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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Fantastic Four: Blockbuster Secrets from the Marvel Marketing Machine

Recently, a trailer for the upcoming movie “Avengers: Age of Ultron” was leaked online. Marvel, acknowledging that the trailer was out there, decided to release their official version of the trailer a short time later. Twenty-four hours after the leak first hit the Web, the official trailer had already racked up 34.3 million views on YouTube! Marvel has what we all want – an audience eager to view, share, and discuss their content. The top two-US-grossing movies this year, namely Guardians of the Galaxy and Captain America: The Winter Soldier, are both from Marvel. In 2013, another Marvel movie, Iron Man 3, brought in $409 million while Thor: The Dark World rang up an additional $206 million for Marvel. The year before that was 2012’s Avengers, which was worth $623 million and the number one spot for that year. With that kind of success, it’s amazing to think that Marvel Entertainment Group actually filed for bankruptcy protection less than 20 years ago. How Marvel has gone from the brink of bankruptcy to one of the biggest names in entertainment, with blockbuster movies, televisions programs, video games, toys and, of course, comics, is a great story. There are a number of lessons we can learn from Marvel as we seek to add the same level of superpowers to our own marketing campaigns and websites!

1. Start with great content.

It all begins with content. Marvel focuses heavily in making sure that all their products are top notch. The value of this cannot be overstated. You can market all you want, but if your content (or whatever you are marketing) is mediocre, you will be facing an uphill climb. If your content is great, it will be much easier to find that eager audience. Marvel assembles a team to create their amazing entertainment properties, including actors and actresses, writers, filmmakers, illustrators, and more. While you may not need as large a team for your own efforts, you certainly should not attempt to do it alone. If you have in-house marketing resources, they will obviously play a role in this effort, but you should also look to the subject matter experts in your organization for what they can contribute. Finally, you will want to work with whatever web or marketing agency you partner with to get their expertise added to your campaign plans and help you develop amazing content.

2. Diversify your promotional efforts.

When Marvel is preparing to launch a new movie, they look to the range of channels they have available to them to promote that release. They run ads on their television shows, they release special edition comics meant to raise awareness and excitement for the characters and the film, they even time the release of toys for the film perfectly so that kids see the figures on store shelves and make sure their parents know that they want to see that movie. This multi-faceted approach to marketing is often called “multi-channel marketing.” For websites, multi-channel marketing means using all the appropriate resources at your disposal to connect with an audience and make them aware of, and drive them to, your site and your company. If you are using social media to promote your content, that is great, but you cannot stop there. Email marketing, search engine and other online advertising, and sponsored content are all ways you can reach an audience online. There are also offline options you should consider, from traditional print and mailing pieces, to articles in print publications, to appearances on news or radio. Not all of these may make sense for your campaign, but the point is that all of these, and more, should be considered. This is another thing you will work with your marketing agency on – identifying which channels make the most sense for your particular campaign. Whatever you decide on, however, you are almost certainly going to find that multiple channels will play a part in your eventual plans.

3. Tie it all together.

One of the things that Marvel has done expertly is to tie their properties together to create something that is bigger than just the sum of its parts. The Avengers movies are an obvious example of this since they combine characters from a number of Marvel’s solo-movie projects, including Iron Man, Captain America, and Thor. In addition to the Avengers films, which feature an all-start cast of their characters, Marvel has also made it a point to include ‘teasers’ at the end of their films. These tie-ins create excitement and get people talking not only about the movie they just saw, but also what is coming next. When you are considering your own content and campaigns, you should be thinking about how you can tie things together. This could be something as simple as cross-promoting similar products on an Ecommerce site or adding links to related articles at the end of a blog post. These are both ways that you can tie things together and increase overall exposure. If you are a services driven organization, another avenue you may consider is explaining how those various services you offer tie-in together and complement each other. If you’ve ever told an existing client about another service you offer, only to hear them say, “I didn’t know you did that!”, then you can see the value in cross-promoting your offerings by tying them all in together in some way.

4. Introduce new offerings and embrace new audiences.

As mentioned earlier, this year’s top-grossing movie in the US is Marvel’s Guardians of the Galaxy. This is notable because, before the movie’s release this summer, few people outside of diehard comicbook fans had ever heard of these characters! Heroes like Iron Man and Captain America were well known prior to their movie debuts, so there was already some name recognition that certainly helped fuel the success of those films, but Guardians of the Galaxy is about as obscure as it gets. Still, this movie has taken in over $738 million dollars in global ticket sales. The reason for this success is because the movie is great, but what is interesting is that, for people to discover how great the movie is, they had to give it a chance. People gave it chance because they trust Marvel. If you are consistent in the quality that you deliver, whether that is in the products you sell, services you offer, or content you publish, then you will build trust with your audience and customers. That trust is critical for when you want to introduce new offerings to help expand your business. Just like movie-goers trusted Marvel enough to give Guardians of the Galaxy a chance, if your customers trust you, they will be more inclined to give your new offerings a chance. If you are following the tips mentioned previously and tying things together, this trust can be doubly helpful as customers will be introduced to new offerings and the trust they have in you will encourage them to give them a shot.

In summary

We may not all be able to release a video and attract 18 million views in 24 hours the way that Marvel has done, but by following some of the same steps that Marvel uses to promote their releases, we can help our own campaigns take off.

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