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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Four Ways to Delight – Not Annoy – Visitors With the Element of Surprise

During its most recent keynote event, Apple announced that it had a surprise in store for their customers: every iTunes accountholder in 119 countries would receive a free copy of U2’s latest album “Songs of Innocence.” This giveaway translated into over half a billion albums given away, representing the largest release in history in a deal that is speculated to have cost Apple $100 million dollars. It would be easy to assume that Apple’s customers would be thrilled by this generous gesture. While many certainly were, there was also a very vocal segment who were not so pleased to see this album suddenly appear in their music collection. Many of these naysayers took to social media to express their concerns, which were centered not as much on the album itself but rather on the way that its delivery had been handled. While Apple undoubtedly thought that they were providing a convenience by automatically pushing the album out to all iTunes accounts, in doing so, they took away the customer’s ability to choose whether or not they wanted to receive this gift. What was meant to be a nice surprise came across as an act of overstepping the bounds of privacy for some customers – definitely not what Apple was hoping for when they conceived this promotion. Employing the element of surprise in marketing and in web design is tricky business. When done right, it can delight your customers, but if handled incorrectly – as with the Apple giveaway – it has the potential to frustrate and alienate them instead. Let’s take a look at four ways to use the unexpected to make a favorable impression on your website visitors and leave them wanting more – and the pitfalls to avoid along the way.

Surprise! Here’s a free gift!

Freebies have long been a staple of marketing and promotion. From product sampling to contests to incentives for joining a mailing list or sharing contact information, they are an effective way to break the ice when building relationships with new customers. There’s nothing wrong with a good giveaway – as long as you obey the fundamental rule of trustcasting, recognizing that all promotional efforts must be founded first and foremost in building trust with your customers and website visitors. As we touched on above, the problem with Apple’s U2 album promotion had nothing to do with the giveaway itself but rather with its delivery. Permission is a key element of trust-based marketing, and Apple’s circumvention of the act of permission seeking was perceived as a violation of trust by some iTunes customers. A direct contrast to this is MailChimp’s free t-shirt promotion. When a new customer opens a paid account and sends their first email campaign, they receive a message of congratulations along with the offer of a free t-shirt. In order to receive the t-shirt, however, the customer must select the size they would like, thereby accepting the offer; the shirt doesn’t simply turn up unexpectedly in their mailbox. Of course, we have no way of knowing how many people actually decline this free gift, but regardless of whether it’s zero percent or fifty, the most important aspect is the respect for the customer demonstrated by the act of seeking permission. MailChimp allows the customer to maintain a sense of control over the transaction rather than removing that control the way that Apple did. As this comparison shows, permission is a make-or-break element between a surprise that delights and one that compromises trust and goodwill.

Surprise! You’ve got mail!

Email is definitely an area of online marketing that’s fraught with pitfalls. You can be a welcome presence in your customers’ inboxes, or you can be a nuisance that’s banished to the junk mail heap. One way to practically guarantee that you’ll end up in the latter category is by “surprising” your customers with a flood of emails that they did not expect to receive. Undoubtedly, you’ve experienced this scenario at some point: you make a purchase from a website or register for an account, and all of a sudden your inbox is overrun with promotional emails from that company trying to get you to come back to their site and buy, buy, buy. Make no mistake: the simple act of placing an order is not an invitation to unleash a deluge of spammy messages. Again, returning to the theme of permission, the first step to ensuring that your emails are welcome is by allowing your customers to explicitly request to receive them. A common way to accomplish this is by including a mailing list opt-in on your site’s checkout form accompanied by a message affirming that the customer wishes to receive updates with special offers and future promotions. In and of itself, this is a fine practice. If someone wants this information, allow them to receive it! The problem is that many companies have this option selected by default, and as a result, in their rush to complete their transaction, many customers will overlook this feature entirely and will unwittingly opt in to the series of emails that will follow. Again, this is an unpleasant surprise that does not contribute to improving the customer’s perception of your brand. If you are going to employ a mailing list opt-in checkbox anywhere on your site, make sure that it’s unchecked by default and that customers must actually see, read and make a conscious effort to elect to receive ongoing communication from you. Your mailing list won’t grow as quickly this way, but you will avoid surprising unwitting subscribers with emails that they did not expect or want. But obtaining permission to send these emails is only half the story. You also need to make sure that the content of your messages is designed to delight. Anything that is purely self-promotional in nature will be regarded as nothing more than an annoyance. You must use your carefully garnered inbox privileges to provide value to your customers – whether that comes in the form of special offers, fun promotions, reminders about upcoming events or just plain useful information. Your focus should be on crafting email campaigns that leave your customers looking forward to seeing what you’ll send next – not hitting the “spam” button as soon as it lands.

Surprise! Let’s watch a video!

Video content is a great way to engage with visitors to your website. As much as we writer types are loathe to admit it, people don’t like to read. They like to look at pretty pictures, and even more, they like to be entertained by videos. If you can create compelling videos – whether they demonstrate your products, offer helpful tips or are just flat-out amusing – your visitors will be delighted that you’ve gone the extra mile to give them the kind of content that they prefer rather than forcing them to wade through page after page of written text, and you’ll be head and shoulders above your competition. But there’s one important caveat to video content: never, ever, ever set your videos to auto-play on your site. Uncued audio, video, animations and pop-ups are completely taboo in modern website design, and if you use them, you’ll provide an unpleasant surprise that sends visitors scrambling for the back button to get away from this sensory onslaught. Don’t insult the intelligence of your visitors by forcing content upon them. It’s the online equivalent of having a pushy salesman pounce on them the minute they walk in the door and hound them into looking at products or services that may not be relevant to their interests at all. Instead, provide contextual clues on the page that indicate what your video is about, and allow your visitors to decide for themselves whether or not they wish to view it. This removes the element of unwelcome surprise without eliminating the value of the video content itself.

Surprise! We’ve made changes to our website!

Inevitably, there will come a time when it’s necessary to make changes to your website. These changes could be as minor as adding new types of products or services or as significant as a complete redesign. The problem comes when regular visitors return to your site expecting one thing (the site that they have become familiar and comfortable with) but receive something else instead (the new site). Of course, it goes without saying that any changes you make to your site should be driven by the objective of creating a better experience for your users. Make sure you carry this objective through to the launch of your new site or its new features by smoothing the transition for your regular visitors. After all, every website comes with an inherent learning curve. If you’ve done your job right, that learning curve should not be very steep; yet, it will still exist as visitors determine where they need to go and what they need to do to accomplish their goals. Therefore, when you make a change, you can ensure that it’s well received by visitors simply by alerting them to these changes and guiding them through the process of navigating them. One example of how to execute a re-launch right is Citizens Bank. Weeks before the release of their new site, they posted a message on their existing home page announcing that changes were ahead and signaling the date when the newly overhauled site would launch. They also offered a preview of the new site complete with an overview of new features and instructions for where to find commonly used tools. Did every customer see this message and take the tour? Of course not, but many did, and as a result, they were not taken aback by a jarring surprise on the day of the new site’s launch. Instead, they were already acclimated to the new features and functions, thereby maintaining a sense of certainty and control throughout the transition process. By demonstrating to their customers that their needs and desires were an important consideration in the bank’s plans for their new site, Citizens Bank was able to create a positive experience out of their redesign and avoid the potentially hazardous pitfall of forcing their customers to stumble unassisted through the process of re-learning how to use their site.

In summary

Going above and beyond to provide customers with unexpected value can be a powerful way to separate yourself from the competition, but if done incorrectly, it can also backfire in a big way. In the case of Apple, the company had to release a tool to allow customers to remove the free U2 album that they had been gifted – something they clearly did not foresee as necessary when they conceived the promotion. When you are considering how to implement the element of surprise in your marketing and website design plans, remember never to lose sight of your customers and their needs. Always ask their permission, keep the power in their hands and allow them to remain in control of the process as much as possible so that your surprise will be welcomed with delight and satisfaction.

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Shaping Business for the Tribe

Previously, in our articles Tribes in Today’s Marketing and Mastering Tribe Marketing, we explored how the marketplace is represented by countless networks of people who are connected by a common interest or goal – known as tribes – and how successful business growth is rooted in attaining leadership in those tribes and putting the principles of trustcasting into practice. Now we shift our focus to an outside-in examination of how the influence of tribes extends beyond promotion to shape how today’s businesses operate and evolve.

The old way

For any organization large or small, achieving a thorough understanding of its target market has always been fundamental to growth and long-term success. However, the task of gaining this knowledge has historically been a difficult process. It required a significant and ongoing investment of time and resources in fact-finding through surveys, focus groups, opinion polls and demographic studies – all in the name of formulating a more detailed profile of the customer, their attributes, their needs and their preferences. But in the same way that old advertising has been rendered ineffectual in today’s consumer-centric marketplace, these types of market studies have likewise become obsolete. Such disconnected, impersonal methods of information gathering are often too skewed, too broad or based on too thin an audience segment, ultimately falling short in delivering the depth of insight needed to engage in meaningful, trust-based relationships with the customer. More importantly, these outmoded forms of market research are not taken seriously by the majority of participants and thus fail to elicit the honest, thoughtful responses needed to understand what they really want, what truly drives their decision making and what actually motivates them to action. However in today's tribe-driven marketplace, the answers are right there in front of you.

Know thy customer, the tribe way

Simply by being an active participant in the tribe, you will gain an intimate understanding of your customers.If there is one thing that tribe marketing affords today's business, it is the ability to identify, engage and lead the community of customers that exists around it. You must understand that your tribe represents your customer base. While every one of your customers may not be active in the tribe, its membership is a reliable sample of all customers – especially those that can be the most passionate evangelists for your business. Therefore, attaining membership and demonstrating leadership in your tribe gives you invaluable access to your customers. Simply by being an active participant in the tribe, you will gain an intimate understanding of your customers, their lifestyle, their wants, their dislikes and their needs. It’s a deceptively simple concept: earn your place in the tribe by being one with its goals and serving its interests, and you will achieve unparalleled insight into the marketplace where your customers exist because you yourself are a part of it. However, it is then that the real work begins.

Listen, learn and integrate

When you’re a member of your tribe, you will be exposed to brutal honesty. The tribe is not there for you; they are there for the tribe. They will discuss their issues candidly and openly. They will likely complain and may at times be crass. This is not the type of polite, shallow input you receive from a survey or a customer comment card that is filled out hastily under the watchful eye of the clerk at the front counter. These are real issues being voiced by real people with real needs. You must be prepared to have your feelings hurt and develop a thick skin. However difficult it may be, it is important to absorb these opinions in their most raw form. If you’ve made the investment in earning your place in the tribe, you can take this process one step further and engage its members in your business operation. Let the tribe know what you are doing. Ask for feedback. Ask for honesty. Ask what’s wrong and how you can do better. Whatever you do, don’t attempt this unless you are a bona fide member, or you’ll find yourself being ignored, being fed ineffectual information or even being ousted from the tribe for conducting market research as an outsider. Ultimately, the benefit of being in the presence of such brutal honesty is that it often brings to light problems or weaknesses within your organization as well as untapped possibilities for growth. These may come in the form of an employee that they dislike, a product feature that they hate, an inconvenience you should correct or a void in the marketplace that is ripe for a solution. You may even find bigger issues to address: Maybe your product isn’t what’s needed. Maybe it needs to evolve. Maybe you need to rethink everything. Whether big or small, the problems and obstacles that you uncover by listening and engaging are invaluable to long-term success when you use what you’ve learned to direct the evolution of your organization in order to continue growing with your tribe.

Letting go and following the tribe

As the one charged with growing your organization, you’re probably used to doing things your way. However, if you are going to serve the needs of your tribe, you must take a step back and re-examine every aspect from the perspective of its members. You must not only preach the mantra, “The customer is king,” but live it through and through. You must not only preach the mantra, “The customer is king,” but live it through and through. It’s important to understand that your tribe represents the loudest, most opinionated and most critical subsection of your customer base. The honest, unfiltered information to which you have access as a member of this inner circle allows you to make changes to your product or service that will satisfy your most demanding customers. If you can placate these early adopters, loyalists and core users, then you will be ahead of the curve in not only meeting but exceeding the needs of your greater customer base. Should you give them what they want, they will wave the flag for you, giving you invaluable PR and unbiased word-of-mouth marketing the likes of which no amount of money can buy. This is not to say that you should make sweeping changes to your products, services, operations or processes based on the fleeting whim of each and every vocal customer. Quite the opposite is true, in fact. This is about getting to know the whole of your tribe – identifying the desires, problems and goals that are common to the greatest number – and applying your own ideas and innovation toward reshaping your product or service offering to provide solutions that address these needs.

Setting your tribe on fire

People instinctively long to be a part of something meaningful. Another aspect of reshaping your business around your tribe is finding a way to inspire them. The members of your tribe have the greatest potential to become your most ardent evangelists, but only if you can connect with them on a deeper level. People instinctively long to be a part of something meaningful. They crave outlets that allow them to engage in their passions. They are ready to carry the torch for those who they see doing good. Let’s say you own the corner coffee shop. Who is your tribe, and what is it about your offering that inspires them? Perhaps your tribe is made up of people who are passionate about organic or fair trade coffee. Or maybe the atmosphere of your store represents the culture and sophistication of urban lifestyle, and that’s what excites them. It could be that your tribe feels strongly about patronizing locally-owned businesses, and you offer Charlotte’s best coffee, so they find meaning in supporting your shop with their dollars. It’s possible that inspiring your tribe will require you to tell a story that’s greater than your direct product or service offering. Perhaps the members of your tribe are highly attuned to social and political issues that affect their community. Let’s say you decide to raise $50,000 this year to support local charities that assist homeless families, and you pledge that 25 cents from every cup of coffee you sell will be applied toward that goal. People will be proud to be seen carrying your cup because of who you are and what you do. The logo on that cup then becomes the secret handshake for the members of your tribe. There’s no advertising campaign, no marketing gimmick and no customer rewards card that can rival a tribe that is inspired. If you attach greater meaning to what you do, you give your tribe a reason to shout your message from the rooftops and proudly embrace your identity as part of their own. In this way, you’ll become more than a brand, you’ll become a revolution.

Tribes crave ideas

If you find that what you’re doing doesn’t light a tribe on fire, it’s time to invest in the white space of creating ideas. Today’s business is idea-based. Great ideas require a willingness to take a risk, to challenge the status quo and to do something revolutionary. This runs counter to traditional business thinking, which tends toward minimizing risk whenever possible. However, a tribe-driven marketplace has no tolerance for those who play it safe. Apple has sold two million iPads within the first 60 days of launch in the midst of an economic downturn because they hit on an idea for a new category of mobile device that set their tribe on fire. Great ideas require a willingness to take a risk, to challenge the status quo and to do something revolutionary. Amélie’s in Charlotte has achieved monumental growth because they took a concept usually found in much larger metropolitan locations – a 24-hour authentic French bakery and cafe – and brought it to a tribe of urban foodies that were primed for something new and different. Bucking conventional restaurant industry wisdom about the necessity of turning tables quickly, they instead welcome the members of their tribe to stay and linger, transforming their offering from a commodity to a culture and winning a following of loyal and vocal evangelists as a result. Tribes are ready and waiting for the next big thing that is going to solve a problem, meet a need or make their lives better. If you’re the one that delivers that idea, they’ll rally around you, spread your message like wildfire and fan the flames of your success.

There’s no shame in being small

The downfall of many small businesses when it comes to advertising and business growth is trying to act like a large business in order to increase their perceived legitimacy and trustworthiness in the eyes of the customer. However, in today’s tribe-driven marketplace, small businesses actually have a clear and distinct advantage. In fact, more and more, it is the large business that is trying to emulate and keep pace with the local mom-and-pop operation. Trust is earned when real people connect with real people. It is very hard for a large corporation to be real to anybody. In fact, when it happens, it’s because they have found a way to provide the level of personal service and engagement with the tribe that would typically be expected of a small business. In today’s tribe-driven marketplace, small businesses actually have a clear and distinct advantage. AT&T tried this with “Seth the Blogger Guy.” Recognizing that they couldn’t just run ads saying that they were working on the problem, they crafted a fake persona to represent AT&T to its tribe. They thought presenting customers with an unassuming-looking character on a first-name basis with the audience would be sufficient to cultivate trust-based relationships. This is false tribe leadership, and tribes are not so easily fooled. Conversely, Frank Eliason of telecommunications giant Comcast has established a customer service program that offers the kind of highly personalized touch that would ordinarily be more characteristic of the neighborhood florist. He has built a reputation for approaching problems with a genuine passion for resolving problems and following through on what is promised to achieve a positive outcome. As a result, over time people have given Frank and his team their trust, and they trust Comcast more as a result. Another great example is Mellow Mushroom – a very successful pizza restaurant chain with sales in the millions. However, their success is due in no small part to the fact that when you enter a Mellow Mushroom, nothing – from the menu to the decor to the staff – resembles a chain. They have identified their tribe, and they are catering to it. If Mellow Mushroom suddenly decided that they needed to look more sophisticated, more polished and more corporate, their tribe would quickly abandon them and follow the next place to come along and offer the casual, unrefined ambiance of a college dive bar. In this way, there is great possibility for small businesses. Your tribe inherently expects you to be real and to be personal, and as a result, they are predisposed to trust you. Don’t fall into the trap of trying to force your organization to be something it’s not. Remain focused on listening to your tribe and molding your operations around what you see and hear as an active member of your core customer base.

All for the tribe

The facts are simple: if you want to grow and thrive in today’s marketplace, your organization, your business operations and your products or services must be shaped by and around the tribe. If what you have to offer doesn’t fit your tribe, you have an obligation to listen to them, identify their needs and grow your business in that direction. If a competitor does it before you, you’ll be facing a mountain that’s immeasurably harder to climb.

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