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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Rethink, Refocus, Reinvent, Rename: 4 Ways to Revitalize Your Brand

Your brand is your identity. Its value is built over time, step by step, brick by brick until it is recognizable, desired and even worn like a badge among your loyal customers. Once it’s established, it becomes the touchstone around which all of your marketing and business growth efforts stem.

But what happens when that momentum shifts and suddenly the value of your brand starts to wane. In a constantly changing marketplace, today’s top brand can become tomorrow’s relic. Your customers’ needs, habits or preferences start to shift. A new competitor emerges in the marketplace. New technology or new trends arise and undermine the relevance of your offering. A negative connotation attaches itself to your good name.

Is it time to just give up and pack it in? Not at all.

It is time, however, to retool your brand. Here are four ways you can approach the rebranding process and rekindle the flames of passion between your company and its customers.

1. Rethink.

Approach your product offering with new eyes, as if you have never seen it before. Forget your past success and look ahead to what it will take to capture a newer, broader buyers' market.

Ask yourself what will make your product relevant to today’s consumer. Does your product promote green living? Does it support a healthy, active lifestyle? Can it create greater efficiencies in an economy where everyone’s looking for new ways to stretch a dollar?

Fast food mega-monopoly McDonald’s is a prime example of how taking a fresh look at your company’s offerings can not only keep you relevant but help you thrive in an ever-shifting marketplace.

Established as a burger joint and maligned by the well-hyped documentary "Super-Size Me" as being synonymous with obesity and grease, McDonald’s took a step back and envisioned a restaurant where healthy offerings such as salads, fruit and yogurt could peacefully co-exist with good old-fashioned fast food fare.

This approach reaped immediate rewards, as customers who had left McDonald’s in droves in pursuit of healthier options discovered that it was finally safe to return to their old familiar favorite Golden Arches.

2. Refocus.

When it comes to rebranding, it’s vital to keep a keen eye on exactly who it is that you want to target.

It’s possible that your sales are flagging because in trying to increase your market share, you lost sight of who it is you serve best. In casting your net too wide, you may have alienated your most loyal customers.

Rebranding gives your company a chance to refocus and retool your efforts specifically to appeal to those who will realistically be most interested in and most likely to buy your products, rather than wasting time and money on a less effective, too-broad business plan.

When J.Crew saw its sales start to decline in 2003, the company hired former Gap CEO Millard Drexler to take action. Returning their focus to a narrower, more upscale clientele, the label began introducing more luxury items such as cashmere and tweed to their line alongside their traditional selection of tank tops and t-shirts. Add to that the endorsement of one very sophisticated First Lady – Michelle Obama – and the rebranding of J.Crew was complete.

3. Reinvent.

Would you believe that Burberry – yes, that Burberry – was once synonymous with gangwear in England? It was – so much so that one English pub even banned anyone wearing the label from entering its establishment.

What happened? In the 1970s and 1980s, the brand became associated with football thugs and hooligans. Imposter garments with the signature Burberry check print were sold to the masses, creating the impression that it was no longer an exclusive brand and undermining its desirability among affluent clientele.

Burberry struck back, relying heavily on a series of endorsements from young, A-list celebrities like Kate Moss, Agyness Deyn, Emma Watson and Rosie Huntington-Whitely to reposition the brand as fresh and appealing.

In addition to advertising heavily in glossies like GQ, Esquire, Vogue and Harper’s Bazaar, they also employ a viral marketing approach, placing ad banners on top fashion websites. Additionally, the brand appears at fashion weeks around the world without fail, hosting their own shows to present new lines, which keeps their name constantly in the fashion press. In doing so, Burberry has reinvented itself and reclaimed its historic stature as a high-end, aspirational brand.

4. Rename.

A complete change of name can be a risky strategy but one that can also be highly effective when implemented with perfect timing and execution.

A great example of how one company changed their fortunes by changing their name is the fast food chain originally known as Kentucky Fried Chicken.

Founded by Colonel Sanders in 1956, the company made the wide-sweeping decision in 1999 to shorten their name to simply "KFC." There are several prevailing theories as to why this change was ordered. Some say it was the desire to disassociate themselves from the word "fried" and all of its unhealthy connotations. Others claim the company wanted to remove the word "chicken" in reaction to pressure from government food regulators upset about treatment of livestock. Still others say the company removed the word "Kentucky" because the name was actually trademarked by the Commonwealth of Kentucky in 1990, slapping all who wanted to use the name with a hefty licensing fee. Whatever the real reason for the switch, KFC was reborn and sales skyrocketed.

Whatever the reasons, if your customers have lost their passion for your products and your sales numbers are feeling the squeeze, rebranding may prove to be just the shot in the arm you need to revitalize your revenues.

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Deconstructing the Viral Hashtag

Pick your platform — whether it’s print advertising, video, Instagram, Pinterest, Facebook or Twitter – hashtags have overtaken them all. Handy, catchy and often irreverent, hashtags are quickly becoming a mainstay of modern marketing. Like every aspect of marketing, though, some brands are more adept than others at creating hashtags that drive awareness and engage the public. As a marketing tool, hashtags can be a bit of an enigma. Many times the best ones are spontaneous and random. They have an incredibly short lifespan, and there’s no way to control them once they’re out there. So what exactly makes one hashtag succeed wildly while another one plummets into instant obscurity? Why are some hashtags so memorable and others imminently forgettable? The short answer: The most effective hashtags appeal to a wide range of people because they key into the human psyche in a powerful way. Let’s deconstruct a few of the most viral and memorable hashtag campaigns of the past few years and uncover the secrets of their success:

The appeal of social currency: #firstworldproblems

The nonprofit organization Water is Life (http://www.waterislife.com) was looking for a way to raise money to supply clean water to villages in developing countries. And they hit on an innovative way to do it, with a video and print campaign that capitalized on the popularity of the existing hashtag #firstworldproblems by juxtaposing the perceived problems of Americans against the all-too-real struggles experienced by those in less fortunate nations around the world. In the documentary-style video, complaints from actual #firstworldproblems tweets – including “I hate it when I go to the bathroom and forget my phone” and “My son got the wrong toy in his Happy Meal” – are read aloud by impoverished Haitian families. The stark contrast in conditions really struck a chord with viewers, who discovered newfound perspective on just how lucky they are to have such superficial issues. The campaign took off, with the video drawing a million views in just four days and response that generated enough donations to supply clean water to impoverished communities for a million days, according to Water is Life. The psychological appeal of this campaign and its signature hashtag is an interesting one. It leverages the natural human desire to accumulate social currency — to appear generous or to “look good” to our peers — to drive people to perform acts of generosity they might otherwise not consider. By poking a bit of gentle fun at the public while educating them to issues of real concern, Water is Life created a tidal wave of awareness and action.

The appeal of emotion: #SFBatKid

There’s no doubt about it: people share content that inspires strong emotions, and the BatKid story was one of the most emotionally appealing stories of 2013. The campaign, which was spearheaded by the Make-A-Wish Foundation, reached out to the city of San Francisco to help make a little boy’s dream come true. And five-year-old Miles Scott, who is currently in remission from life-threatening leukemia, got his dream — and then some. Powered by the Twitter handle #SFBatKid, the Make-A-Wish Foundation originally hoped to attract 200 volunteers in their effort to help Miles become Batman for a day. But the story and the hashtag caught fire, and the foundation was inundated by responses from as far away as Norway and Australia. About 10,000 San Franciscans turned out to watch as BatKid saved them from several dastardly villains. Even the mayor got into the act, giving Miles the key to the city as thousands of spectators watched from the steps of City Hall. It’s important to note that although this could have been framed as a sad story, it wasn’t. Sadness evokes a low-energy response that rarely results in action. Instead, the uplifting #SFBatKid campaign inspired a whole city to act by appealing to the most positive human emotion: hope.

The appeal of humor: #tweetfromtheseat

Who knew toilet paper could be so funny? In a cleverly designed campaign, Charmin managed to get people laughing in and out of the bathroom by transforming a taboo behavior into an ongoing conversation with their playful #tweetfromtheseat. With a little wink and some witty repartee, Charmin’s #tweetfromtheseat campaign incorporates current events and other brands into their Twitter feed — and the public loves it. As a result, they’ve turned a mundane household product into something special and built a huge, highly engaged following at the same time. It’s truly an inspired campaign, with an appeal that’s simple but nevertheless effective. After all, people do love potty humor.

The dual appeal of practical value and social proof: #40dollars

Talk about the power of a tweet: the Obama White House used the hashtag #40dollars to great effect to lobby for an extension on the payroll tax cut. The campaign began in February 2012 when the President tweeted “Taxes will go up for 160 million Americans by the end of this month if Congress doesn’t act. What does #40dollars a paycheck mean to you?” People all over the country responded — and a Congress infamous for not passing legislation was convinced to extend the tax cuts for the rest of the year. The #40dollars hashtag worked on two different levels: It inspired a response from Twitter users because it asked them to consider something of practical and personal value — what would an extra $40 mean to them? And it inspired action from Congress because humans are wired to respond to social proof. In other words, people embrace an idea or an action more easily when they see others agreeing with it.

#thebottomline

Even hashtags that seem to be completely spontaneous — and lucky at that — are often the result of some serious planning. (Check out Oreo’s #dunkinthedark Super Bowl tweet for a great example.) If your business is looking to leverage the power of hashtags to create a lasting impression, you can use these notable success stories as your model. Spend some time strategizing. Think about what type of appeal will work best for your brand, and make a deliberate effort to tap into it. Be thoughtful, be creative and be daring! If you can hit the right notes, you’ll not only be the brand of the moment but the one that people will be talking about for weeks, months and even years to come.

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