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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10 Things You Pay for From Traditional Marketing Agencies

In today’s business world, it’s no longer the big fish that eats the small fish; it’s the fast fish that eats the slow fish.

In the same way the information revolution has changed how customers and market share are won, it has also reshaped the old systems that once governed how companies operate and how people work. The future of business is more flexible, faster, leaner and smarter.

This is not just about adopting a telecommuting policy or forgoing the purchase of that expensive copier. It’s about changing how business is done, both in philosophy and in execution.

The penalty of clinging to old business practices is losing clients that no longer can justify bills with unneeded overhead baked into them. As leaner and smarter companies emerge, the old juggernauts who are slow to change are quickly dying.

Marketing agencies

At the top of the scale of corporate bloat are marketing and advertising agencies. While not all industries can shed their physical offices and adopt a virtual model, the dominance of digital marketing coupled with the very nature of marketing’s day-to-day business operations afford these agencies a clear-cut path to modern efficiency.

However, in reality, few have changed. The majority of marketing firms hang on to these old systems of operations, passing on the burden of their expenses to their clients.

The traditional marketing firm still maintains an expensive posture to attract its clients.Why? Most find changing their methods of operations to be just as hard as adapting to today’s Web culture and the new rules of doing business. Too much has changed too quickly. In clinging to old methods – even those of its own self-promotion – the traditional marketing firm still maintains an expensive posture to attract its clients with their lavish offices and costly travel. These companies force work into physical locations, perpetuating the punching of clocks and shuffling of paper, while carrying years of old business operations in the form of debt, all of which must ultimately be paid for by the client.

There’s a reason why marketing companies are dying left and right, beyond becoming irrelevant in the digital age. Today's clients no longer accept invoices inflated by bloated operations, particularly when virtual companies can do more at a fraction of the cost.

The rise of the virtual company

It took time for companies like Amazon, Netflix and Apple to revolutionize and overtake industries that were once based in bricks and mortar. Replacing the physical form was a challenge in reconditioning the mind of the consumer and in reshaping traditional systems, such as fulfillment, customer service and exception handling.

2010 will see the emergence of the virtual company in full force.These initial obstacles were quickly overcome as consumers realized the advantage of lower prices by way of lower overhead, mutually beneficial partnerships and geographical barriers being torn down and giving way to an expanded market. Today, that same virtual model that started strong in the retail sector is being adopted throughout all applicable industries. As a result, virtual companies are growing at record pace.

2010 will see the emergence of the virtual company in full force. The convergence of technology, communication, new service-based companies and systems that meet the demands of companies that no longer carry the burden of bloated operations will allow more companies to work smarter, faster and from anywhere.

As virtual companies continue to refine their systems and clients continue to realize the value in receiving better service for less money, the virtual company will gain strength and overtake the outmoded traditional business models. This not only improves efficiencies but tears down geographical barriers to markets and talent.

As we enter the age of the virtual company, let’s review ten things you pay for from traditional marketing agencies:

1. Facilities

Office space is typically the largest expense on the books for marketing agencies. These obligations range from rented space in a shared office park to owning (and owing for) real estate, freestanding buildings and parking facilities.

Virtual marketing companies shed this expense because the nature of the business simply doesn’t require it anymore. Marketing is digital, and print is dying. All the infrastructure that was once housed in a physical location is now replaced by a range of new digital services. Communication is conducted through e-mail, mobile devices, video conferencing and client dashboards rather than on-site meetings and client lunches, the costs of which are ultimately passed back to the client.

The marketplace demands geographic barriers be removed to hire, collaborate and partner with the best talent in the industry. The virtual company’s employees work remotely within a virtual space that accomplishes anything that a physical location provides and more. They are mobile and available at a moment’s notice to meet with clients. Even remote offices, meeting spaces and presentation rooms can be rented by the day or hour, as needed, so as not to waste money on a fixed building that sits there to house all the bloated systems and conventions the traditional marketing company clings to.

2. On-site employees and physical work systems

For many office-based companies, the days of having people gathered in a building to work is gone. For these businesses, the act of keeping people around was just another form of time card punching, rooted in old systems founded on the demand for people to be present and available to coworkers and customers from 9 to 5.

Happy employees do better work, particularly the ones responsible for great creative work.Virtual companies don’t operate according to fixed 9-to-5 schedules. Instead, their systems and employees are faster, more flexible, working within tighter deadlines and using new, more robust project management conventions.

Telecommuting is more prevalent today than ever, for reasons that go beyond avoiding the cost of expensive office space. Happy employees are ones that are not trapped in cubicles, hustling through traffic, burning 30-40 hours and hundreds of dollars a month in commuting to a fixed place to do work that can be done anywhere. The fact is, happy employees do better work, particularly the ones responsible for great creative work.

Moreover, work systems based on having everyone in a centralized office all day are terribly inefficient. To see this, you have to look beyond hard costs and expenditures and consider the man hours wasted on meetings, scheduling, water cooler talk, Web surfing – the list goes on and on.

Replacing the physical office environment are proven virtual office management and collaboration systems like Basecamp, video conferencing, cloud computing and mobile Internet connectivity. Most importantly, the philosophy behind the work is based on maximizing project development efficiencies rather than filling up a 40-hour work week simply for the sake of adhering to convention.

3. Utilities

From security systems, electricity, heating and A/C to cleaning and facility repairs, the auxiliary costs of maintaining a facility can be extraordinary. This is an expense that virtual companies leave behind and don’t pass on to their clients.

4. Landline phone systems

In an age where business is a 24-hour, anywhere and everywhere proposition, corporate phone systems are an enormous waste. Everyone has a cell phone, and most working professionals carry smartphones. For many, the superfluous office phone collects dust, and voicemail systems are rarely used. In a time when most households are shedding the costs of landlines in favor of more flexible and leaner mobile options, many businesses still lag behind.

Agencies that continue to operate from a physical facility must pay to maintain and upgrade expensive landline systems, adding yet more extraneous dollars per hour to their clients’ bills.

5. Office furnishings

Expensive offices, conference room tables, desks, chairs, bathrooms, kitchens, interior decoration and even trophy cases displaying purchased accolades are omitted from the overhead costs of all virtual companies.

6. Computing infrastructure and LANs

So many companies still keep gobs of file and printer servers along with data backup systems, server redundancies, uninterrupted power supplies, routers, switches, cabling, internal e-mail systems – the list goes on.

For virtual companies, the idea of a LAN (local area network) has been replaced by cloud computing, with Web-based service providers, project management, collaboration systems, and applications. These systems are accessible from anywhere in the world, offer true collaboration with anyone and are always backed up and protected.

What’s more, project management in the virtual space allows for new and innovative work habits that promote speed, efficiency and flexibility in ways old companies employing old work systems simply cannot keep pace with.

7. Paper

So many of the slow, dying companies we see today still live in an office with paper circulating all the time. Believe it or not, nowhere is this more true than at your local marketing agency. Also included in this paper-filled world are printers, copiers, fax machines, shredders and a never-ending variety of supplies, all in support of paper trails that lead from the office to the client and back again before ending in nicely climate-controlled filing cabinets.

Virtual companies exist in a paperless world, and the best work circles around those that stay in a paper-driven office. The benefits of going (and staying) completely digital are immense. Digital documents are searchable, sharable, versioned, more secure and viewable on nearly any device. The more files that are kept, used and cataloged in digital format, the more efficiencies will increase overall.

8. Support staff and personnel

When agencies pay for an office, furnishings, phone systems, computing infrastructure and everything in between, they also require additional personnel, time and resources to support those systems, including office managers, receptionists, IT staff, cleaning crews, landscapers and security, to name a few. Thus, these already excessive expenses are further exacerbated and passed on to the client.

9. Restricted geographical barriers

If there’s one thing the Internet has brought to the economy, it’s the expanded marketplace. The business systems of virtual companies are not only set up to take on clients without most of the additional expenses suffered by traditional companies but to hire the best talent available anywhere.

Truth is, many marketing agencies are restricted to their local markets. While these firms would in theory jump on a plane to take on a client nearly anywhere, most find in practice that only local clients are cost-effective given the traditional systems still employed.

10. Debt

The result of all of this expense in a world that is quickly shifting to leaner and smarter operations is that this much of the excess is carried forward in debt that comes at a premium paid to a bank in interest. That ongoing obligation is passed to clients along with the cost of all other inefficiencies.

Virtual companies that start fresh, using smart, lean and flexible systems of operation don’t carry years of bad investments in outmoded, expensive systems on their backs. In fact, as traditional marketing agencies continue to lose clients and market share to these more adept modern firms, the additional debt taken on to stay alive will eventually lead to the extinction of the slow, bloated traditional marketing company as we know it.

photos: Flickr: Christ0ff, chrisdlugosz

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What Does the Demise of Internet Explorer Mean for the Future of Website Design?

On January 21, 2015, web developers everywhere let out a great collective sigh of relief. Why? Because that was the day Microsoft announced that Windows 10 will ship with a brand new browser, code-named “Project Spartan,” thus effectively signaling the inevitable demise of the old stalwart Internet Explorer. According to Microsoft, Spartan is designed to provide a more interoperable and reliable experience with advanced features including the ability to annotate web pages, a distraction-free reading experience and integration of Cortana for finding and doing things online faster. While this all might sound appealing to the average user, it is particularly welcome news for web developers, for whom Internet Explorer has long been regarded as the very bane of their existence. You see, each browser interprets code in different ways, and each has different versions that offer different capabilities. While Chrome, Firefox and Safari do have their differences, for the most part they have the same capabilities. However, Internet Explorer, or IE, has historically been the odd one out, notorious for causing issues for website designers due to its lack of capabilities, especially in older versions like IE7 and IE8 (which, for example, does not support such simple design elements as rounded corners and text shadows). But while web devs are raising their glasses to toast IE’s impending downfall, you’re probably left with more than a few questions. After all, since IE has been the standard Windows browser since the mid-1990s, that little blue “e” icon has become synonymous with the Internet for many everyday users. So what exactly does Microsoft’s decision to do away with Internet Explorer mean for you – and most importantly – for your website? Let’s explore (no pun intended).

The challenges of IE

On today’s Web, the various browser manufacturers have agreed on a certain set of standards that they will all obey. This is incredibly important for web designers (and, by extension, for businesses that have websites), because it means that as long as your website conforms to those agreed upon standards, it should be displayed in a fairly consistent manner no matter which browser a visitor uses to access your site. Unfortunately, this is not always the case. In the mid-to-late 1990’s, Microsoft was engaged in a heated race for market share with the other most popular browser of the day, Netscape Navigator. Instead of agreeing on a singular set of standards, these two companies tried to outdo each other by adding proprietary features to their software that would interpret and display websites differently. This created a lose-lose scenario for web designers and businesses, as it meant that you either had to develop two different versions of your site (one for each popular browser) or dictate which browser visitors should use (this is why it became commonplace to see disclaimers on sites reading something like “Best viewed in Internet Explorer 4”).  This exclusive approach is what led some companies to build the software they use to run their business for those specific platforms. Even now, almost 20 years later, companies that continue to use that software may still be dictating that their employees must use a woefully outdated browser. This is where IE begin to falter, especially in the court of public opinion. As newer browsers, such as Google’s Chrome – which now ranks as the most popular according to many studies – began to enter the market, people started using them at home. They quickly discovered that these modern browsers were not only much faster but that they also included many new features and capabilities. It didn’t take long for consumers to develop a strong preference for these newer browsers and to begin pushing back against their IT departments’ requirements that were keeping them shackled to antiquated versions of IE at the office.

Microsoft realizes the problem

You might think that Microsoft would love any scenario in which people are forced to use their browser. On the contrary, however, it has created a major PR problem for them. The same IT departments that would not allow employees make the switch to a new browser also prevented them from upgrading to newer versions of Internet Explorer. The reality is that those new versions of IE are very capable browsers that, like the others on the market today, conform to the standards that are an important part of modern web design. Microsoft wants customers to begin using these new versions of their software because the continued use of versions that were originally released 10 years ago or more has created a vey negative perception of their product in the marketplace that has tainted the Internet Explorer brand as a whole.

The struggles of web designers

While old versions of web browsers certainly pose problems for consumers, they are doubly challenging for web designers and for the companies they build sites for. Testing newly developed websites in legacy browsers to ensure reliable backwards compatibility  is a critical step in the process that requires significant time and effort, creating overhead that adds to the timeline and budget of every project. Exactly how many people are visiting your site with those outdated browsers? It depends on the nature of your business. For instance, my company works primarily with IT professionals, and our traffic numbers indicate that the majority of our audience uses newer browsers (including many on mobile devices). As a result, we don’t need to develop and test for very old browsers because our visitors simply aren’t using them. However, if your business serves a more broad base of consumers – and especially if many of your customers are likely to be older and/or less tech savvy – it is important to ensure that your site performs equally well on new and old browsers alike. A good place to start is by examining the analytics data for your site, which can tell you which browsers are being used to access your site. One of the nice things about newer browsers like Chrome and Firefox (and even current versions of IE) is that they auto-update. This means that they automatically download and install their own updates so we no longer need to worry about radically outdated versions of the software. However, older versions of IE do not do this, which is why we still struggle to support software that came out over 10 years ago. With Microsoft’s new browser – which we expect will include auto-update approach – we may hopefully have arrived at a point where even that legacy software is forced to be rewritten for the new age and we can all say a final goodbye to outdated browsers.

Better days ahead

So what does the emergence of Project Spartan mean for your business and your website? In the short term, you may not feel an immediate impact, but you likely will begin to reap the benefits in the not-too-distant future. If Microsoft succeeds in its objective of transitioning customers away from old versions of IE and adopting their new Project Spartan (or other more current and capable browsers), by the next time you are ready for a redesign, the amount of time required for browser testing may be significantly reduced because the browser landscape will have gotten less diverse with the continued shift away from those legacy browsers, which can only mean good things for your project budget! Another benefit will be a greatly reduced potential for users to encounter problems on your site due to browser compatibility issues, which of course means less chance that a frustrated visitor will need to call your company for support (best-case scenario) or will give up on your site and go elsewhere (worst-case scenario). Finally, the release of a new, more capable option from a company that has been at the forefront of browsers for years (despite popular opinion, Microsoft remains a power player in the world of the Web) is a great thing because it gives users more options. And if Microsoft is successful, their competitors will inevitably up their game as well – and that is good news for everyone!

Don’t throw dirt on IE’s grave just yet

While there is certainly much to look forward to with the future release of Project Spartan, unfortunately, we can’t call time of death on IE yet (as much as we might like to). As AdWeek’s Krista Monllos explained to NPR, Spartan is in for an uphill battle: “By introducing a new browser, you're asking people to change their daily habits. If someone is used to Chrome or used to whatever it is they use, they probably don't want to change.” After all, Internet Explorer still accounts for almost a quarter of the present-day desktop browser market, and IE8 is still used by almost seven percent of people in the United Sates. Therefore, moving forward, it will be important to keep a finger on the pulse of the shift in these numbers – as well as any changing trends in your own analytics data – in order to ensure that your site is designed and tested to serve the needs of your users, no matter where they may fall in the continuum of browser evolution.

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