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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The Anatomy of Viral Marketing

Three deadly myths of viral marketing

“Viral” is a term that’s thrown around very loosely by marketers these days, which has muddled the true meaning of the term.

Here are three common misconceptions about viral marketing that will doom any campaign to failure from the start:

Myth #1: Viral marketing = Share buttons

Making content sharable is not the same as making it viral. Viral marketing is not as simple as adding social sharing badges to your website. Likewise, extending your content to social networking sites such as Facebook, Twitter and LinkedIn will not make it viral.

These are merely vehicles that make it easier for people to pass your content along to others in their network. There’s no guarantee that whatever is being shared will have life beyond the initial posting.

Myth #2: Viral = Video

“Viral” and “video” are uttered in the same breath so often that it seems as thought they are inextricably linked.

In fact, this is not the case at all. There’s nothing about videos that makes them inherently more viral than any other kind of content.

Viral videos may get a lot of hype, but in reality, any kind of content can go viral – a photo, an article, a fundraising campaign, even an entire website.

The potential of something to go viral has nothing to do with the medium and everything to do with the content and its ability to motivate a continuous chain of sharing.

Myth #3: Viral = 1,000,000 million hits

Going viral is not the web-equivalent of a record going platinum. There’s no arbitrary number that certifies something as having gone viral.

The primary goal of viral marketing should not be to achieve a pre-determined number of hits, views or retweets but to create something with nearly unlimited potential to resonate with people – whether on an emotional, pragmatic or ideological level – so that its reach exceeds ordinary expectations.

What is viral?

By definition, viral content is self-perpetuating and requires little or no additional investment in the act of moving it through the Web from one person to another.

To answer that question, forget marketing jargon and go back to biology class. What sets a virus apart from other organisms is that it has the ability to replicate itself when it finds the right environment variables.

The same quintessential elements apply to viral marketing. By definition, viral content is self-perpetuating and requires little or no additional investment in the act of moving it through the Web from one person to another. It is the very opposite of traditional advertising’s pay-to-play model, which demands greater spending to buy greater exposure.

The concept of viral marketing is nothing new, but it has exploded in the past decade because the mechanisms for sharing have evolved and expanded as social media has permeated the mainstream.

The original form of viral content was the e-mail forward. When someone found something entertaining, informative or self-defining, they’d paste it into an e-mail message and send it to everyone in their address book, and many of those recipients would likewise forward it along. Social sharing is today’s version of the e-mail forward.

On the surface, viral marketing seems easy because the most successful campaigns make it look that way. However, once you dig deeper into its anatomy, it becomes clear that there are a limited number of pathways through which a piece of web content can go viral.

It’s not enough for something just to be good. There’s too much good stuff on the Web for all of it to catch fire. If you want to create something that will grow and extend itself after you send it out into the world, it must harness one of three fundamental elements of self-perpetuating content: entertainment, a giveaway or self-definition.

The three channels of viral marketing

1. Entertainment

This category is probably what naturally springs to mind when you hear the word “viral.” However, this is actually the most difficult route to take and demands a level creative resources that are typically prohibitive for the average business.

With the hype surrounding high-profile viral marketing campaigns like Old Spice’s “The Man Your Man Could Smell Like,” it’s easy to oversimplify the formula for what it takes to pull this off. Everyone thinks their own stuff is entertaining, but in the eye of the beholder, this is rarely the case.

When you attempt to play in this space, you’re going up against the big guns who have immense resources to throw at superstar writers, artists, editors and producers. In the face of those odds, it’s very risky to hope that you’ll strike the magic combination of unique content and flawless execution to win the jackpot.

For every phenomenal success like Old Spice, there are plenty of embarrassing, high-dollar flops. And, yes, sometimes a kid with a webcam becomes an Internet sensation. But that’s like capturing lightning in a bottle. It’s nothing you can create artificially, and it's very difficult to cultivate organically.

2. The giveaway

In stark contrast to viral entertainment, the viral giveaway is potentially attainable by any business large or small, local or national.

There are two ways to approach this type of campaign, depending on the nature of your business:

If you deal in goods, you can give away free or discounted products to customers (think Groupon).

If you deal in services, you can give away time or expertise (or both).

In either case, there is heavy competition in the giveaway space, so it’s critical to ensure that there is significant perceived value in your offering, typically in terms of time or money saved for your customer.

But the giveaway is not viral in and of itself. What creates the mechanism for self-perpetuation is framing it as a reward received in exchange for participation in spreading your message.

This is something not all companies are prepared to do. The idea of creating something only to give it away seems ludicrous by conventional thinking.

However, you can’t look at the giveaway as a loss. The reality is that this is today’s marketing. Instead of pouring tens of thousands of dollars into carpet-bombing advertising that no one believes in, you’re investing in word of mouth – the most powerful form of trustcasting.

The act of giving away your valuable goods or expertise creates trust among your customers, who pass your message along to their friends and followers, who then spread it through their networks. Suddenly hundreds of new potential customers suddenly know who you are and what you do, with the added benefit of being recommended by someone they know and trust, and that trust is conveyed to you by association.

3. Self-definition

A product, an idea or a concept that is new, innovative, unique or just plain awesome is sharable.

But when it makes a bold statement – not about your company but about life, work or culture – that strikes a chord in the beholder, that’s when it has the potential to go viral.

When someone shares this type of content, they’re defining themselves through the act of sharing, attaching themselves to the history, the character or the lifestyle that exists around your brand. They’re identifying themselves as belonging to your tribe.

When Nike’s “Write the Future” debuted in May 2010, it set a new record for the most views of a viral video ad in its first week.

Its popularity was undoubtedly due in part to the celebrity appeal of the soccer superstars featured, but it also touches on a deeper love for the sport, for the World Cup and even for the feeling of connection with others inspired by a shared passion for a certain team or player. When someone shares this video with their friends, they’re attaching their identity to these broader concepts.

But you don’t have to be Nike to pull this off. If I post a link to your blog to my profile on LinkedIn, I’m defining myself as a torchbearer for your ideas. If I take a take a quiz on your website and tweet my score, I’m boasting about my intelligence. And if I make a donation to your nonprofit organization and share it on Facebook, I’m defining myself as an altruistic person who supports If your cause. In each case, my act of sharing challenges other like-minded people within my network to do the same, because they want to attach themselves to these ideas and qualities, too.

Execution

Viral marketing can’t be a one-off effort. You also can’t come up with an idea and tack on elements of viral marketing as an afterthought.

Viral marketing must permeate every aspect of your business model.

If you're going to play in this space, it must permeate every aspect of your business model, from your R&D process to your pricing structure to your marketing strategy. Your website and your presence on social media networks must be built to be part of the viral mechanism. You must focus on creating a self-perpetuating engine of traffic, conversion and sales.

To be successful, you must know your tribe and know it well. You must be realistic about what its members like and what they will respond to.

You must also be willing to take risks. Behind every successful viral campaign is trial and error, careful tracking of metrics and fine-tuning of the approach.

Are the risks worthwhile? In a word, yes. Today's most powerful business growth platforms are built on trustcasting and permission marketing. There’s no more direct route to owning your market than having a tribe of brand evangelists who carry your message for you, and viral marketing transforms the spark of word of mouth into an inferno that propels you ahead of your competition.

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Rediscover the Lost Art of Focus

Does this sound like a typical occurrence in your day? You've just wrapped up one task, and before you move on to the next, you decide to take a quick break to see what's new on Facebook. Hey, look – your friend posted a link to an article in the New York Times. You click through to read, and when you're done, one of the related articles catches your eye. That one leads to another and then another. When you finally reemerge from the rabbit hole of link-clicking, you realize that half an hour has evaporated. Or perhaps your e-mail notification alert chimes, and you click over to find a reminder that your car is due for service. While you’re waiting on hold with the dealership to schedule your appointment, it occurs to you that you haven't checked the balance in your bank account lately, so you log in, and then you remember that you also need to pay your water bill. Before you know it, what began as a simple two-minute task has become a 20-minute derailment.

The cost of disruption

But a few distractions during the day are harmless and practically unavoidable, right? Not so much. All those minutes wasted here and there turn into hours that come with a high price tag if you're your own boss. When you're an entrepreneur, your time is your most valuable asset. When you're an entrepreneur, your time is your most valuable asset, and one of your most important responsibilities is being a good steward of that asset. Every minute frittered away on Facebook, YouTube, blogs and even mundane chores is a minute you're not spending innovating, selling or shipping. In reality, no matter how dedicated you are to your business or how deep your passion runs for what you do, staying focused can be a challenge. Between phone calls, e-mail, social media sites and routine daily to-dos, your attention is constantly being pulled in many directions at once. However, it is possible to quiet your mind and rein in the distractions, but to do so, you must recondition your brain. If you're serious about increasing your productivity, you must commit to a structured regimen of daily practice in regaining your focus, just as you would if you were training to improve your speed and endurance in running or cycling.

The Pomodoro Technique

One of the best methods for cultivating your powers of concentration is the Pomodoro Technique. In a nutshell, this technique is a time management tool that breaks the working day into units of 25 minutes called "Pomodoros." Use the clock as a time cop and obey it relentlessly. To get started, all you need is a timer, a notebook and a pen. When your day begins, make a list of all the tasks you must accomplish in order of priority. Set the timer for 25 minutes, and start working on the task at the top of the list. Focus on this task and only this task until the timer chimes. When the timer goes off, mark an x next to that task on your list and give yourself a short break of no more than three to five minutes. The purpose of this break is to let your mind rest and disconnect, so don't keep thinking about what you were just working on, and don't get wrapped up in responding to e-mail or returning a call from a client. Instead, relax, get up and stretch, read an article on your favorite blog or take care of one item on your personal to-do list. After every four Pomodoros, take a longer break of 15 to 30 minutes. Then simply repeat this cycle until your workday is done. The key to success in implementing the Pomodoro Technique is to use the clock as a time cop and obey it relentlessly. Be sure to set the timer for breaks, too, so that you're not tempted to extend them beyond the allotted time. However, always keep in mind that breaks are equally important as the 25-minute Pomodoros, so don't work through them in your eagerness to finish your task, either. The breaks are there for a reason – to allow you just enough of a mental refresher to keep you razor-sharp without getting sucked into a vortex of distraction.

Put time back on your side

As you adapt to this new daily rhythm, you'll be amazed how quickly the clock ceases to be your enemy and becomes your ally. You'll also realize how many times throughout the day you habitually allow yourself to be interrupted by distractions like Facebook and Twitter just because they're there. Reclaiming lost time in your day is critical to getting the most out of your business growth efforts.With practice, it will be easy to tune anything and everything out for 25 minutes. Knowing there is a break ahead is a great source of motivation. When you're tempted to check e-mail or see who's on IM, look at the clock first, and make yourself stick it out, knowing you never have more than 25 minutes until the next break. The Pomodoro Technique is much more than just an exercise in self-discipline; it's also an invaluable resource to help you take control of your time and boost your productivity. Because you keep a running daily log of how many Pomodoros it takes to accomplish each task, you will develop a very clear picture of how long each activity takes, which will help you estimate and prioritize projects more effectively so that you don't find yourself racing to meet deadlines. You can also identify tasks that are absorbing a disproportionate amount of your time and develop more efficient ways of getting them done. Reclaiming lost time in your day is critical to getting the most out of your business growth efforts. When your focused work time is more productive and your downtime is kept in check, you'll be amazed at how much you can accomplish when you quite literally put your mind to it.

Further reading

To learn more about the Pomodoro Technique, download the free instructional e-book at  www.pomodorotechnique.com.

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