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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The Next Evolution of Social Media Integration

A few years ago, when brands first began wading in to test the waters of the social media pool, the concept of social media integration was very straightforward and simplistic: add icons linked to your company’s social media profile pages on your website, and consider the job done. The message to visitors was, “Like what you see here? Please come join the conversation happening on our company’s social outposts!” And as brands continued to jump on each new social bandwagon that came along – YouTube, Pinterest, Instagram, etc. – the once-standard three buttons became four, then four became five and so on. Shortly thereafter, brands discovered the benefit of serving content across multiple sites in the name of message continuity. The advent of social media management tools like Hootsuite and Tweetdeck set this activity on fire, as marketers began exploiting newly available scheduling tools to republish content to all their profiles with the click of a single button, with no regard for tailoring their message to the culture and syntax of each platform and audience. And this run-of-the-mill, low-quality content made its way back to these companies’ websites as embedded Twitter and Facebook feeds – all in the name of integration. And customers noticed. Actually, everyone noticed. Because this robotic, efficiency-driven method of social media integration began to strip these platforms of their primal social element — the very reason why sites like Facebook, Twitter and Instagram are so popular in the first place. So with a little push from Google, Bill Gates’ postulation, “Content is King,” became every marketer’s buzz phrase. Companies began pouring big dollars into developing relevant, original content in every arena, from sharable blog posts and traffic-driving SEO landing pages to viral videos — each fighting for a just few fleeting seconds of consumers’ precious attention. As companies started to find their footing, they realized success in social media demands integration through and through – not at the superficial level of icons and links but at the very core of a company’s business growth efforts. Rather than treating each marketing medium (e.g., television, radio, email, pay-per-click, social, etc.) as existing within its own self-contained silo, social should be seamlessly interwoven throughout the brand’s marketing initiatives in ways that are a natural fit with how real customers think, behave and make decisions. When done well, social media integration steps inside and outside the four walls of the Internet fluidly, supports customer engagement while maintaining the social integrity of the platform and, inevitably, drives sales. Here are a few excellent examples of companies who are doing it right by today’s standards:

Well that’s Pin-teresting

Recently, Banana Republic sent out an email blast that combined the best of social media, direct marketing and e-commerce into one cleverly crafted campaign. Subscribers to the company’s mailing list received an email message featuring images of customers’ most-pinned styles. Within this email was a link that took recipients to a dedicated landing page on the brand’s own website where they could shop these looks, creating a direct, distraction-free path between email, website browsing and checkout, greasing the gears for a quick and easy purchase decision. Smartly, Banana Republic executed these promotional efforts in the other direction, too. Their Pinterest profile includes a board of most-pinned styles, each of which of course links directly to the item featured in the pinned image for interested buyers to purchase from the website. This creative campaign not only integrates the company’s social media, email and e-commerce efforts, it also capitalizes on a key psychological motivation for the fashion-minded by giving them insight into what’s on their fellow shoppers’ wish lists so that they, too, can be seen sporting the season’s most-wanted looks.

Tweet to eat

If you’ve got a fanbase that’s actively engaged in talking about your brand on social media, it begs the question: how can you take advantage of their promotional activities to reach a broader audience? The answer: integrate your social media campaigns into your traditional marketing efforts. Case in point: Panera’s highly successful #PaneraFaves campaign. Over the past several months, Panera Bread has been encouraging customers to share photos of their favorite menu items on Facebook, Twitter and Instagram – providing added incentive by giving those who participate a chance to win Panera gift cards. While this initiative provides great value on its own by prompting fans to promote the brand to their own friends and followers, Panera has taken this campaign to the next level, running national TV spots that feature these #PaneraFaves tweets and pics. The strengths of this TV campaign are multifold, as they position Panera not only as a brand that pays attention to its customers and their opinions but one that is well loved by those customers, too.

Add it now, buy it later

In May 2014, Amazon launched a feature that lets Twitter users add items directly to their Amazon cart simply by typing a hashtag. First, the user must connect their Twitter account to Amazon. Then, anytime they see an Amazon product link on Twitter, replying to that tweet with the hashtag #AmazonCart — or #AmazonBasket in the UK — adds the product to that user’s shopping cart, where it will be ready and waiting for them to purchase at their convenience. This stroke of marketing genius essentially turns Twitter into a retail pipeline for Amazon, extending the reach of the e-commerce giant beyond its own website to the social hubs where its customers live and talk about products day in and day out. In doing so, Amazon is also wisely fending off the rising threat of social networks transforming into social commerce outlets in their own right. While there is still a learning curve for customers and a few technical kinks to work through, Amazon’s “add it now, buy it later” concept clearly has tremendous potential to shape the future of social commerce.

As seen on TV

Also in May 2014, TaylorMade partnered with Chirpify, a marketing conversion platform, to host a live sweepstakes for their SLDR S golf club during the CBS broadcast of the PGA Byron Nelson Championship. Using their #actiontag (#DistanceforAll), anyone could enter for a chance to win the SLDR S or a trip to the US Open. According to Chirpify, “55 percent of people who saw the message on TV and responded to the sweepstakes on social completed the registration.” This 55 percent conversion rate is nothing to scoff at. It means social is no longer limited to merely reflecting engagement. Instead, it can be used as a clear and defined component of the sales funnel — exactly the kind of approach to and innovative use of second screen and social that defines the next stage of evolution in social media integration.

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