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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Taking Aim: How to Identify Your Target Audience

What's your mark?

Your business – and every business – has a singular driving goal: capturing more customers and, ultimately, owning your market. Today, owning your market doesn’t require you to spend more on marketing and promoting your business than your competitors. However, it does require you to have a more efficient marketing and promotion engine in place that yields maximum return for every dollar and every hour you invest. The process of building this engine doesn’t begin with tactics; rather, it begins with identifying your target. No business – yours included – can afford to market to everyone. Of course, it’s tempting to try to reach as broad an audience as possible in the hopes that no potential customer will slip through your fingers. However, in actuality, this approach will cost you much more money and deliver far less satisfactory results because you’ll have greatly diluted your chances of reaching those whose needs you truly serve. It’s important to understand that your target audience does not encompass anyone who might possibly ever buy your products or services. Rather, your target audience is comprised of those who are most likely to buy and, therefore, become the primary focus of your marketing efforts. Identifying the right niche provides the foundation for success in all aspects of marketing and promoting your business:

• It allows you to focus your efforts on those tactics and mediums that are most effective in reaching this particular group.
• It allows you to tailor your sales message to focus on the needs and concerns that are of greatest relevancy and urgency.
• Most importantly in today’s marketplace, it allows you to build a strong community around your brand comprised of people who love what you do and happily serve as your fans and evangelists.
• And in real dollars and cents, it’s the difference between sending thousands and hundreds of thousands of postcards to achieve the same end result.

Here are the steps you should take to ensure that you’re targeting the right audience:

Segment your customer base.

Who are your customers? Of course, there are many different ways to answer this question. Often it’s easiest to begin by examining your sales data and segmenting your customers into groups based on demographic factors, including age, gender, income level, education level, marital and family status, industry and geographic location. In working though this process, you’ll likely find that a particular group or groups emerge as those who buy from you most often. This simple step can also help you identify how best to market the same product or service to different groups. Some market segments may be better reached at trade shows while others can be reached at home with a direct mail campaign.

Dig deeper.

Breaking your customer base down into groups based on basic common characteristics like gender and income is only step one. To reach and engage with these groups effectively, you’ll need to develop a deeper understanding of both their lifestyle and their motivations. Start with one of your products or services and evaluate it through the eyes of the customers that exist within each group you’ve identified. Make a list that includes every possible reason this type of customer might want this particular product or service. Maybe they are trying to solve a problem, maybe they just want to feel good about themselves or to satisfy a basic need. Going through this process will help you drill down to the specific benefits and outcomes that should be the core focus of all your future communication with this group. Secondly, think about the routines of their day-to-day lives and how this communication will be best received. Do they frequently read the paper? Do they spend a lot of time in the car listening to the radio? When searching for news and entertainment, do they turn on the television or pick up their iPad? Are they likely to be active on social media platforms and, if so, which ones? This type of analysis is essential to ensuring that you choose the right vehicles and mediums to capture their attention.

Keep digging.

At this point, you’ve established a solid foundation of knowledge about your target audience. But if you dig a little deeper, you might uncover additional information that will allow you to sharpen your approach even more. Now that you’ve segmented your market and gained an understanding of what drives your customers, see if you can identify which group or groups offer the most marketing bang for your buck. For example, of all those who are most likely to buy your products or services, which groups represent the most profitable? In the B2B world, these are usually the clients with the greatest longevity or those who utilize services with the greatest profit margin. Also, who are the customers or clients that send you the most referrals? These are your very best customers because they do the work of selling for you, so make sure you are not only reaching your existing customers who fall into this category but also others like them because they represent a group whose needs you are particularly good at serving. Finally, it would be a mistake not to examine who your competitors are targeting. This is not so that you can just copy their strategy and run with it. To the contrary, what you’re really looking for is any gaps in the market that they might be overlooking so you can swoop in and grab these underserved segments.

Put your target to the test.

Now that you’ve identified your audience, it’s time for the rubber of your marketing plan to hit the road of execution, right? Not so fast. You need to put your construct of your target audience to the test to ensure that it’s one that can sustain and grow your business. This process is often called a SWOTT (strengths, weaknesses, opportunity, threats and trends) analysis. Ask yourself the following questions:

• Are there enough people within the audience you’ve identified to support your business?
• Can they afford your product?
• Will they see a legitimate need for it?
• Where do your prices fall in regard to their expectations? Too low? Too high?
• Are there opportunities to upsell other related products or services to this group?
• How much competition already exists in the marketplace for this group?
• Are there any trends you can identify of which you should be taking advantage?

While the process of identifying your target audience may seem complex, these steps hold the keys to competing effectively in today’s marketplace. When you clearly understand who buys from you and why, only then can you find the channels they frequent and become one with your tribe. And wouldn’t you rather own your target market than merely shoot arrows into the dark, hoping one will land?

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Bad Romance: 10 Phrases Never to Say to Your Customers

Your brand’s image isn’t defined by your logo. Your message isn’t controlled by your latest carefully crafted ad campaign. Your reputation isn’t wrapped up in your website.

In today’s age of social media, each and every one of your customers holds a megaphone, and he who holds the megaphone controls the message.

As a result, every single interaction your customers have with your brand shapes not only the way they perceive your company and its values but how they share and spread that perception to others in their circles.

So in this world where every word-of-mouth message has the potential to be amplified hundreds or even thousands of times over, what can you do to protect your brand’s good name?

Of course, when times are good and everyone’s happy, it’s not too hard to provide a positive experience. But what about when things go wrong? What do you do when you’ve got a disappointed, frustrated, irate or even irrational customer on your hands? That’s when your problem-solving savvy is really put to the test.

In situations like these, it’s critical to ensure that every employee at every level of your company is thoroughly trained in tactics for transforming a conflict or complaint into a positive experience.

Here are 10 phrases you must absolutely, positively never ever say to a customer when your brand’s reputation is on the line:

That's our policy...

You care about your policies, but you know who doesn’t? Your customers. All they care about is getting their problem fixed.

Using policy as the justification for why you can't achieve this goal will fall flat every time. Of course you can’t let your customer walk all over you and it is sometimes necessary to draw a line, but you have little to risk by finding ways to work within those policies to offer an innovative solution.

There's nothing I can do...

This statement will make any customer’s blood boil. When you say “There’s nothing I can do,” what they hear is “You and your business don’t matter to us.” You might as well throw in the towel and walk away.

There's always something that can be done, even if it requires a little creativity and compromise. Make sure to give your employees leeway to improvise when necessary. A minor concession costs nothing compared to the impact of an angry customer blasting you on Twitter.

What you need to do is...

When customers call, they’re looking to you to fix their problem, not to be told how to fix it themselves.

Of course, there are some situations where it’s appropriate and even necessary to walk a customer through the steps required to solve a problem. Just be sure to choose your words carefully. The difference between saying “What you need to do” and “Let’s try this” is conveying the sense that you’re on their side and that you’re committed to working together hand-in-hand until their issue has been resolved.

I'm new at this...

Again, nobody cares. You might as well tell a customer that they should hang up, call back and hope to have better luck in reaching someone more competent.

Rather than exposing your weakness, simply bring in someone with more expertise and experience to help navigate this sticky situation. Your customer will appreciate the hands-on team approach, and you’ll benefit from learning from a pro.

No...

Ouch! Never, ever drop the "no" bomb. If you don’t make a concerted effort to solve the problem at hand, you can kiss that customer – and every other existing or prospective customer who will listen to their tale of woe – goodbye.

I don't believe...

I'm not sure...

We don't...

Take your pick, but these are all thinly veiled ways of saying “no,” which we’ve already established is the not the right answer. Save your breath and spend your time and energy looking for ways to be helpful and find viable alternatives.

There’s no one else here you can talk to...

Unless you are literally a one-man operation, customers know you're lying when they hear this statement. There's always someone higher up that can step in.

Telling someone there's nobody else they can talk to is tantamount to saying, "You’re not worth our time." This isn’t going to diffuse their anger and will likely send them packing, irate enough to leave horrible reviews all over the Web.

I don't know how to help you with that...

This phrase is problematic even when the best of intentions are meant by the employee offering support.

Sometimes a customer will ask tough questions. Instead of saying you don't know what to do, take a proactive role in connecting them with the correct resource within the company who can handle their problem.

That's not my job...

Wrong. No matter who you are or what your job title is, keeping your customers happy is your number one responsibility. Just do it.

I hate my job...

This company sucks...

These types of statements tend to surface when both the customer and the employee are in a state of emotional upset. It’s the equivalent of telling a customer that they're not going to find any help here.

Bad-mouthing the company is never the right answer, no matter what the situation. It can do immeasurable damage, and in reality, even the angriest customer doesn’t really want commiseration.

They don't care about your opinion. They’ve taken the time to give you a chance to make it right, and they want a solution.

If you find yourself reaching a breaking point where you feel the need to make statements like this, take a step back and clear your head. You may not feel that you’re getting the support you need from your company, but customers don't need to hear this. If necessary, ask if you can put them on hold momentarily while you "search for the solution." Then take some deep breaths, get help and do whatever you need to do to rejoin the conversation with a positive attitude.

{Nothing...}

Silence is the absolute worst thing a customer can hear from you.

If it’s necessary to put a caller on hold, don't keep them waiting long. Even better, get their information and tell them you’ll call them back (and then make sure you do – promptly!).

If they’re asking tough questions or getting frustrated, responding with silence will only add fuel to their fire. But that doesn’t mean you must have the right answer on the tip of your tongue, either.

Starting with genuine empathy is a great way to diffuse the situation. Even a simple, "Yes, sir, I can see why you are upset. Let me see what I can do to help you out," will buy you some time to organize your thoughts and collect your composure so that you can confidently work toward a mutually agreeable solution.

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