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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Vine 101: 10 Ways to Engage Your Customers in 6 Seconds or Less

Less than a year ago, three guys in New York City were working to build the next big thing in social media – a mobile video-sharing app called Vine. Their origin story echoes that of a thousand other start-ups we'll likely never hear about. But fortunately for the Vine guys, their little sprout got a big dose of Miracle-Gro when Twitter bought the start-up before it launched the app. Backed by the juggernaut of Twitter's resources, influence and platform, Vine reached the top spot in the free apps section of Apple’s App Store within just a few months of launch. Beyond this fast take-off and the Twitter fire-power that fueled it, it's also worth mentioning that Twitter co-founder Jack Dorsey is believed to be the driving force behind the acquisition. Dorsey is also the co-founder of highly successful mobile payment service Square, so you might say he's kind of a big deal in the world of tech start-ups. So that’s the story of how in just a few short months this newcomer to the social media scene has taken root and made a name for itself as a viable contender among the more well-established platforms (Facebook, Twitter, Instagram, etc.). Daunted by the idea of incorporating yet another social media site – with its own set of rules and idiosyncrasies – into your marketing program? Don’t be. Here’s a quick run-down of the basics and some inspirational ideas to help you get started using Vine to connect with your socially-savvy customers:

Getting to know Vine

Integration with Twitter

Even if you have no need or desire to support another social media tool, it's worth embracing Vine as an extension of Twitter. The two apps' tight integration makes Vine a convenient way to tweet video and audio. Vine’s short 6-second-or-less clips complement Twitter's 140-character microblogging format, so the name of the game is just the same: whatever you share, make it quick and compelling.

Simplicity

After using Vine for a few minutes, it will become evident that its development team focused on simplifying the experience of making and sharing videos. Creating a Vine requires little more than pressing the record button in the upper corner (conveniently labeled with a camera icon), touching the screen to start recording and releasing it to stop. Tap the checkmark to keep the video, add a caption and location if desired, then post to Vine, Twitter or Facebook. That's it. Concept, creation and publication in less than 30 seconds.

Big creativity in a small package

Doing more with less can actually push your creativity to yield impressive results. Without the complicated tools of traditional video production – with its expensive cameras, lighting and post-production – Vine both forces and frees users to focus on creativity, distilling ideas down to their purest form to tell a soundbite story.

Looping

Vine videos loop automatically. In fact, this feature is so central to the user experience that it's mentioned in the app store's very short description: "See and share beautiful looping videos." With their six-second time limit, Vine videos are often jumpy and hard to process on a first viewing. Looping enables viewers to catch missed details the second or third time around. But many Viners are also using this loop feature in creative ways, making videos in which repetition is central to the concept, like the 1990s cult-hit Groundhog Day.

Vine-spiration

Now that we’ve covered the basic how-tos, here are 10 ideas for using Vine in your marketing mix. One quick note: to pause any of the Vines below, just click on them.

1. Introduce yourself.

Share a behind the scenes look into your company culture, show off your super-talented staff or give a sneak peek into a special project. A simple wave from everyone will do, or like restaurant VIA, you can make it fun by making faces, or tap into an internet meme like planking as a team.

2. Make a stop-motion movie.

No matter how advanced video technology and special effects have become, stop-motion animation, with its often jittery feel, has captivated generations of children and adults alike. With its simple touch-based recording, Vine is built for stop-motion experimentation. Many of the most popular Vines use this technique, as seen in this gem from Twitter designer Ian Padgham (@origiful).

3. Build brand buzz.

Create a Vine tease to get followers excited about an upcoming event or product launch. Unlike commercials or marketing pieces with their long, resource-intensive production requirements, Vine is an easy way to promote in real-time. Late Night With Jimmy Fallon didn't need six seconds to tease a guest appearance by pop-star Justin Bieber – just a wig and a wink.

4. Introduce something new.

Maybe you can't afford a multi-million-dollar Super Bowl commercial to introduce a new product or service to the world, but hey, you've got Vine, right? Okay, okay. We know it's not the same thing, but even Pepsi, with its enormous marketing budget, turned to Vine to show off the new shape of its bottles. And their effort definitely did not cost millions to make.

5. Poll your peeps.

Want to take the pulse of your followers? Create a Vine that visualizes what you want to measure, and then ask for input in the comments. Comcast wanted to gauge the impact of promoting its SportsNet Twitter account during a hockey game. They owned the copyright for the broadcast, so they just published the clip on Vine. From the looks of things, they probably just recorded it right off the TV screen. Low tech, yes, but it works.

6. Create a moment of zen.

In the frenetic world of social media, a little tranquility is always welcome. Simply giving people a moment of calm among the chaos of the day can earn your brand some positive vibes by association.

7. Try some trivia to drive engagement.

People of all ages and backgrounds love trivia, and many can't resist a good riddle. Verizon mashed together game play, pop music and a feel-good holiday to give followers fun Valentine's Day-themed riddles.

8. Game on!

Like trivia, games are a great way to keep people engaged with your brand. We'll admit this one is a real challenge, but Vine user Brandin6 found a fun way to recreate a popular game from the 80s that gives new meaning to the term "video game."

9. Lure creative people to your team.

Want to find people for your organization that are social media savvy and creative? Vine is a great way to share your company culture in ways that will attract like-minded individuals that will keep that culture going strong. Better yet, hold a contest and have candidates submit Vines about why they want to work for you. It's a much more entertaining way to weed out applicants than giving resumes a ten-second look.

10. Celebrate the holidays (even the silly ones).

Even the most obscure holidays are good opportunities to produce entertaining content, like this geeky Pi Day celebration by our friends at VaynerMedia. The common theme underlying all of these ideas and examples is this: look for any excuse to make a Vine and then be as creative as possible. The Vine community rewards creativity. In fact, it's the driving force that fuels engagement with this new tool on the social media block...Hey, there's another idea: a New Kids on the Block parody. Vine win!

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TOMS Roasting Co. vs. Vogue’s Kimye Cover: A Cautionary Tale in Brand Evolution

Trends come and go. New technologies emerge. Consumer tastes, preferences and habits shift. As a result, brands must evolve or die. But with change comes risk. Will your next big idea be the next big thing or just a big black eye? After all, the history of marketing is riddled with spectacular failures and flops. Sony Betamax. New Coke. The Gap retro logo redesign debacle of 2010. In just the past few weeks two major brands – TOMS and Vogue – have taken major evolutionary leaps with very disparate results. Let’s examine their stories and the valuable lessons they offer to us all in how to maximize our brands’ possibilities for growth while avoiding potentially disastrous pitfalls.

TOMS takes on coffee.

On March 11, TOMS founder and CEO Blake Mycoskie took the stage at South by Southwest to announce its latest venture: TOMS Roasting Co., an ambitious new brand offshoot that encompasses a chain of coffee bars, a wholesale roasting business and an online subscription-based coffee club. Following the “one for one” business model that TOMS first pioneered with its shoes (donating a pair of shoes to a child in need for every pair sold), their coffee likewise comes served with a plan for doing social good. In this case, the “give” (in TOMS-speak) is water. For every bag of beans and cup of joe sold, TOMS will provide clean water to a person in one of the communities in Rwanda, Malawai, Guatemala, Honduras or Peru where TOMS sources its beans. The goal is to make “one for one” giving as much of a deeply ingrained part of their customers’ daily routines as their morning coffee. Reaction to this new venture has been overwhelmingly positive, with celebrities and average Joes alike singing the company’s praises on social media. Actress Olivia Wilde (@oliviawilde) tweeted, “Caffeine with a cause? Don’t mind if I do. I’m helping @TOMS’ mission to provide clean water.” Twitter user @hopevandy said, “TOMS is now selling coffee. My life is now complete.” It’s hard to ask for a more enthusiastic endorsement than that. While only time will tell if TOMS Roasting Co. is truly a sustainable business venture, it’s certainly emerged onto the scene with a well-caffeinated jolt.

Vogue bows to pop culture.

Jennifer Lawrence. Jessica Chastain. Kate Winslet. Sandra Bullock. Michelle Obama. Kim Kardashian and Kanye West. Which of these things is not like the other? On March 21, Vogue magazine proudly unveiled the cover of its April 2014 issue, featuring none other than tabloid power-duo Kim Kardashian and Kanye West (or as they’re known in pop culture circles by their portmanteau, “Kimye"). Immediately, the backlash was swift and vehement, with fans decrying that their Fashion Bible of Record had seemingly fallen prey to the most plebeian fate of catering to the lowest common denominator. Actress Sarah Michelle Gellar tweeted, “Well…I guess I’m canceling my Vogue subscription. Who’s with me???” – a message that has since been retweeted nearly 10,000 times and favored by almost 14,000 users. Another fan responded on Facebook, proclaiming the cover “The official death of Vogue” (a comment which has since received more than 1,500 likes). And while this one cover won’t likely be the singular undoing of this century-old prestige brand, it’s certainly a glaring misstep – one that’s likely to haunt its reputation for some time to come. So how can you ensure that your next big idea follows in the successful footsteps of TOMS Roasting Co. and doesn’t result in a disaster of Kimye-sized proportions? Follow these three commandments of brand evolution:

The three commandments of brand evolution

1. To thine own self be true.

On the surface, coffee does not seem like the next logical evolutionary step for a brand best known as a shoe company. After all, no one expects Nike to step up to the plate and start roasting beans anytime soon. However, shoes are not the core of the TOMS brand. It’s their mission: one for one. And by branching out into coffee, TOMS has created an opportunity for its fans to live that mission every day, not only when they need a new pair of shoes. As Mycoskie explained during an interview with TODAY, “I’ve been saying in the office, ‘Let’s start our day by improving someone else’s.’” By contrast, according to their own mission statement, “the foundation of Vogue’s leadership and authority is the brand’s unique role as a cultural barometer for a global audience. Vogue places fashion in the context of culture and the world we live in — how we dress, live and socialize; what we eat, listen to and watch; who leads and inspires us. Vogue immerses itself in fashion, always leading readers to what will happen next. Thought-provoking, relevant and always influential, Vogue defines the culture of fashion.” Juxtaposed against that is Kim Kardashian. She became a household name as a result of an illicit tape. She’s cemented her celebrity status with a basic cable TV reality show and an omnipresent claim on the tabloid headlines. She designs a clothing line sold in Sears. Which part of that is cohesive with a brand that wants to be “a cultural barometer for a global audience”? Vogue built its name as a brand of high-end aspiration. It’s not supposed to be a clothing catalog; it’s meant to be escapist fantasy. Kim and Kanye are as mass and mainstream as it gets. And Vogue’s readers (and perhaps now former subscribers) saw right through this stunt for what it is: a desperate, grasping, Hail Mary attempt to cling to relevancy in a world where print media outlets are a dying breed.

2. Know thy tribe.

For TOMS, branching out into the coffee business is not a move without risk. After all, there’s no lack of competition in the marketplace. However, TOMS knows its tribe. Customers who buy TOMS do so for a reason: to make a difference with their dollars. With their shoes, TOMS has cultivated with a distinctive style. Their signature beachy canvas slip-ons can be spotted at 20 paces, making a fashion statement that says, “I care.” TOMS knows their customers are torch-bearers who will champion their latest cause, proudly carrying their TOMS coffee bags and cups as a beacon of consumerism with a social conscience. And again, this is where Vogue seemingly overestimated the sheepish loyalty of its tribe. Perhaps the inherent danger in being a self-proclaimed arbiter of high culture and fashion is that it’s too tempting to think you’re better than your tribe. You know best, and they’ll love whatever you give them because you tell them to do so. A word to the wise: you’re never above your tribe. If you lead them, it is by permission through hard-won trust. And that permission will be quickly revoked if that trust is betrayed. First, last and always, you must demonstrate that you exist to serve your tribe and have their best interests at heart.

3. Engage your evangelists.

For a month leading up to the big reveal, TOMS teased their fans. They plugged the upcoming announcement. They solicited guesses from their followers about what the new product would be and publicly promoted those who participated. They challenged their customers to take the cleverly hashtagged “#onedecision pledge” to “change one decision that will help change a life.” In doing so, TOMS literally created an appetite for their coffee. Their customers felt a sense of ownership over the new product line before they even knew what it was, and as a result, came locked and loaded with a sense of investment in its success. Of course, this approach only succeeded because they also delivered on the anticipation with a truly great product that follows commandments #1 and 2 above. After all, publicity in the absence of authenticity is just a recipe for disaster, right Vogue?

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