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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How Warby Parker Conquered Social Media (And You Can Too)

Warby Parker is an eyewear company on a mission. In 2010, co-founders Neil Blumenthal, Dave Gilboa, Jeff Raider and Andy Hunt set out to revolutionize their niche by creating boutique-quality, classically crafted eyewear at a revolutionary price point.

Today, they sell frames and lenses together for a flat low price of $95. Not only do they produce a high-quality, affordable product, but they also do so with a conscience: for every pair of glasses sold, a pair is given to someone in need.

It’s an indisputably great concept. But how did they skyrocket to success so quickly? Well, they had a little help – from the community of followers and evangelists they’ve cultivated through their activities on key social media networks, specifically Facebook, Twitter and Pinterest.

While their business model may be unique, their approach to community building offers great lessons in social engagement that you can implement to fast-track the growth of your business:

Facebook

How they did it: Warby Parker is currently just shy of 100,000 followers and still growing daily. The strength of their appeal on Facebook lies in their prolific use of images through status updates, albums and user engagement campaigns.

Since the arrival of the Facebook timeline, images are more important than ever. According to Facebook Marketing, “photos and videos get 120% and 100% more engagement respectively.”

How you can do it: The equation is simple: more images means more interaction, so it’s time to get visual.

Here are a few simple ways you can amp up your use of photos and videos on Facebook:

Attending an event? Snap a photo or video and post it to your page. For greater convenience, install the Facebook Pages app on your smartphone so you can share on the spot without needing to be near a computer.

Published a new blog post? Share the photo you used in the post, then caption it with a catchy hook followed by “Read more here:” and the URL.

Just released a new collection of products? Create an album featuring a photo for each new item in your link along with a quick description and a link to your e-commerce site to drive sales.

Twitter

How they did it: With nearly 28,000 followers to date on Twitter, Warby Parker (@WarbyParker) has a well-branded page and a strong team of community-builders behind their tweets. One of their strongest assets is their consistency in responding to customers, potential customers and fans.

Take a quick peek at their Twitter page, and you’ll instantly notice an unending list of tweets in direct response to another Twitter user. According to Carol Rozwell, vice president and analyst at Gartner, “The dissatisfaction stemming from failure to respond via social channels can lead to up to a 15 percent increase in churn rate for existing customers.”

While it’s impossible and impractical for a growing company to respond to every mention on Twitter, it’s an important practice to engage as much as possible with the community. From my own personal experience I can say that I’m much more likely to be a loyal customer of and an evangelist for a company, product or service that responds to me than one that doesn’t. Not surprisingly, my personal choice of eyewear is, in fact, Warby Parker, and much of that has to do with the responsiveness and excellent customer service they provide through Twitter.

How you can do it: Responsiveness is the name of the game. You should try to over-serve your customers at every turn.

The most efficient way to do this is to assign a specific person — ideally a customer service specialist who is also socially savvy themselves — to monitor your Twitter feed on a daily basis. By delegating the task to one person, you can ensure that your responses are consistent, timely and safeguard the value and reputation of your brand. With the pace at which the social media world moves, if a comment or concern from a follower lingers for even a few hours unanswered, people will take notice and will perceive that you have ignored their tweet.

One important cautionary note: if a follower brings up a problem, acknowledge it publicly, then resolve it privately via phone or email.

Pinterest

How they did it: Much like they’ve done with their Facebook presence, Warby Parker has used the power of images to connect with their customers on Pinterest. They currently have over 6,000 followers, 27 boards, 1,800 pins and more than 1,600 pin likes.

It’s worth noting that they are using Pinterest in exactly the right manner – not as a tool for shameless self-promotion but rather as a vehicle to provide greater value to their customers and to create an overall image for the brand that people gladly want to identify themselves with. For example, one of their boards is called “Jasper: A Vintage Outlook,” and simply features vintage-inspired images that echo the brand’s look and feel.

Another technique they use is cross-promotion. On their “Bespectacled Bloggers” page, they feature bloggers wearing Warby Parker frames. This serves to not only add credibility to the brand, but also to increase traffic to blogs that support Warby Parker. It’s a win-win.

How you can do it: Focus on providing value first and foremost, and allow promotion to happen organically as your followers take your great content and run with it.

Self-promotion need not be avoided completely; however, it’s important to do so in a tasteful fashion and not to let your social media sites be solely focused on you. This will allow you to generate a real community around your brand, product or service, because you’ll become a source rather than a salesperson.

Much like Warby Parker has done with their Pinterest page, think about the kind of things your consumers are interested in (other than your product), and provide valuable content based on that. People will be more inclined to engage with what you post when it’s valuable to them, rather than when they feel like they’re being sold something all the time.

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Don’t Fear the Reviewer

Does the idea of allowing your customers to rate your products on your website make you uneasy? If so, it’s time to reverse your thinking: don’t fear the reviews; fear what their absence is costing you. Here are four reasons why encouraging your customers to post product ratings will not only strengthen their allegiance to you but also help you capture more sales:

Break through the trust barrier

As we established previously in our article on the culture of the Web, the Internet collective harbors an inherent mistrust toward all corporate entities, and unfortunately for you, retailers are no exception to that rule. On the other hand, peer validation is everything. No matter what you do or what you sell, if people love it and vouch for you, you’ll be strongly positioned for success. In the absence of this corroboration, you face a significant burden of proof to overcome the natural skepticism of the collective. What does this mean for you? You can spend hours meticulously crafting eloquent descriptions for each and every product you sell, but they will never carry the weight of a review that one of your customers spends five minutes to dash off. Reviews demonstrate that you stand behind your products and you have nothing to hide.Fair? Perhaps not. True? Absolutely. It’s all about trust. However, when it comes to trust, you actually get extra credit for the very fact that you do empower your customers to publish their feedback on your site. For new visitors who may not be familiar with your brand or your reputation, these reviews are a badge of transparency that demonstrate that you stand behind your products and you have nothing to hide.

Tip the scales in your favor

Online shopping is a fact of life in today’s world. However, as commonplace as the act of buying 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. This effect is multiplied for certain types of merchandise like clothing and shoes. I may know that I generally wear a size 11 running shoe, but when deciding between different brands and styles, how can I tell whether my chosen shoe will run true to size, offer the level of cushioning I desire and be comfortable for a five-mile jog? The last thing you want in this situation is for me to give up and go to a bricks-and-mortar store where I can try before I buy, even if it means paying a bit more for that luxury. This is where customer reviews can save the sale by providing the reassurance I need to feel confident that the particular shoe I have selected will meet my expectations.

Turn your customers into salespeople

Returning once again to the qualities that define the culture of the Web, one of the fundamental characteristics of the Internet collective is their compulsive need to share. As a result, when someone buys something that they love, it’s practically second nature for them to talk up their purchase on sites like Facebook and Twitter. This tendency is all the greater when they can boast about a particularly unique find or an especially good bargain, as they seek the approbation of those in their social networks. It’s the virtual equivalent of taking a girlfriend along on a shopping excursion and having her ooh and ah in approval over your selections. Why not give your customers a soapbox to exercise their habitual need to share on your own site, where their opinions can help persuade other shoppers to purchase the same product when it is right there in front of them, just one click away from landing in their cart? One of the most effective customer review systems we’ve encountered is on gap.com. Not only does Gap allow customers to provide thorough evaluations of each item in their own words, but each product can be rated on several different criteria, including overall sizing, fit through the arms, chest and shoulders as well as the type of occasion for which the item is best suited (i.e. work, going out, etc.). If the prevailing sentiment among reviewers indicates that a shirt runs small or tends to shrink in the wash, I know right away to order a size larger than usual, and I can feel certain that I won’t regret this decision when my order arrives at my doorstep. Furthermore, let’s say I’m a little iffy on whether or not to buy a pair of pants based on how they look in the photographs. Rave reviews from those who have already purchased and worn the same item can provide the tipping point that will persuade me to add them to my cart. Detailed and informative reviews give shoppers the confidence boost they need to complete the transaction.As these examples demonstrate, not only will detailed and informative reviews give shoppers the confidence boost they need to complete the transaction, they can also provide enticement to splurge on additional unplanned items. As a result, chances are good that you will yield a greater number of conversions as well as an increase in the total amount of each sale.

Do your own market research

Your customers buy products from you. Inevitably, those customers have opinions about their purchases. If only you could benefit from knowing what their opinions might be. It just so happens that you can, and you don’t have to spend a boatload of cash on a consumer research study to do it. When you invite your customers to post their reviews of your products on your site, you not only open a direct line of communication, but you also send a clear message that you care about what they have to say. Open a direct line of communication with your customers.Better yet, because it is up to the customer to take the initiative to provide their feedback and they can do so with relative anonymity, you can be confident that you are receiving their honest and unfiltered opinion – much more so than if you tried to solicit a response face-to-face or with a formal survey. Although these reviews do not represent a statistically accurate sampling of all your customers, they can be instrumental in revealing insights that can be invaluable in helping you shape your product offering to better meet their needs. Even when you’ve done your homework and made your best effort to provide a great selection of high-quality products that align with your customers’ interests and concerns, there’s nothing like the candid reassurance of those customers to let you know that your instincts were right. You might even find an unexpectedly strong preference for a certain type of item over another, in which case you can consider expanding your offerings in that category. But wait! What if the feedback you receive is negative? You should be equally appreciative of the opportunity this creates to go back to the drawing board and figure out better ways to give the people what they want. Maybe the response is “I like this, but I really wish it had more of that.” Without reviews, this sentiment might never have come to light, and your customers might have just silently drifted away, leaving you wondering where they went and why. Or perhaps your reviews alert you to a problem that emerges when a product is used over a prolonged period of time or in a particular set of real-world conditions. Even the best quality control efforts can’t forecast and circumvent every potential pitfall, but armed with this knowledge, you can take proactive measures to address the issue and make it right.

Open the door to greater success

If you’ve made the investment in creating a smart, user-friendly e-commerce store, why not seize the opportunity to yield the most from that investment by adding functionality that can multiply your sales? If you’re not sure where to begin, let Fame Foundry’s expert web development team help you develop a customer feedback module that is custom-tailored to fit your brand, your product line and – most importantly – your customers.

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