthday, the anniversary of their becoming your customer or even a personal accomplishment based on activity logged via the site or app.

This example from Nike is a great case-study in how to make this particular approach work for you. In the email, Nike puts the recipient front and center by keeping acknowledgment of their achievement the primary focus. As a secondary message, Nike includes a “reward” for reaching this milestone in the form of a discount on Nike running shoes. While this is obviously a bit self-serving on Nike’s part, it’s also a great way to foster customer loyalty by providing an incentive to buy at a time when the recipient is most likely to be in need of their product.

The proof is in the results

Market research shows that behavior-triggered emails are a valuable but underused tactic. EmailMonks reports that open rates for triggered emails are 152% higher than those for traditional email marketing messages. Even so, over 75% of marketers are not yet using behavior-triggered emails or auto-responders.

A word of caution

Before you go all-in on behavior-triggered emails, take a moment to consider how your correspondence will come across to the recipient.

Online privacy is a hot-button issue these days. Just because you can capture and use data about your customers doesn’t necessarily mean that you should. The last thing you want to do is alienate a prospect or customer because you are blatantly tracking their activities without their consent. The best approach is to apply the principles of trustcasting and allow your customers to opt in to receiving your messages and to tell you what types of communication they’d like to get. The simple courtesy of obtaining permission can make all the difference between being perceived as a helpful partner or an obtrusive snoop.

Also, as with any email marketing strategy, make sure you don’t wear out your welcome in your customers’ inboxes. Use good sense and restraint in the timing and frequency of your emails. For example, if I browse your e-commerce store, don’t make a purchase, get an email, browse again but still don’t commit, are you going to send me another reminder that I still have items in my cart? These are the kinds of rules and parameters  that you’ll need to establish judiciously for your campaign in order to walk the fine line between smart marketer and pushy salesperson.

Getting started

If you’re not so sure about diving in without your water wings, there are tools that specialize in sending triggered emails, like Vero for e-commerce, Intercom for B2B and SparkPage for B2C campaigns. If email marketing is one of the primary vehicles you rely on to win and retain customers, then it may be worthwhile for you to partner with an experienced software development company to design a customized system that integrates with your website and your CRM and SFA systems to effectively capture and leverage the customer data you need to create the most powerful conversion engine possible.

Setting up an automated behavior-triggered email program does require an investment of time and tactical thinking upfront, but once it’s implemented, your company will reap the benefits of having a razor-sharp communication strategy that resonates with your customers by providing timely information that caters to their interests, preferences and habits.

Tweet, Snap, Share, Post, Pin: Five Creative Ways to Get Your Customers to Do Your Marketing For You

Today’s digital age is also the post-advertising era. Armed with access to nearly limitless data and information, customers have grown disengaged from commercial culture as we once knew it and disillusioned with canned corporate marketing messages.

This is especially true of the latest generation of consumers – the Millennials (aka Generation Y). Encompassing roughly 72 million young Americans, the oldest of whom are now reaching their mid-30s, the Millennials represents the most educated, diverse, technologically proficient generation ever in the U.S., with tremendous spending power that is expected to eclipse that of the Baby Boomers within the next three years.

Another hallmark of the Gen Yers is that they have a strong aversion to "push" marketing and prefer brands that are engaging and already embraced by their friends. According to Christine Hassler, author of 20 Something Manifesto, “Friends are the biggest influencers for Gen Y. If their friends have something and endorse it, that's all they need.”

All of this evidence points to an inescapable fact of doing business in today’s culture of the Web: nothing holds greater sway than word of mouth. If you want to grow – and especially if you want to capture the up-and-coming Millennial dollar – you need the help of your customers and fans.

However, these customers and fans aren’t simply sitting around, waiting at the edge of their seat for the opportunity to promote your products and services. It’s up to you to get the ball rolling by structuring campaigns that reach your customers where they live (i.e., social media platforms) and give them opportunities to share that tap into their motivations and fit naturally with their habits and lifestyle.

Here are five creative ways you can leverage social media to connect with your customers and get them to do your marketing for you:

1. Solicit their stories.

Sometimes spurring your evangelists to spring to action is as simple as asking them to. After all, who doesn’t love sharing stories about themselves?

Everyone can agree that medical supplies is hardly a highly glamorous field. However, Medtronic Diabetes, which develops and sells diabetes management products, has achieved a 2-to-1 return on investment for their entire social media program based on the success of their Share Your Story Facebook app.

Since launching the app in June 2013, nearly 300 customers have shared stories and photos using the app, and over 80% of users have opted to allow their photos and stories to be used by Medtronic Diabetes in other ways. To maximize the mileage they get from this great user-generated content, Medtronic is also proactive about contacting those who have shared their story to participate in photo shoots, video testimonials and guest blogging.

When Steve, a Facebook community member, posted a photo from his 2012 wedding using the app, Medtronic followed up with a request to guest post on their blog, “The Loop,” which the company started as a forum to foster discussion about living with diabetes. Steve happily complied, penning the article “Getting Hitched With Diabetes: The Groom’s Perspective,” which they reposted on their Facebook page.

Key to Medtronic’s success is that they are very specific in the framing of their request. When the company first launched its app, the prompt asked users to share “moments in your life of living well with your insulin pump or continuous glucose monitor,” but they found that the majority of participants would write only one or two lines. In March 2014, they retooled the wording to say, “Share with us your personal story about the pivotal moment you switched to the pump and CGM, and how insulin therapy has helped you focus on the wonders of life,” and they discovered that this more specific request elicited much more rich and detailed tales from their customers.

While you might wonder why Medtronic’s customers are so eager to share their stories, Amanda Sheldon, director of digital marketing and communications, explains: “We know our customers and know that they like to support each other. Our hope that social media would bring this all together was definitely met.”

2. Share the spotlight.

As the relentless onslaught of the selfie has shown us, social media is the ultimate “Look at me!” medium. Tap into your customers’ love of all things me-centric by creating a campaign founded in giving them the opportunity to shine a spotlight on themselves – and on your products in the process.

Clothing brand Free People has come up with an ingenious way to integrate customers' Instagram shots with its website. The company has begun attaching individualized hashtag information cards to its jeans. Customers are encouraged to take pictures of themselves in the pants, tag them either with #myfpdenim or more specific tags for different jean styles (such as #fpanklecrop for the 5 Pocket Ankle Crop or #fpsorbettiedye for Sorbet Tie Dye Jeans). These photos not only appear on Instagram but also on the relevant product’s page on the company's website (after being approved by site moderators, of course) in a special section called "Free People's Style Community."

This brilliant campaign succeeds on two levels. First, by designing a platform that turns their customers into models, Free People has created the ultimate indulgence for the selfie-aholic. Second, they overcome an obstacle that has plagued e-tailers since the concept was invented, which is giving shoppers the confidence to make a purchase without being able to see, feel and try on the product in person. But now, through the magic of Instagram and social sharing, Free People empowers potential buyers to see how a pair of jeans looks in real life. Win-win!

3. Give to get.

Sometimes, you need to be willing to give a little bit in return for the great promotional juice your customers are providing to you. Often brands use contests as a way to motivate fans to snap, share or post in exchange for the chance to win a prize.

However, prizes certainly aren’t the only way to incentivize your followers. An even better way is to share your time and expertise. For example, Zappos – a company that has built its reputation on providing exceptional customer service – has created a forward-thinking Instagram campaign that is the perfect marriage of its trademark service and customer engagement.

Capitalizing on the popular #OOTD (“outfit of the day”) hashtag – which has more than 23 million images attached to it – the online retailer has launched a pilot program for a personalized shopping service called NextOOTD. When a customer posts a selfie with the hashtag #nextOOTD, a Zappos stylist will comb through their Instagram history and respond with personalized shopping recommendations catered to their unique style.

This campaign is social media engagement at its very best. First, it’s easy for customers to participate in. By building on the already familiar #ootd hashtag, it’s a natural extension of a well established habit for Instagrammers. Second, it’s personalized: this concept of selfie shopping allows Zappos to interact with people like a human, not a brand, which is exactly what every company should aspire to do on social media. Finally – in perfect keeping with Zappos’ mission of delivering happiness – it’s a great way to surprise and delight their customers, especially the type of selfie-wielding fashionistas who are most apt to use the #ootd hashtag in the first place.

4. Bank on bloggers (and other influencers).

Here’s an interesting fact for you: Research has shown that one-fifth of the consumer population is composed of key influencers who impact the purchasing activities of 74 percent of the population.

Chief among these influencers are the legions of bloggers and vloggers who have masses of dedicated followers hanging on their every word. If you can put these prominent opinion-pushers in your corner, you can turn the power of word-of-mouth marketing up to 11.

Blue Apron is a new start-up subscription service that delivers meal kits – including pre-measured ingredients and recipe cards – in refrigerated boxes on a weekly basis to its members.

According to Ken Fox, one of the company’s investors, Blue Apron’s target market is comprised of “People who like to cook at home but don’t always have time for shopping,” and their hope is that these people “discover the ease of cooking with Blue Apron [then they] start to do it more often, and to get their friends and family members into it, too.”

And who could fit that profile better than mommy bloggers – specifically Katie Bower of the hugely popular blog Bower Power? Katie has nearly 15,000 followers on Facebook and more than 25,000 on Instagram, so needless to say, there is no lack of moms (and other busy women) who identify with her and look to her for great ideas and advice. And as it so happens, Katie also recently gave birth to her third son, so she has no lack of demands on her time.

For the price of a sponsored post, Blue Apron reached all of her followers in the form of a glowing review written with Katie’s trademark candor – along with a series of fun images depicting the process of receiving the box, unpacking its contents with her adorable boys, preparing the meals and enjoying the dinners together as a family.

The end result is a testimonial that is 100 percent authentic – and 100 percent more effective than anything the company could have said about itself in a perfectly polished ad campaign.

5. Create a marriage of mediums.

All of this talk of social media posting, hashtagging and sharing begs the question: how can you take advantage of your fans’ promotional activities to reach a broader audience that includes those who don’t follow you on these networks?

The answer: integrate your social media campaigns into your traditional marketing efforts. Case in point: Ben & Jerry’s wildly successful #CaptureEuphoria contest.

In 2012, Ben & Jerry’s tapped into its Instagram community (which at the time numbered 120,000+ strong) to cast the starts of its latest ad campaign. The company invited fans to post photos tagged #captureeuphoria that they felt depicted intense feelings of joy. From sunsets to wedding photos to cute dogs to beach scenes, these user-submitted snaps were collected into a special gallery on the company’s website.

One interesting thing you’ll notice about the contest: there was no requirement to feature the company’s products in the photos. Rather the idea was to associate the emotion of euphoria with the experience of eating Ben & Jerry’s ice cream – very clever indeed.

At the conclusion of the contest, more than 25 shots were selected and featured in hyper-local media in the winners’ hometowns in ads that popped up in locales ranging from billboards to buses to neighborhood bars.