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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Mythbusters: Website Edition

As a web designer, I routinely speak with business owners and marketing managers who are in the midst of a website redesign project for their company. During these conversations, I am always amazed by the myths about user experience and interface design that they mistakenly cling to. Many of these misconceptions are the by-product of previous website projects – leftover relics from an Internet of old. Others are more baffling, as their tenets are not now and never were true. So in the interest of championing the best practices and principles of modern website design, we’re channeling our inner myth busters and blowing the lid off five of these most persistent myths (dramatic explosions not included):

Myth #1: Visitors need/want instructions on how to use your site.

The Internet is no longer a new and unfamiliar medium, yet many companies still populate their websites with content that seems targeted to someone who has never actually navigated the Web before. When you include instructions for visitors about how to use to your website, you are adding a lot of extra words, which in most cases only serve to weigh down your pages with unnecessary visual clutter. In fact, the goal of any good design is to create an interface that is so intuitive that no instruction or explanation is necessary to help visitors move from one page to the next and complete routine processes such as making a purchase or signing up for an account. As a result, if you feel instructions are necessary, that inclination is a major red flag for serious design flaws that must be addressed in order to provide a quality experience for your user. To be fair, there are certainly instances where some level of guidance is needed. Complex interactions or applications that are truly unlike anything that has come before on the Web will require some level of training for your users, but the vast majority of websites do not fall into this category. If your site is, well, just a website (and there’s nothing wrong with that!), forego the instructions and have faith that your users are savvy enough to know and understand the well-established conventions of using the Internet.

Myth #2: These days, everyone has a high bandwidth connection.

Over the last few years, the average size of a webpage has doubled, largely due to our profuse use of images. Current design trends that call for giant, page-spanning photographs combined with the drive to deliver high-resolution images for retina displays mean that the file size of the images we are using continues to climb. Many people argue that this is acceptable because, as the size of our webpages grow, so does the bandwidth speed of our Internet connections. But is this really the case? It is true that the number of people with access to high bandwidth connections continues to increase, but the belief that all visitors have the benefit of a lightning-fast connection is nothing more than wishful thinking. There are still many areas of the country and the world that are shackled to the type of slower connections that are only a distant memory for many of us. Also, keep in mind as well that mobile visitors may be operating on a network that is either unreliable or has data download limits. In both of these instances, a website that is bloated with large content (i.e., giant videos, unoptimized images, etc.) will pose a problem. Ensuring that your website is optimized for performance is as important today as it has ever been, regardless of how fast connection speeds may be. After all, no one has ever said, “Wow, this website loaded TOO quickly for me!” Better performance and faster downloads improve the quality of experience for all users.

Myth #3: There may be some users visiting your site on a mobile device, but not that many.

Years ago – when the iPhone was still a novelty and everyone and their 12-year-old brother didn’t walk around with a smartphone in their pocket – this may have been the case. But today, visitors are accessing your website on a wide variety of devices with a range of different screen sizes. Examining the hundreds of websites that we manage reveals that an average of 30 percent of all traffic to those sites comes from mobile devices of one kind or another, and for some, it’s as high as 50 percent or more. This is consistent with the forecasts of industry analysts, who predict that by 2015 – that’s next year, folks! – the majority of all Web traffic will come from mobile devices. Additionally, not only are visitors accessing your site on mobile devices, but the same visitor is likely using multiple devices to access your content. We call this the “muti-device user”. As we covered previously in our article “Website Design for a Multi-Device World”: The multi-device world is populated by multi-device users. While a staggering variety of devices are, indeed, being used to access web content today, it’s also important to remember that the same user is often using multiple different devices to access your website – and they expect that site to work well regardless of which device they happen to be using at the time. Gone are the days of “mobile users” coming to your site only to locate your phone number or directions to your office. Today’s mobile users – and multi-device users – expect convenient, on-demand access to the same content that they can find on the desktop version of the site. Clinging to an outdated belief that “no one has a reason to visit my website on a mobile device” will quickly translate to “no one has a reason at all to visit my website at all.” Read more: Website Design for a Multi-Device World

Myth #4: You should open off-site links in a new tab/window.

This is the most common myth that I hear from clients, who insist that all links that lead to another site must open in a new tab or window. This request stems from a belief that if a visitor leaves your website to look at content somewhere else on the Web, they will never find their way back. By opening that link into a new tab, your website remains open in the user’s browser for them to return to at any time. Or at least, that’s how it works in theory. Unfortunately, I have seen this practice backfire on a number of occasions. Why would this be the case? Think of the Web as a linear experience. You move from one page to another and another. You can travel seamlessly to and from any point along  this timeline by using the browser’s back and forward buttons. But when you open a link in a new tab, you start a new timeline for the user. Having observed many website users over the years, I can tell you that the back button is a feature that they are intimately familiar with. If that user clicks a link and visits a new page, and they then want to return to your site, they will intuitively click the back button until they get there. However, if you’ve opened the off-site link in a new tab or window, then the back button eventually leads to a dead-end for that visitor. Your site, which they want to return to, is not part of their current timeline because it is open in a completely separate tab. Of course, all the user needs to do is close the current tab, and your site will be in front of them again, but I’ve seen many visitors who are unaware of or confused by this. Instead, when the linear experience of the back button doesn’t bring them to your site as they expected, they instead type your website’s URL into the browser’s address bar, thinking that something went wrong along the way. They now have two instances of your website open, so in your efforts to “help” them easily get back to your site, you’ve actually confused the user experience. Does this mean you should never open links in a new tab or window? No, it doesn’t. For example, it’s a good practice to open PDF files in a new tab because these documents feel like they are separate from the linear experience of browsing a site. Additionally, opening links in new tabs is not “wrong,” per se. It is an acceptable solution, but if you choose to use that approach, do so for a reason other than the mistaken belief that if visitors leave your site, they will never find their way back. The linear experience of web browsing – and using the back button to return to a webpage – is a well-understood convention, so don’t be afraid to let your visitors explore in the manner that is most natural to them.

Myth #5: Visitors absolutely will/absolutely will not complete a form.

The final myth we will debunk concerns web forms. Interestingly, I hear competing opinions from clients regarding forms on their websites. Some believe that visitors will not fill out a form no matter what. Others think that their users will gladly complete a lengthy questionnaire for almost no reason at all. As usual, the truth lies somewhere in the middle of these two extremes. Gathering information from website visitors is a valuable exercise. It allows you to understand who is coming to your site so you can follow up with them, engage with them and hopefully convert them into paying customers for your business. Just asking for visitor’s information is not enough, however. Very few people will be willing to complete a form unless they have a clear understanding of what they will receive in return – and what they receive needs to be of greater value to them than receiving more marketing from you. This value can come any number of different ways, such as receiving a free whitepaper or application download or registering for an event or webinar. In each of these cases, there is a legitimate reason for your site visitors to complete a form that gives you their personal information. If, however, your form simply says, “Sign up for updates!” without any further information about what those updates entail, how frequent they will be delivered or what potential value they hold, then there is a slim chance anyone will be inclined to complete that form. Creating a valuable offer is step one. Step two is the design of the form itself. Asking for too much information will be a roadblock for many visitors, who will either perceive a form with a large number of fields as being too cumbersome or too intrusive to complete, so the best course of action is to ask for only the information you need. If you never intend to call someone, then don’t ask for their phone number because that’s one less obstacle you’ll have to overcome. The more concise and easy your form is to complete, the more likely your visitors will do so. Website visitors will fill in forms, as long as you make those forms easy to complete and provide value to them in exchange for sharing their information with you.

R.I.P. myths and misconceptions

The Web and the behavior of its users are constantly evolving. Since the last time you engaged in a website redesign project, there have undoubtedly been a number of shifts in trends and tendencies, and what you learned through that experience even just two or three years ago may not be applicable today. Because of this ever-changing landscape, the importance of working with web development firm that keeps pace with these changes and the best practices of modern website design cannot be understated. Such a partnership will ensure that the decisions driving the the design of your site are relevant to today’s Web and are not relics of a time gone by.

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Dos and Don'ts for a Successful Groupon Promotion

Do: Be aware that it’s not for everyone, and it may not be right for you.

With a subscriber base that has surpassed 85 million and shows no signs of slowing, the allure of Groupon is hard to resist. The basic premise seems fail-proof: create a discount offer that’s broadcast to thousands of potential new customers, sit back and watch the dollars roll in.

However, every business model is unique, and there are many variables that determine how well your company can respond to a sudden, short-term influx of traffic or a temporary drop in profit margin.

Running a promotion is particularly risky for companies in Groupon’s bread-and-butter categories like salons, spas and restaurants, where the frequency of offers dilutes their perceived value.

If your business falls into one of these categories, you must carefully weigh the chances of being able to convert first-timers into regular customers versus the likelihood that they’ll simply wait for the next Groupon to come along. If the odds don’t stack up in your favor, you may find that the sacrifices you must make to execute the promotion won’t ultimately deliver a long-term pay-off in the strength and size of your customer pool.

Don’t: Expect Groupon to boost your bottom line.

At least not right away. While there’s no upfront cost to run a promotion, Groupon requires you to discount your products or services by at least 50 percent, and they then typically take a cut of 50 percent of the final selling price, leaving you with only 25 percent of your normal revenue. While you’ll undoubtedly see a major bump in traffic, your margins on that traffic will be slim, if they exist at all.

Playing the Groupon game is less about building profit and more about gaining mass exposure.

Do: Crunch the numbers.

When deciding whether or not Groupon a good fit, you must weigh the ROI of your promotion according to the same metrics as you would any other marketing tactic.

Examine every scenario to determine what your promotion will ultimately cost. What if 100 people jump on your deal? What if it’s more like 1,000 or 10,000? Can the potential benefits justify that level of investment? Or would your money be better spent elsewhere, such as a pay-per-click advertising campaign?

Do: Be strategic in your offer.

If you do decide that Groupon is a good fit for your business, make sure to structure your promotion so that it’s a win for you and your new customers.

Be creative and find a way to build an offer that minimizes the losses you must absorb and maximizes your ability to fulfill a short-term spike in demand. Focus on the products or services where your overhead is lowest and your profit margin is highest.

For example, let’s say you’re a personal trainer. If you offer a Groupon discount on your consultation services, you’re limiting the number of hours you have available to clients who are willing to pay your regular rate. However, let’s say you’re a personal trainer who also sells subscriptions to an online video coaching series. You can absorb an almost unlimited amount of cut-rate subscriptions without compromising your primary revenue stream.

Or, let’s say you run a beachside bed and breakfast. Executing your promotion in the off-season is a great way to reel in new visitors. If your doors are open, your operating expenses are fixed. In terms of defraying those costs, it’s better to be filled to capacity at 25 percent of your standard rate than to have only one or two guests at full price.

Don’t: Be afraid to negotiate.

A lesser-known secret of playing the Groupon game is that you can negotiate. When it comes to shaping your promotion, nothing is written in stone.

You can score a more favorable split on the take than 50/50. You can also cap how many discounts are available, which is a good way to safeguard your bottom line and make sure you don’t end up with more business than you can reasonably handle.

Groupon’s entire business model revolves around presenting great deals that people want to buy, so if you’ve got a good one, make them play ball. If they won’t agree to terms that work for you, either try another daily deals site, or pursue a different marketing strategy entirely. No amount of exposure is worth an arrangement that could potentially sink your business.

Do: Pay attention to the fine print.

Terms and restrictions can make or break your deal. Use the fine print to make sure your offer is one that your business can sustain.

Set an expiration date. Cite whether the offer includes tax and gratuity. Specify whether customers need to make an appointment or reservation in advance to use their Groupon. Determine which products or locations the Groupon applies to. Define whether the Groupon can be used in conjunction with other offers or specials. Limit how many offers can be used per customer and per visit.

Just be careful not to make the terms so restrictive that the promotion loses all value to your potential customers, or your Groupon will be a flop.

Do: Put your best foot forward.

When your Groupon lands in the inboxes of subscribers in your area, you’ll inevitably have an influx of potential new customers checking out your website, your Facebook page and your Twitter feed to find out more about you.

Make sure that your website is up to date and that it showcases the products or services being featured in your promotion in such a way that makes the decision to buy an easy one.

Make sure as well that your Facebook and Twitter streams are primed with interesting content and lively dialogue to boost your chances of scoring a like or a follow from these new visitors.

If you don’t have these critical elements in place before your Groupon hits, you won’t be making the most of the opportunity you have to be in front of hundreds or thousands of people who are in the market for what you have to offer.

Do: Understand that these are Groupon’s customers, not yours.

Due to privacy laws, Groupon cannot share the email addresses or personal information of those who have bought into your deal. So while you’ve gotten great exposure to these potential new customers, you have no built-in way to make a repeat appearance in their inbox.

Make sure that when these shoppers visit your website or come into your store, they have the opportunity (and incentive) to join your mailing list. If you don’t already have a list, now is the time to start building one.

Do: Bring your A-game.

The true value of a Groupon promotion isn’t getting a tidal wave of people through your doors. It’s the opportunity to convert those one-time deal-seekers into loyal customers and fans.

In order to do that, you must wow them. They may come in looking for a bargain, but if what they find is exceptional quality, value and customer service that go above and beyond their expectations, they’ll not only be more likely to come back and pay full price but also to spread the word about you as well.

Do: Make sure everyone’s on the same page.

One sure-fire way to guarantee that your Groupon customer will never come back is to make the process of redeeming their offer a hassle.

Hold special meetings or training sessions if necessary to make sure that everyone who’s on the front lines of your business understands the terms of the offer and how to handle any questions or complaints.

This is also a good opportunity to review your customer service standards and reinforce your expectations to ensure that everyone is prepared to do whatever’s necessary to convert, convert, convert.

Don’t: Alienate your loyal customers.

You know the old saying about new friends and old friends – one is silver and the other is gold. The same applies to customers.

In your efforts to bring new customers in the door, be mindful not to alienate those who’ve been happily paying full price all along.

If you’re going to Groupon, it’s an opportune time to simultaneously execute a customer appreciation promotion to reward these customers for their loyalty and show them that their business is always valued.

Don’t: Mistake Groupon for a marketing plan.

Let’s say you run your first Groupon promotion.Groupon is no substitute for a sustainable, long-term business growth plan. You get a huge response, so you stock up and staff up to meet the demand. The wave comes; the wave goes. Suddenly you’ve got a bunch of employees standing around staring at each other and more inventory than you know what to do with.

While running another promotion seems like the obvious solution to this problem, it’s no substitute for a sustainable, long-term, diversified growth and marketing plan.

You must realize that creating one Groupon offer after another will train old and new customers alike to expect never to pay full price and will ultimately devalue your products and services. You’ll end up caught in a cycle of dependency on discount shoppers and razor-thin margins that will make it next to impossible to ever actually grow your business. And isn’t that the point of running a Groupon to begin with?

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