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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Check it Out: 10 Ways to Stop Shopping Cart Abandonment

It’s not over until the cash register rings

A customer has found your site, browsed your store and added several items to their cart. You’re home free, right? No so fast...until they’ve confirmed their purchase, you’re still at zero, and you still have plenty of opportunities to derail the sale. Fatal flaws in your checkout process can not only cost you the potential sale at hand but also drastically decrease the likelihood of that customer ever returning to your site to buy from you in the future. If you’re experiencing a high occurrence of shopping cart abandonment, here are 10 ways to fix the obstacles and annoyances that are driving away customers and crippling your conversion rates:

1. Eliminate all chance of unpleasant surprises.

Make sure customers have all the information they need upfront to make a confident buying decision. This includes confirming the availability of the item; calculating promotional pricing or discounts; mapping out shipping options, costs and timetables; specifying whether or not sales tax applies to the purchase and clearly defining your return policy. If a customer reaches checkout only to discover that the particular item they wanted is out of stock, ineligible for an advertised discount or costs more to ship than they are willing to pay, odds are good that will be the last you see of them.

2. Display relevant details in the cart.

The shopping cart itself should provide a clear overview of the pending purchase at a glance so that customers do not have to navigate away from the checkout process to confirm the details of their order. Keep in mind that by this point in the process, your shopper may well have clicked to and from the cart numerous times as they selected multiple items, browsed various categories of products or compared one item to another, and they may be fuzzy on the specifics of everything they’ve chosen. Without the benefit of being able to glance down into a physical shopping cart to review their selections, they need reassurance that the package that lands on their doorstep will contain exactly what they intend, so be sure to provide thumbnail images, descriptions, quantities, sizes, colors, prices, availability and applicable discounts for each product in the cart.

3. Allow changes within the cart.

Every time your customer navigates away from the cart, you’re running the risk of losing them, so make sure that they can edit details such as quantity, size and color without having to locate the product page a second time.

4. Offer multiple payment options.

If you’re conducting e-commerce business online, your site should be tied in to a secure payment gateway. However, offering the option to complete the transaction through a third-party processor like PayPal or Google Checkout can put some customers – especially those who may not shop online often – at ease because they don’t have to release their credit card number and billing information directly to you. Conversely, PayPal and Google Checkout shouldn’t be the only options you provide. If a customer does not already have an account established with one of these payment processors, they may not want to create one just to do business with you.

5. Don’t require customers to create an account.

Without a doubt, it’s awfully tempting to require customers to create an account to complete their purchase because it will allow you to collect valuable data from them for future sales analysis and marketing. However, given the sheer number of social media and e-commerce sites that your customers likely interact with, they may very well have account creation fatigue. They may not want to establish yet another user account and password just to make a purchase, especially if they don’t necessarily anticipate ordering from you again in the near future. The best approach is to offer two options: checking out as a guest, which will expedite the process, or creating an account, which offers conveniences appealing to those who do shop with you often, such as eliminating the need to re-enter their shipping and billing information every time they make a purchase and allowing them to check on the status of an order. The key is to let your customer make the choice that suits them best; don’t force the issue and lose a sure sale in pursuit of future marketing opportunities.

6. Simplify and streamline.

Online shoppers are notoriously impatient, so don’t ask for more information than you need to complete the transaction, and don’t break the checkout process into more steps than necessary. Make sure as well to display a breadcrumb trail that indicates how the checkout process will progress. If a customer can see at step one that they only have three steps left to complete their order, they won’t get impatient or frustrated as they move from one screen to the next, not knowing what’s coming next or when the process will be done.

7. Cater to the on-the-go shopper.

When evaluating your checkout process, don’t forget about mobile users. A customer may be standing in the bricks-and-mortar store of your competitor and comparison shopping on their phone. If you offer the better price, don’t you want to make it as easy as possible for this customer – who’s clearly ready to buy – to order from you on the spot instead? This is another reason why it’s critical to streamline the steps within your checkout process as much as possible as well as to ensure that form fields can be easily completed on touch-based devices. Walk through your checkout process on as many different types of mobile devices and platforms as you can get your hands on, and don’t waste any time in eliminating any obstacles or road blocks that you discover.

8. Don’t give up too soon.

In the age of multitasking, sometimes a customer will simply get distracted before they have a chance to complete their transaction. The phone rings, the baby wakes up from her nap, the computer freezes, the pizza delivery guy arrives, etc. Or sometimes, they just need some extra time to make a decision while they continue to do research, get opinions from friends and the like. While you can’t do anything to mitigate this type of offline interference, you still have a chance to save the sale. A persistent shopping cart retains the items your customer has selected for a set period of time, whether that’s a few hours or a few days. When your customer has a chance to return to their computer, they can pick up exactly where they left off rather than facing the hassle of tracking down each item again, even if they had closed their browser window.

9. Never underestimate the importance of the human element.

If your customer has a question as they are progressing through checkout, the easiest, most reliable way to ensure they don’t lose momentum is to display your customer service phone number prominently at every step along the way. A simple question should have a simple resolution, and usually that is best provided in real time by a human being. If you leave your customers to their own devices to find the answers they need, you’re running the risk of allowing them to become distracted or frustrated and losing all interest in completing the order.

10. Reinforce trust at every turn.

As with all elements of doing business online, trust is key. In the absence of face-to-face human contact, you must rely on your website to build trust for you if you want customers to choose to spend their hard-earned dollars with you rather than with your competitor. Some elements of trust-building in e-commerce are obvious. Do you display your SSL certificate to reinforce security? Do you feature customer testimonials or reviews to boost confidence in your reputation? Is it easy to locate your company’s phone number, physical address and return policies so they feel assured that they can resolve a problem or obtain a refund without hassle? Other elements are less tangible. Does your site have a polished, refined look and feel overall, or does it look dated or sketchy? Do you offer value-added content like how-to videos or blog articles that convey to your customers that they are doing business with experts who are knowledgeable and passionate about their products? Thanks to the proliferation of Internet scam artists, the burden of earning trust with online shoppers is steep, but it is surmountable with careful attention to detail.

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Should There Be an App for That?

Getting into your customers’ pockets is no easy task.

With the tablet wars heating up and smartphone sales skyrocketing, at some point, the thought is bound to cross your mind: Is it time to create an app? The lure of being with your customers everywhere they go and being readily accessible with the tap of a finger is certainly hard to resist. And with over 350,000 iOS apps in Apple's App Store and over 200,0000 apps in Google's Android Market, it’s clear that many companies have eagerly climbed aboard the app development bandwagon. Thanks to a proliferation of DIY app templates, the barriers to entry in the app marketplace are not as steep as they once were. But you can't simply judge the merits of creating an app as you would would any other marketing tactic. Instead, you should look at your potential app as a product in and of itself. You wouldn't put time and money into developing a product without a reasonable amount of confidence that a market exists for it. Same goes for an app. You can build it. You can get it into the app store. But if it's not something people want, your efforts will be for naught.

Your app must meet these eight basic criteria, or else it's not worth the investment:

1. It must be designed around business growth objectives.

To justify the necessary investment, your app must be aimed at promoting the growth of your business, whether it does so by making it easier for your customers to buy from you or keeping your brand at the forefront of their awareness. Sure, plenty of big names have created vanity apps that don’t serve a business growth function, but that’s not a luxury the average company can afford. For example, Mercedes offers an iPad game called SLS AMG HD that allows users to put their driving skills to the test through a series of tunnel challenges. Sure, it’s a slick-looking gimmick. But is it actually doing anything to improve the company’s bottom line? Does anyone who is inclined to buy a Mercedes really need an iPad racing game to tip them over the edge? An app in and of itself is not a marketing campaign. If your goal is to boost the visibility of your brand, creating an app is a very indirect and costly means to reach your desired end. Remember that you'll be competing with hundreds of thousands of other apps to be discovered by smartphone users. Your chances of creating something so new, so different and so out-of-the box that it will go viral and jump to the top of the download charts are slim to none. What's more, even the number of downloads your app gets is no guarantee of ongoing exposure to your customers. According to a recent study, as many as twenty-six percent of apps are opened only once after download. With odds like that, if your sole purpose is elevating the visibility of your brand, there are no shortage of other tactics – from SEO to pay-per-click advertising to social media-based PR campaigns – that will likely deliver a better ROI.

2. Its utility must be customer-driven.

No matter what, your app development process shouldn't be an exercise in ego-stroking. Forget what you think is cool or cutting-edge and look at your app through your customers' eyes. For your app to be successful, it needs to offer something people want, whether that's in the form of utility, convenience, content or all of the above. For the most part, your customers use their mobile devices for one of two purposes: productivity or entertainment. If you want to create an app that entertains, be prepared to bring the big guns because you're competing in a space with the heavy-hitters, from Facebook, Twitter and YouTube to a slew of professional game developers. The productivity space is easier to enter, but conquering it is still no easy feat. A useful productivity-oriented app must make it easy for your customers to accomplish the types of tasks they commonly perform while on-the-go. If your app is content-driven, it needs to be encyclopedia-worthy to warrant a spot on the reference shelf of your customer’s mobile device. It must be comprehensive and updated frequently, and its interface must be ultra-searchable and scannable. Whole Foods offers a great content-based app. Users can search its extensive library of recipes by keyword, input ingredients they have on-hand to get suggestions and create shopping lists on-the-fly. Search results are even classified by dietary preference, such as gluten-free or low-fat. This type of utility aligns squarely with Whole Foods’ target market. Undoubtedly, their app is the go-to resource for many health-conscious, time-strapped working parents who leave the office with no idea of what they’re going to make for dinner when they get home.

3. It must offer an optimal balance of usefulness and simplicity.

Your app should not attempt to be all things to all potential users, or it will be doomed to failure. Likewise, it also shouldn't simply be a mirror of your website's features. If that's your plan, you'll be better served by optimizing your existing site for mobile browsers. Generally speaking, the more features you try to cram into an app, the less intuitive it becomes to use. And as hard as it may be to imagine, app users are even less patient and more fickle than Web surfers. If your app is difficult to figure out or frustrating to use, they'll wipe you from their phone with nary a second thought. Therefore, it’s critical that your app’s purpose is clearly defined and that its functionality is streamlined. The FedEx Mobile for iPhone app is a perfect example of this balance of utility and simplicity. FedEx is a massive global corporation that offers a broad array of services to a highly diverse customer base. Its app, however, is limited to four main functions: obtaining a quote, creating a shipping label, tracking a package and finding a location – exactly the type of time-sensitive features you need at the ready when you’re trying to get that all-important document out in tonight’s shipment or awaiting an important delivery.

4. It must be mobility-oriented.

There are some tasks people like to do on their phones and some they do not. Any task that involves too many steps and is not urgent in nature is not going to be something your customers would choose to do on their phone rather than just waiting until they are in front of their computer screen again.

5. It must take advantage of the mobile device’s unique features.

Mobile devices have a number of built-in features that even many laptops don’t necessarily have, such as GPS, the ability to deliver push notifications, a camera and video camera. If you don’t plan to tie the utility of your app to any of these functions, it’s hard to justify creating a dedicated mobile app rather than just enhancing your current site to provide an optimal experience for mobile users. Amazon's Price Check is a great example of an app that takes advantage of the phone's camera function to allow users to scan barcodes and compare prices on-the-go. GPS is a little more tricky to use wisely. A lot of branded apps – from Gap's StyleMixer to USPS Mobile – use GPS to allow users to find their closest brick-and-mortar location. As an auxiliary feature it's a nice convenience for users who are already plugged into the app, but this type of function is not enough to justify the existence of an app in and of itself, as there are plenty of other mapping and searching apps that can deliver the same information with broader utility. Also, you should weigh the pros and cons of integrating push notifications carefully. If you can provide legitimate value to your customers with timely alerts, that's fine. But if you cross the line into intrusiveness, you're just asking to get deleted.

6. It must be applicable to a broad customer base.

The Chipotle Mobile Ordering app lets users place a completely customized order and pay directly from their phone in advance of arriving at the store. For a national chain with thousands of time-starved customers who have little patience for waiting in line, the app represents the perfect marriage of utility and marketing savvy. But apps like this require a certain scale to make sense. If you're a mom-and-pop bakery, you could theoretically develop an app that would let your customers design their own cupcakes and place their order right from their phone. While it would surely be a fun gimmick, it doesn't fulfill a broad-based need, and the app's ability to generate additional revenue would probably never offset the cost to create and maintain it.

7. It must be well-designed and thoroughly tested before launch.

The app marketplace is no place for experimentation. You have to get it right out of the gate. If you go live prematurely with an app that's underdeveloped, lacking utility or plagued with bugs, your bad reviews will haunt you for a long time. What's more, disenchanted users won't be likely to give you another shot even if you come out with something better later.

8. It must continue to evolve.

If you’re going to get into the app development game, you must be prepared to be in it for the long-haul. Once you launch your app, your job is only just beginning. App developers have raised the bar of user expectation for updates. You must monitor your feedback and respond with interface tweaks that provide a better experience. You should also add to and improve upon the functionality of your app regularly and keep it fresh with current data. If users see an app that has gone stale on the shelf, they're not going to be inclined to download it.

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