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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iPad – The Good, the Bad and the Possibilities

Apple’s January 27 “latest creation” media event was historical for many reasons – not the least of which was the introduction of the first real tablet. Never before has such anticipation surrounded the launch of single product, and rightfully so. When was the last time you read a book on your laptop? How satisfying is it to surf the Web on your smartphone, even if it is an iPhone? There has long been a gap in the usability of these devices for casual media consumption – a gap that Apple has now bridged with the iPad. As Steve Jobs noted in his keynote address, when developing the iPad, Apple set out to create a new category of devices that would surpass both the laptop and the smartphone in handling key tasks like browsing the Web, sending e-mail, viewing and sharing photographs, watching videos, enjoying music, playing games and reading eBooks. With the iPad, Apple has indeed succeeded in carving out a new category in the mobile device marketplace – one that makes digital content accessible in a posture that has been comfortable and familiar to humans for centuries. As with any first-generation technology, the iPad offers many exciting and novel features, but it is not without its drawbacks. However, these details pale in comparison to what is most significant about the device. By offering a new platform, the iPad promises to revolutionize media as we know it today – from the way we consume it to the way it is created, packaged and marketed – bringing sweeping changes to our culture and a number of industries along the way. Here's Fame Foundry's take on all things iPad:

The Good

• Revolutionary, unhinged tablet computing device in book-holding posture
• Addresses all core functions desirable in a mobile computing device: Web browsing, e-mail, address book, calendar, notes, photos, music, video
• Capability to create and edit documents, spreadsheets and presentations with iWork apps
• Ready to run 140,000 existing apps out of the box
• iBooks available to purchase and read on-demand
• Potential to accelerate the growth of the emerging marketplace of “cloud” products, computing and storage
• Hardware is thin (.5 inches thick), lightweight (1.5 pounds) and elegantly designed
• Full-color screen with multi-touch interface
• Sheds the bulk of input devices
• Bezel allows for comfortable holding without accidental touches
• Excellent battery life
• 30-pin peripheral extension
• Wireless and 3G capable
• Built-in Bluetooth 2.1
• Accessible price point: $499 for 16GB model with no 3G support to $899 for 64GB model with 3G support

The Bad

• No system achieved to allow non-Apple apps to run simultaneously with other apps while balancing responsiveness and battery life
• Needs broader networking capabilities for access to nearby computers
• Presents some challenges in the device’s keyboard interface and standing upright when needed (which can be solved with compatible accessories)
• No camera or capability to video chat – an already established system available even on low-end MacBooks and the MacBook Air
• No GPS device

What Will Change

• This is the beginning of the end of paper. As a handheld device that does more than the Kindle – in full color and with a touch-driven interface, innovative software and well-balanced interface design – the iPad will force print publishers to choose one of two paths: create innovative content systems and monetize or file for bankruptcy.
• You will actually be able to watch video easily and comfortably in your hand and in settings never before feasible with a computer or pocket device. In fact, the experience will even rival a high-definition movie, as holding a 10-inch tablet 14-18 inches away is the same as watching a 96-inch television 10 feet away.
• Casual computing on low-end laptops will diminish. Netbooks will need to redefine themselves or be banished to the same dismal corner of the market as underperforming MP3 players in the portable music category.
• Portable TV and video players will begin to fade into obscurity, and physical media such as DVDs and Blu-ray discs will continue to go the way of VHS tapes and Betamax.
• The Kindle’s price will drop substantially, or the device will cease to exist all together. Maybe both.
• Apple will bridge the interoperability gap between its devices, improving networking and file sharing dramatically. Macs, iPhones, iPads and AppleTV to make a bona fide push toward conquering your desk, your pocket, your lap and your living room.
• The iPad OS will continue to evolve away from its iPhone-like genesis.
• The App Store will see a bona fide split between iPad and iPhone apps.
• iPad apps – and perhaps even the OS – will accommodate more handwriting and drawing functionality. Consider what Newton did 15 years ago with the benefit of today’s advancements in software development.
• Apple declared war on Flash a long time ago, and the iPad’s lack of support for the plug-in is the latest incarnation of this. Expect developers to continue to evolve away from Flash, undermining Adobe’s long-running stranglehold on the Web.
• Gaming will enter a completely new frontier previously untouched by the iPhone platform and traditional computers.
• In the next generation of the iPad, Apple will develop an acceptable multitasking subsystem that balances performance and function and will introduce other hardware features such as a front-facing camera that will finally make the long-awaited video phone a reality. The second generation will also likely come with an even lower price point, boosting demand and furthering the iPad’s infusion into our culture.

Suffice to say, the iPad will sell well and will become firmly ingrained in the day-to-day lives of the masses – as have the iPods and iPhones that came before it. It comes with an already established, robust and broad platform of apps that is unprecedented. It is produced and backed by a company that is renown for ongoing innovation and, as with all its previous devices, will undoubtedly be improving upon the platform. Like it or not, the iPad will become a part of our everyday lives and will change everything. Perhaps not in 2010, but soon after. Below Fame Foundry's agents weigh in with their reactions and predictions for the iPad and its potential as a catalyst for change:

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• The Architect

  The truth is, Apple’s iPad is a tablet – and only a tablet. While it possesses the capabilities of many existing devices, it is not a netbook, nor a personal computer, nor a pocket device. It is, however, what the tablet was supposed to be all along: an easy-to-use, book-sized platform for content and communication, with software and an interface that allow for possibilities never before realized. As such, the true significance of the iPad lies in the long-term impact it will have on our culture. Putting aside all initial criticisms in not living up to the dreams of every power user, early adopter and fanboy, the iPad is unquestionably a game-changer. Imagine everything that currently exists in print at book or tablet size being completely data-driven and interactive. Expect to see your UPS driver carrying it. Expect to see your medical charts on it. Expect an interactive Sports Illustrated to be published with capabilities that are unattainable with current Web standards. Just as assuredly as the iPod and iPhone took three generations to hit their full stride in the marketplace, so will the iPad in revolutionizing content, communication and computing. The iPad’s first phase is now in play.

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• The Craftsman

  Although not the end-all, be-all device I was hoping for, the iPad – along with various other tablet devices – is ushering in a new era of personal computing and media consumption. The possibilities of a device like this are endless. The way people are consuming and interacting with media is changing. Virtually all forms of media will be affected by the move toward a handheld digital format, especially the newspaper and publishing industries. What a device like the iPad does so well is consolidate and present content, replacing volumes of books, magazines, papers and other forms of media. Students can empty out their backpacks and have every required book downloaded to their iPad. I also think we will see a shift from an emphasis on developing for the Web to developing applications. Apps will be the primary way content is delivered in the future. Until now, apps were lacking the right device to truly take off as a mainstream platform, but I think that device has finally arrived. But iPad went beyond media consumption when they redesigned the entire interface for iWork. I was intrigued to see how applications like Pages, Keynote and Numbers will work on a multi-touch, gesture-based device. I think the future of interface design is very exciting.

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• The Author

  The iPad is, first and foremost, a media consumption platform. However, this device is not as revolutionary in and of itself as are the changes it makes possible in the types of media that will be available to be consumed. Hardware developers have long struggled to create an interface that is comfortable for reading or viewing for extended periods of time. Now that Apple has solved this problem, as the public embraces the iPad and it becomes as ubiquitous as iPods and iPhones, we will see the emergence of a new kind of audience with evolving expectations. As demonstrated at the January 27 event, iBooks and the New York Times app are a step in the right direction for handheld digital media. However, given time, artists, writers and developers have unlimited potential to work together in changing the media consumption experience as we know it. Currently, media is segmented by format, vehicle and purpose. Books, newspapers, magazines, radio, television and movies stand alone as distinct entities. However, the iPad presents new possibilities for blurring the lines between these various media types. eBooks can become increasingly interactive, enhanced by images, animation, video and sound to offer more than just digital versions of printed texts. If movies have soundtracks, who is to say books can’t as well? Writers, designers, illustrators, animators and composers will have unprecedented opportunities for creative collaboration. Currently news outlets produce separate content for broadcast or print and for the Web. Even though an online news story might include a video or audio clip to support written text, they are not seamlessly integrated. The iPad makes this possible in ways that will offer a richer, more informative experience. Furthermore, as the iPad and other tablets eventually become the default media consumption device of choice, there will no longer be a need for entertainment to conform to a rigid half- or hour-long format for TV or two-hour movies. Instead, writers and producers will have the freedom to find new and innovative ways to produce entertaining content that is both profitable and better suited to the consumption habits of the end user.

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• The Creator

  As a designer, there’s only one thing that excites me about the iPad, and it’s not the elegant design, the slick interface, the incredible battery life or the low price. What really excites me is the iPad’s single most valuable offering — its potential to revitalize the suffering publishing industry and revolutionize journalism. As I watched the native version of the New York Times demonstrated at Apple’s "newest creation" event, a progressive yet familiar medium was being revealed. Unlike the iPhone, the iPad mimics the size and portability of traditional printed material such as books and magazines. In the example of the New York Times, the design of the page is easy on the eyes and demonstrates how typography and page design can be preserved in digital media. What’s more is there’s good news for advertisers, too. The creative ads we are accustomed to seeing in printed publications can be incorporated into page layouts for the iPad app, eliminating ineffective and obnoxious banner and pop-up ads that plague browser-based versions. Like never before, the iPad makes it possible to combine the best of traditional publishing and journalism with the best of the Web. I don’t believe the iPad is destined to replace our workstations and laptops. Rather, it will become the standard vehicle by which we consume information. It is the new “paper.”

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How to Pick a Fruitful Marketing Strategy: Three Juicy Takeaways from Walmart’s “Picked by Farmers" Campaign

Recently, Walmart has launched a series of video spots they call “Picked by Farmers, Guaranteed by Us,” featuring the farmers who grow and supply their produce. Each of these vignettes focuses on one individual farmer and one specific variety of fruit or vegetable. Additionally, each spot is centered around one of three themes: the personal story of the farmer and his experience working with Walmart (“Growers’ Stories”), helpful tips for how to select, store and prepare a particular type of produce (“Tips from the Farm”) or Walmart’s money-back guarantee. At first glance, these spots seem rather simplistic. There’s no trendy music, no rail-thin models indulging in the products, no Hollywood-worthy camera tricks or special effects. After all, we’re not selling iPads or BMWs here. But delve below the surface, and you’ll discover true marketing genius at work. Let’s look at the three core principles that make this campaign powerfully effective and how you can apply the same concepts to your own marketing strategy:

1. Serve before you sell.

Of course, these spots are designed to sell produce. As Walmart continues to take a bigger bite out of the grocery market with the aggressive expansion of its “Neighborhood Market” and “Walmart Express” concept stores throughout the country, they need to make sure that consumers think of them as their go-to destination not only for tires and diapers but also for tomatoes and dairy products. However, in the “Tips from the Farm” series, Walmart eschews using an overt sales message in favor of providing valuable, relevant information to their customers to help them make better buying decisions. For shoppers, there’s nothing more frustrating than spending their hard-earned dollars on fresh fruits and vegetables only to get home and find that their watermelon has no taste or their tomatoes have a mushy texture. With this understanding in mind, Walmart offers helpful tips on how to select, store and use these items to help their customers make the most of their grocery budgets (Don’t wash your strawberries until you’re ready to use them! Don’t put your tomatoes in the refrigerator! Pick an avocado with a firmness similar to the palm of your hand!). And who better to give this advice than the farmers who have dedicated their lives to understanding everything there is to know about these crops? To apply this principle to your own marketing strategy, think about your area of expertise and how you can put your inside knowledge to work to help your customers. For example, let’s say you own a home renovation business. Any homeowner who has undertaken a remodeling project knows how quickly all of the choices they must make can become overwhelming. Give these potential clients a hand by producing a series of videos that explain the advantages and disadvantages of different materials for countertops or flooring or showcase trends in lighting and other decorative fixtures. You’ll likely find that by dishing out a little free advice, you can earn major trust points with potential customers.

2. Be human.

One of the criticisms most often launched against Walmart is that it’s a big, unfeeling corporate giant with no face and no heart. But the Growers’ Stories spots show us that behind the Goliath, there are many Davids, and when we buy watermelons from Walmart, we’re actually buying them from third-generation farmer Jack Wallace in Edinburg, Texas. And we’re buying tomatoes from Scott Rush in Florida and strawberries from Mike Ferro in Oxnard, California. These are honest, hard-working Americans who care deeply about putting a quality product on your dinner table. The lesson here is this: Branding is important, always. But your company must be more than a brand. It must be human through and through. Whenever possible, you should remind your customers that they’re working with a team of people who are passionate about what they do, driven to exceed expectations and honestly apologetic if and when mistakes are made.

3. Counteract your brand’s vulnerabilities.

To sell anything – whether it’s a tomato or a tablet or a total kitchen remodel – you first must overcome the psychological objections of your customer. The current trend among foodies is the local food movement, which is focused on buying and using fresh, locally sourced ingredients. As cited previously, one of Walmart’s biggest branding challenges is their perception as the enemy of Main Street and the nemesis of the Mom-and-Pop. Therefore, Walmart is the antithesis of all things local, right? Not necessarily. As their Growers’ Story spot on tomatoes demonstrates, Walmart partners with small farmers around the country to distribute locally grown produce to nearby stores. And, in the end, if a customer is not satisfied with the quality of the produce, they can get their money back. The combined effect of these two messages is that Walmart has implicitly defended itself against a commonly held negative perception about its brand while negating any risk for customers in giving their products a try. What can you take away from this approach? Every brand has its weaknesses. While you don’t want to explicitly acknowledge these vulnerabilities, at every step along the way in the sales process, you should be aware of the red flags and concerns that might be giving your customer pause, and proactively counteract those inhibitions by providing  helpful (and true!) information that will help them make a confident buying decision.

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