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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Business Toolbox: How to Standardize Your E-mail Signature

E-mail is the workhorse of communication for your business. It’s likely to be your first point of personal contact with prospective customers as well as your go-to vehicle for conducting day-to-day conversations with existing clients. As a result, your e-mail signature is an important – but all too often overlooked – extension of your brand. Just as you wouldn’t mail a letter or a proposal printed on any old paper stock, you should give equal consideration to creating and implementing a standardized corporate e-mail signature. However, this is where things get a little tricky. While your e-mail signature serves as your electronic business card, it doesn’t play by the same rules of branding that govern your stationery, website design or even participation in social media networks. Here are five common misconceptions that can lead you astray when crafting your signature:

1. If I’m going to represent my brand, I must include my logo.

According to conventional thinking, your company’s brand and logo are one and the same. However, as counterintuitive as it might seem, it is best not to include your logo in your e-mail signature. Why? Because it is difficult to control how images are interpreted and displayed by different e-mail clients. Most e-mail applications either store images as attachments or block them, resulting in a broken image. Therefore, if you construct your signature around a logo, and that image frequently is not displayed, it compromises the consistency and professionalism that you are trying to achieve. The best, most universally replicable alternative is to integrate your corporate colors in your signature, albeit with restraint. For example, you might choose to display your company name in one of your corporate colors, which will make it the most prominent element while also employing one of the primary elements of your visual brand.

2. Personality, personality, personality...it’s all about personality, right?

In marketing, yes. On Facebook, Twitter and LinkedIn, you’ll never get anywhere without personality. However, when it comes to e-mail, make sure your messages are friendly and personable, but keep your signature strictly professional. The one and only purpose of an e-mail signature is to let the recipient know who sent the message and provide a way for them to get in touch with you. You might think it’s fun to include your favorite quotation in every e-mail, but in doing so, you run the risk of unknowingly offending a client or prospect. And never include any non-company-related information in your corporate e-mail signature. Not a link to your personal blog, not the URL of your side-project website, not your Facebook, Twitter or Skype details. That’s only asking for trouble.

3. It’s important to make a lasting impression.

The only impression you want your e-mail signature to make is professionalism. If your clients remember your signature and not the point of your message, there’s a problem. Don’t give into the temptation to experiment with large, bold or multi-colored text. Don’t try to use the typeface from your logo; more often than not, it won’t be displayed properly by the recipient’s e-mail client. Stick with simple, plain, web-safe fonts in the same size as the body of your message, and you can’t go wrong. Returning to the example of mailing a letter or a proposal, there’s a reason you would never print your correspondence on multi-colored florescent paper. Like your letterhead, your signature should reflect the legitimacy and gravity of your business-related communication. It should never compete with your message or in any way distract from the information you need to convey.

4. I need to make sure that my clients can reach me by any and every means necessary.

There’s no question that great customer service is a key competitive edge in today’s marketplace. And it’s understandable why giving your clients your direct office line, 800 number, cell phone, fax number, IM handle, mailing address and LinkedIn profile would seem to convey that you are accessible at their convenience through any number of channels. However, a much better way to serve your clients is to provide the one method of contact through which they can almost always reach you. Most of the time, this will be a phone number (pick one: work or mobile). Then, rather than having to sift through a dozen different means of communication to identify the one they need or play guessing games about which one will connect them to you in the most expedient manner, it will be right there for them to find at a glance. As a rule, there’s no need to include your fax number or your mailing address in your e-mail signature. In the unlikely event that your client needs to send you something by fax or mail, you can either include this information in the body of your message, or they can jump over to your website, where these details should always be readily available.

5. I want to drive traffic to my blog / encourage people to follow me on Twitter / promote a limited-time offer.

These are all great marketing objectives. However, you must always keep in mind that e-mail is, first and foremost, a platform for communication between one human being and another. You wouldn’t wrap up a phone conversation with your client by asking them to be your friend on Facebook, and you wouldn’t conclude a sales meeting by making a blatant plug for your blog. Your e-mails aren’t billboards for your marketing message du jour; always keep it personal and professional. Including your website URL in your signature is a good way to indirectly promote your business, its presence on various social media networks and targeted marketing efforts without cluttering up your e-mail messages. If your customer or prospect clicks through to your site, they should be presented with all of these options – most likely before they ever leave the cover page.

Best practices for a professional e-mail signature

Follow these tried-and-true guidelines to ensure your e-mail signature is polished, professional and customer-friendly:

• Focus on providing only the most essential information about who you are and how you can be reached in an effective and unobtrusive way.
• Limit your signature to four lines (the accepted standard), with a maximum of 72 characters per line to optimize how it is displayed in different e-mail applications. Combine different types of information on one line by using pipes (|) to separate the text.
• Typically, you should include only your name, job title, company, primary method of contact and corporate web address. Don't repeat your e-mail address in your signature.
• Write out the URL for your company website rather than using hyperlinked text.
• Create different signatures for different purposes. For example, you might have one version for e-mails you send to vendors that includes your office line and another for client correspondence that provides your cell number.
• Always add a signature to replies, but include fewer details. For example, whereas your primary e-mail signature would most likely include your name, position, company name, contact information and web address, your reply signature might provide only your name, primary form of contact and web URL.
• Don’t include a legal disclaimer unless required to do so. The best practice is not to transmit confidential information in plain text in e-mails because that information could easily be extracted or forwarded.
• Use a signature delimiter to create visual separation between your signature and the body of your e-mail. The standard protocol recognized by most e-mail clients is two hyphens followed by a space and a line break (-- ).
• Don't use HTML formatting, as it can interfere with how your signature is displayed in some e-mail clients.
• Simple, plain text in the same size as the body of your e-mail is best. Employ bold or colored text very sparingly for emphasis, and use only your corporate colors.
• Don't use an image as your signature, and avoid including images in your signature.
• Be sure to test your signature in as many different e-mail clients as you can (including web-based applications like Gmail). Don't forget to also check how your signature looks when forwarded to ensure that all lines wrap correctly.

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