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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Go Mobile or Go Home

Once upon a time, not so very long ago, being available to your customers online 24/7 was enough. But then along came the smartphone – and its even more agile cousin the tablet – and the expansive mobile data networks needed to support them. Suddenly the Internet came unfettered from desktops anchored to offices and homes and became a ubiquitous presence in our lives. Today 24/7 just doesn’t cut it. You must be available to your customers not only anytime but anywhere. At the corner coffee shop. In line at the supermarket. At the airport. In the very aisles of your competitor’s store. You may not know for certain when or where your customers might be looking for you, but you can be absolutely sure that you must be there if you want to stay competitive in today’s market. Consider this statistic: smartphones and tablets currently drive nearly seven percent of digital traffic in the U.S. If that number doesn’t wow you, try this on for size: experts predict that by 2013 – that’s next year – more people will access the Internet via phone than computer. It all boils down to this: the proliferation of smartphones and tablets in the past few years has changed the game. If you’re in it to win it, you have to go mobile or go home. But where do you start?

Look before you leap.

Before you take the plunge into the world of mobile, it’s a good idea first to figure out where you currently stand so you know where you need to go and how best to get there. Peruse your website on as many different devices as you can get your hands on. Put yourself in the shoes of your customers, and evaluate the quality of your experience as you navigate through your site. How easy or difficult is it to select the specific link you want? If you have a lot of images on your site, how long does it take to render on a mobile device? Can you quickly and easily complete critical actions like locating contact information, filling out an inquiry form or even making a purchase? If you identify any obstacles, or if the overall experience is frustrating in any way, you need to take action to make sure you give your business the best chances of capturing and converting mobile browsers. There are a number of ways you can bring your site into the mobile era. To decide which approach is the right fit for your business, you must weigh your options based on your growth objectives and your customer’s browsing habits.

Option 1: Build a dedicated mobile site.

A good mobile website is not simply a shrunken version of your primary site. It’s designed specifically to deliver an experience that’s optimized for the needs and preferences of the mobile user. Keep in mind that these users aren’t typically casual browsers; they’re usually after a specific bit of information or seeking to accomplish a specific task. As a result, mobile websites don’t usually offer all the bells and whistles of their desktop equivalents. Rather, the content and functionality are pared down significantly to offer only those features that are most useful to those on the go. For example, while mobile users frequently comparison shop on their phones, they might not be as likely to actually go through the entire purchase process on their handheld device. As a result, you may not need to offer a full-fledged shopping cart on your mobile site. Instead, you might offer the capability for customers to log in to their account and save desired products to a wish list so they can quickly and easily complete their purchase later when they return to their desk. Great mobile websites have certain elements in common. They focus on critical needs, such as providing access to key services and products and contact information. They limit the use of images to minimize page load time. They offer easy, intuitive, finger-friendly navigation. If forms are included, they are streamlined and ask only for the most essential information. They don’t employ Flash, since Flash-based content is inaccessible to all iOS users.

Option 2: Employ responsive design.

Responsive design is the concept of building a website so that the layout of the site adapts and changes according to the resolution of the user’s browser, which means that it looks just as good and performs just as well on a 27-inch desktop display as a 3.5-inch iPhone and all screen sizes in between. The design is fluid and adapts to the the browser and the platform on the fly. However, the change is more than just a straightforward scaling effect; rather, certain key elements within the design – such as navigational menus, links and search fields – shift and transform according to the resolution of the browser. Employing responsive design allows you to deliver a robust experience to all users without the need to build and maintain a separate dedicated mobile version of your website.

Option 3: Get app-y.

A native app can be a fantastic mobile marketing tool, if done right. However, it’s not the right solution for everyone. Before you go down the app-building rabbit hole, there are a lot of questions to answer and obstacles to overcome. How big is your customer base? Apps require a certain scale to make sense. If you’re a mom-and-pop bakery, for example, you could theoretically develop an app that would let your customers design their own cupcakes and place their order right from their phone. While it would surely be a fun gimmick, it doesn’t fulfill a broad-based need, and the app’s ability to generate additional revenue would probably never offset the cost to create and maintain it. That brings us to another point: you must carefully consider your ROI. If you sink many thousands of dollars into development and get it approved, will people really use it? If you can’t develop an app that offers something people want and will use frequently – whether that’s in the form of utility, convenience, content or all of the above – chances are good that your investment will end up buried in the app marketplace collecting dust. Remember, too, that when you’re dealing with apps, you either have to develop a version for each operating system (Android, iOS, etc.), which can be a costly proposition, or choose just one and ignore the needs of a huge percentage of your potential customer base, which is never a smart business decision.

Be a contender.

When it comes to mobile, convenience and conversion are the name of the game. From a business growth perspective, it’s critical to ensure that your products or services are easily accessible to mobile users so you can boost your chances of capturing and converting an increasingly untethered customer base.

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Fit or Fad?: Choosing the Right Social Media Networks to Connect with Your Customers

This just in...

Pinterest is now a marketing tool for business. That is, if the chatter emanating from LinkedIn groups and marketing white papers is any indication. Yes, there are already white papers. In just over a year, Pinterest has edged its way up the Alexa rankings to claim a spot on the 50 most visited sites in the world. It has even surpassed such well-established powerhouses as PayPal, CNN, Netflix and The Huffington Post to claim its stake as the #16 most visited site in the U.S. “But what the heck is Pinterest?” you may be wondering. I’ll let this hot new social site pin it down for you: “Pinterest lets you organize and share all the beautiful things you find on the web. People use pinboards to plan their weddings, decorate their homes and organize their favorite recipes.” Wait a minute…this bastion of all things bridal, bed sheets and baked goods is now big business? Really? How did this happen? And what does it mean for your business, if anything?

The quick and the dead

Social media is the new wild west of marketing…at least it often feels that way. In just the past few years, we’ve experienced a revolution in the way information about our world, our products and our customers is collected and shared. Connections are raw and direct with little room for error. As a result, it’s no surprise that 140-character faux pas from high-profile tweeters have become evermore commonplace – not to mention the number of noteworthy public scandals brought to light by social media missteps. And then there’s complexity of the social landscape, which changes like the Nevada desert – a few boulders (Facebook, Twitter, LinkedIn) surrounded by a sea of shifting sand, posing a challenge to any business to keep pace. So in this environment of constant flux, how do you remain relevant and cutting edge? How do you balance caution and agility in responding to new platforms? How do you make the most of limited resources? And who’s going to do all this posting, tweeting, +1ing and pinning, anyway? After all, not every business has the luxury of a dedicated, in-house social media guru.

Here’s the good news…

Using the right social media tools in the right way is far more important than using every tool in the box. A carefully curated approach can create stronger ties between your company and your customers while providing the greatest return on your investment of resources. Here’s a step-by-step guide for identifying those networks that are the best fit for your business model, capabilities and customer base.

1. Know where your peeps are.

For major consumer brands like Coke, Nike, Comcast and other B2C juggernauts, it’s important to be everywhere. Fortunately though, they also have the budgets and the manpower to sustain such efforts. Your brand, on the other hand, probably doesn’t need to be everywhere; you just need to figure out where it’s best to be. The key to maximizing the value of your social media efforts is knowing where your customers live online. Just as with all marketing efforts, success starts with knowing your audience, their habits and preferences. If the type of customer you serve isn’t likely to be active on Twitter, there’s no need for you to invest your time there. On the other hand, if your target is young moms, up-and-comer Pinterest is probably a great place to connect with these individuals. Don’t be afraid to stop investing resources (human or monetary) in poor performers. For example, I work for a consulting firm that manages enterprise software projects for utilities. Because the corporate culture of these types of companies tends to evolve very slowly, many of our prospects were still blocking employee access to Facebook and Twitter until just recently. So, historically, those outlets have offered our firm little lead-generation value. However, nearly everyone I meet has a LinkedIn profile, so our firm has a strong presence there, with many of our staff actively involved in LinkedIn groups. Find where your people are and join the conversation.

2. Align social media with your business model.

Every social media site has its own strengths and benefits, so it’s up to you to determine which ones best enable you to showcase and promote your products or services. Full-platform sites like Facebook and Google+ offer the greatest flexibility and the broadest audience, but there may be others that can better serve your unique marketing goals. For professional photographers, sites like Flickr and Instagram make it easy for people to discover and share your work. They’re also where you’re most likely to connect with people who are passionate about great photography. On the other hand, sites like Groupon, Yelp, Zagat and Foursquare are built around local deals and local reviews. If you’re a brick-and-mortar shop, these sites can help boost your traffic – the kind that walks through the door with cash to spend. Consumer products – especially those that are design or taste oriented such as fashion, housewares and tech gadgets – are likely to perform well on sites like Pinterest that let users curate collections of things they like. And if you’re in a B2B business, LinkedIn and Jigsaw are great sites for building your network and working leads while Q&A sites like Quora and Focus offer a platform to showcase your expertise and build trust with prospects by answering questions posted by the community.

3. If you show up, come ready to engage.

With social media, you get back in proportion to how much you give. If your company makes the commitment to join a community, you must be prepared to become an active an engaged participant in it. You can’t expect your tribe to accept you and – more importantly – follow your lead if you’re not willing to put in the work to contribute something of value to their community on a consistent and ongoing basis. It may take a while to gain momentum, but as you get to know a community’s values and style of interaction, your sphere of influence and the marketing capital that comes along with it will grow steadily. Fame Foundry friend Gary Vaynerchuck lives on Twitter. He has over 900,000 followers and can stir a mass of them to action at will. I have experienced this phenomenon firsthand, having watched (and participated) in amazement as Gary went on a one-day Twitter binge to push his book The Thank You Economy to the number one spot on Amazon on the day it was released. Although he did not hit number one on the bestsellers list, he did make it to number six…and number two on the “Hot New Releases” list…and number one on the “Movers & Shakers” list, increasing his sales by over 200,000% within 24 hours. That’s the power of becoming an integral part of a community, a leader of a tribe that speaks and is listened to. What kind of blitz for your business could you create with 500, 5,000 or 500,000 followers?

4. Don’t be lazy.

When you post new content on one site, it’s awfully tempting to syndicate – or rebroadcast – it everywhere else. For example, it takes no effort at all to republish your Twitter feed to your Facebook Page or LinkedIn profile. It’s so easy, and there’s no harm in doing it, right? Not necessarily. Your Facebook fans might not appreciate having their news feeds cluttered with your tweets and retweets. And LinkedIn isn’t necessarily the right venue for all the casual exchanges you might participate in on Twitter. It’s a right time/right place/right manner thing. Let’s be clear: I am not saying that you should post content in only one place. I am saying that it is best to adapt that content to the needs, expectations and etiquette of each community. You must shape and massage your content to make it relevant to both the platform and the people. For example, let’s say your business is hosting a special event. You can live-tweet the event as it unfolds, publish a recap of the highlights on your company blog, post pictures from the event on Facebook (particularly if you’re “tagging” participants in the photos), make the presentation slides available on LinkedIn or SlideShare and host follow-up discussions on a proprietary business forum site. You’re still getting great social media mileage from this one single event. But by tailoring your content to the interests and preferences of each community, you’ll give people a reason to follow you in more than one place while preventing information burnout for those who already do.

5. Don’t overlook the easy targets.

Some social sites truly are “set it and forget it,” giving you invaluable exposure while requiring relatively little active involvement. These are reference and review sites for which the benefits of being represented far outweigh the minimal monitoring requirements. If you’re a local business, be sure to keep an eye on word-of-mouth review sites like Yelp and Zagat. Make sure the information listed about your company is accurate. Check in bi-weekly or monthly to see how reviews are fairing. Respond to negative feedback in order to make things right.

A more difficult but highly rewarding option is to establish a Wikipedia entry for your company. While there are a few hurdles you must overcome in order to make this happen, the benefits are tremendous. In addition to further legitimizing your company in the public eye, a Wikipedia entry is a great way to secure a prominent position in Google search results – no sponsored-listing dollars required.

It's not easy, but it is worthwhile.

The underlying principle for all of these tips is that you must put your customers and prospects first. Serve their needs, promote their interests and conform to their expectations of conduct. Share your time and expertise generously and give your fans good reason to like and share your brand and products with their friends. It all comes down to this: to use social media effectively to promote and grow your business, you must find the right fit and then work hard to fit in.

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