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.

---

Tribes in Today’s Marketing

What is a tribe?

Simply put, a tribe is a group of people that connect around a common goal. Tribes can exist anywhere and can be based upon any shared interest, no matter how specific. In fact, you are most likely a member of a tribe or even multiple tribes. You may even lead one. Behind every major movement and successful marketing engine there is a tribe. Behind every major movement and successful marketing engine there is a tribe. Barack Obama leads one in which he can raise millions of dollars in a single day. Steve Jobs leads a tribe comprised of a cult-like following of brand evangelists who hang on his every word during his two-hour product launch event and then go out and do Apple’s marketing for them. Tribes are not always large. Some don’t want to be big. In fact, many are exclusive. The common element around which most tribes form is actually quite narrowly-defined. These tribes are not just for golf, but for those afflicted with a natural slice in their swing; not just for personal finance, but for those obsessed with maximizing the energy efficiency of their homes; not just for shoes, but for those infatuated with handcrafted Italian leather stilettos. Balloon artists, amateur photographers, collectors of exotic southwestern jewelry, Ford Mustang enthusiasts, avid Mac users, city managers engaged in innovative economic development – all of these are tribes that gather. For their members, their interest is an intrinsic part of their identity, and their association with their peers is a point of pride. Anytime people make connections based on a shared passion, similarities in background or a common need for solutions to improve their lives, a tribe is born.

What’s changed

Tribes have always been around. Before the days of the Web, smartphones and Facebook, communities would form based on commonalities and gather face-to-face. Naturally, these tribes were geographically-based, and their numbers were fewer and limited to the most popular interests. Today’s tribes are different. The advent of the Information Age tore down geographical barriers by introducing platforms of persistent conversation and information sharing. Online message boards, which have been around for decades, overcame the limitations of locality and allowed for a tidal wave of tribes to be formed – not just big tribes, but ones that were small and highly specialized. People now had the tools they needed to find others with a shared passion and make an instant connection in the absence of physical proximity. As technology continued to evolve, the Web provided a more robust platform for these communities to take form. Smarter and more relevant searching allowed people to find outlets for their passions through 200 million websites. Website creation tools became more accessible, allowing those with limited technical know-how to create online hubs where their tribes could gather. Add to this new tools for scheduling, collaboration, coordination and real-time communication as well as wifi and the mobile Web, and you have fertile ground for tribes to flourish around any and every common goal and interest.

New types of tribes

In the past few years, the evolution of social media has allowed people to connect in ways that are not based solely on common interests but also on commonality in relationships and geography. When communities form around who their members are, where they live and how they relate to each other, a new dynamic is introduced. The tribe concept becomes even more powerful and pervasive as people forge ties around commonplace goals in their daily lives. For geographically-based tribes, the day-to-day problems of life – from finding the best deli in town to getting a recommendation for a good mechanic to obtaining a reference for a trustworthy electrician – are solved through the formation of tribes based on members’ inherent commonalities. Tribes can form around many different types of relationships. Whether it’s families bound together in a social network or colleagues that develop a web of connections on LinkedIn, the common thread that ties all these communities together is the relationship of their members to one another. in a world ruled by tribes, word-of-mouth is king Communication travels quickly through these organic networks, in most cases crossing over to other networks. Something as seemingly simple as a recommendation for TurboTax software during tax season spreads virally via word-of-mouth advertising from tribe to tribe, as members seek to solve problems in ways that enhance their own lives, the lives of others they care about and the environments in which they live. Thus, in a world ruled by tribes, word-of-mouth is king. Trust is not only essential; it is required.

The old system of marketing

Before the economy was overtaken by tribes of highly interconnected and informed consumers, success in marketing was achieved by the companies with the largest budgets and the greatest capacities to pummel the public into purchasing their brands. If you were selling a product 10 years ago, you would have run expensive advertising campaigns based on interruption, hitting the consumer over the head with your message as forcefully and as often as possible. The objectives driving this type of intellectual spamming were to raise brand awareness, create demand for more product, obtain wider distribution and ultimately apply those profits to more ads in order to fuel this vicious cycle. In what’s left of mass media, this wasteful practice still goes on. Arby’s invested more than $85 million interrupting everyone with an oven mitt to sell sandwiches. Progressive and Geico spend a fortune flashing their brands in any and all media and markets. Nike poured hundreds of millions into endorsements and marketing to sell more Tiger Woods-branded products simply because they could command higher prices. National brands aren’t the only ones guilty of still marketing by interruption and spamming. From law firms to home builders to car dealerships, local businesses in every town dump truckloads of money into carpet bombing the public with ads in local magazines, newspapers and television, shouting their claims that they’re the best, they’ve discounted everything yet again, they have too much inventory and everything must go.

Marketing in a tribe-driven world

Today, trust rules the marketplace. People have many more choices and much less time than ever before. As a result, they invest their time carefully in their passions, in the issues that count and in the things that make a difference in their lives. They have no use for or trust in traditional advertising. Instead, they belong to a tribe, and they follow the movement of its members and leaders. These tribes are formed and move with or without you. Today’s successful marketers bow to the tribe, reforming how they do business, how they develop products and how they grow accordingly. The power and influence you command through the trust you earn from the tribe is unrivaled by any form of advertising. Your membership in the tribe is earned through trust and trust alone. Trust gives you permission to talk about your ideas as well as what you are doing to improve the lives of its members. When you are active and demonstrate honest intentions and selfless motives, you are promoted by the tribe’s leaders. The power and influence you command through the trust you earn from the tribe is unrivaled by any form of advertising. In this way, the tribe is your marketplace.

Getting there

Many companies, particularly local businesses, have a hard time mapping the connection between tribes and their bottom line. In fact, most are challenged to identify where tribes exist or, if they must, start and lead a new tribe. The fact is, any successful act of business creates a solution for a problem or improves people’s lives in some way. Underneath that solution are people who are already talking about all the issues surrounding it every day. Your focus in growing your business should be to identify your tribe and lead it. Weber doesn’t just sell grills; they lead a tribe of grilling enthusiasts. Jeep doesn’t just sell cars and accessories; they lead a tribe of off-roading die-hards. Gary Vaynerchuk doesn’t just market wine; he leads a tribe of a million wine aficionados. Fame Foundry doesn’t just sell marketing and website design; they lead a tribe of entrepreneurs and decision-makers whose passions are focused on business growth. Your passion for your business is your license to lead. You don’t need to be a national brand to be a tribe leader. Your local dentist doesn’t just sell her services; she leads a local tribe of people that care about healthy teeth. She may have only 25 true fans, but when they tweet or post their endorsement for her practice on Facebook, multiplying their actions by the average of 150 connections per fan now gives her instantaneous, powerful and unbiased word-of-mouth advertising to 3,750 people. Eliza Metz applies her life’s passion to leading a massive tribe of yarncrafting fanatics who follow her on her blog, on Plurk, on Facebook and on her podcast. She has earned the trust of its members, who have elevated her to a position of leadership. As a result, when she says she likes something, they listen and move, which translates to sales immediately. Eliza has never bought one piece of advertising; instead, she leads. Your passion for your business is your license to lead. But you can’t just log in, plant your flag and begin selling your products or services. The tribe will banish you right away. The fundamentals of trustcasting prevail in every facet of business growth, and this is no different in leading tribes. In part two of this series, we’ll go beyond the foundational understanding of tribes and cover the steps to identifying, becoming a member of and leading the tribes that are relevant to your business and your bottom line in today’s marketplace.

---

Six Lessons from the Retail Sales Floor for Delivering Superior Customer Service

Take a moment to reflect on the last time you visited one of your favorite retailers. Did you encounter a friendly, outgoing salesperson? Did he or she help you find exactly what you were looking for by taking the time to get to know you and really understand your needs? If you answered yes to those questions, then you were on the receiving end of excellent customer service. Notice that I didn't ask if you found a good bargain or if you had the chance to negotiate a more favorable price. Providing good customer service means making an authentic connection; it doesn't mean simply reaching an agreeable price, closing the sale and saying goodbye. As one charged with growing and marketing your business, it's your job to ensure that you and every single person you put on the front lines bring authenticity and enthusiasm to every interaction with a customer or prospect. Whether you have a staff of five or 500, the last thing you want is a customer who feels like they and their hard-earned dollars are under-appreciated. I can’t even count the number of times I've come across a customer service rep who sounds bored and apathetic. This not only makes me want to conclude my frustrating encounter with this person as quickly as possible, but it also leaves me with a sour taste in my mouth about the company as a whole, making me highly disinclined to do business with them again in the future. And if I walk away feeling this way as a result of this rep’s apathy, inevitably there will be hundreds or even thousands of others who share my sentiment. Leave enough customers feeling alienated, and eventually you will have the undoing of even the largest, seemingly most untouchable corporation. Through their actions and their attitudes, your customer service representatives and salespeople can make or break the reputation of your brand and, by extension, the health of your bottom line. From my experience as the operations manager for a large retailer, I know first-hand what it takes to deliver world-class customer service. Here are six best practices from the retail sales floor that you can apply in your organization to ensure that every encounter between your company and your customers and clients gets five stars for satisfaction.

1. Set the tone right from the start.

Rule number one of working the sales floor is to greet your customer as soon as they walk in the door to make them feel acknowledged and to let them know that you are at the ready to serve their needs. Whether you’re meeting with your client in person or by phone or even via web conference, set a positive tone right from the start by warmly welcoming them and breaking the ice. And don’t feel compelled to get straight down to business. Beginning the conversation with a bit of casual, non-work-related talk will establish an emotional connection and let them know that you see them as a person first and customer second.

2. Establish the need.

In the store, the first question out of my mouth after greeting the customer is, "What's the occasion that brings you in?" This gives him the opportunity to tell me a little bit about himself and what he’s looking to accomplish from his visit. The same applies to your initial encounter with a new prospect. As soon as you’ve established a comfortable rapport, it’s time to start asking questions that will help you gain a better understanding of their needs and goals. And, remember, while they may have come to you seeking help with a specific problem, if you’re a savvy conversationalist, you may be able to uncover a broader concern or objective that you can partner with them to solve. That’s why it’s important to make sure you pose insightful questions that will paint the full picture of who this person is, what their experience has been to date and how you can play a role in helping them advance their goals.

3. Listen. No – really listen.

In the retail setting, one of the best things you can hope for as a salesperson is a chatty customer. The more information they volunteer, the easier it is for us to provide helpful recommendations. For example, a woman in her 20s walks through the door and mentions that she’s looking for a cocktail dress, so you offer a few nice selections that fit the bill. But after a few minutes pass and some pleasant conversation ensues, she reveals that the dress is actually for her cousin’s wedding. A mediocre salesperson says, “Oh, that’s nice!” and returns to folding shirts. But for the savvy salesperson who really hears what that customer is saying, the wheels of good service are set in motion. Because, of course, a wedding is never just a wedding. It’s merely the highlight of a full weekend of events that include at minimum a bachelorette party and a rehearsal dinner as well as perhaps a girls’ spa day and a day-after brunch. All of those occasions require a specific type of attire, which opens the door to an array of additional wardrobe needs that you might be able to help her with. And, hey – we get it. Between asking the right questions, keeping the conversation flowing and formulating your recommendations, it’s all too easy not to fully absorb everything your client is saying. But the worst possible mistake we can make as business owners, managers, marketers and salespeople is not really listening to our customers. Every word out of their mouth is a little clue – a piece of the puzzle that comes together to reveal what it is they really want. Don’t be too quick to dismiss what may seem on the surface like irrelevant details. Even if they're telling you about their children, their cat Whiskers or even their favorite Madonna song, listen and retain as much as you can. Bring along an associate, if needed. Make it their job to record everything that’s happening as it’s happening. Assimilating all of these finer points into a cohesive whole is what's going to help you establish a deeper connection with that client that will improve your chances not only of securing the sale at hand but also of cultivating a fruitful long-term, mutually beneficial partnership.

4. Be proactive but not pushy.

In a retail store, any salesperson worth their salt would never just point a customer vaguely in the direction of what they’re looking for and then leave them to their own devices to find it. Rather, they’d walk them over to the appropriate section of the store, help them pull the correct size, advise on proper fit, suggest alternative options or complementary accessories, etc. In the corporate setting, this translates to staying sharp, thinking on your feet and being a problem-solver. If you’ve covered the bases in eliciting good insights from your client – both in terms of their explicit needs and those they may not even be fully aware of themselves – now is the time for you to step up to the plate and swing for the fences. Let your expertise and your passion for what you do shine through as you offer intelligent and thoughtful recommendations, making sure always to frame your presentation directly in terms of how what you’re offering benefits your client. Put yourself on their side of the table, and let them know that you’re here as a partner in their success, not just someone looking to seal the deal. And on that note, every good salesperson knows how to read the room. If your client shows signs of being uncomfortable or overwhelmed, slow down and back up. You never want them to feel as though you are forcing something on them that they don’t want or need. The cliché of the pushy salesperson is a cliché for a reason.

5. Make the sale that makes sense.

Is there anything worse than walking down a mall corridor and being assaulted from every angle by the employees of those stand-alone kiosks who are trying to lure you over to see their wares? If you were interested in their products, you’d make a point to visit them of your own volition, right? Also, what’s with the aggressive heckling? Has that ever really worked? By contrast, when a customer comes into our store, we make recommendations based on what makes sense for their lifestyle and their needs, not what will fulfill our sales quota for the day. Many of them actually thank us for taking the time to show them products that are genuinely a good fit. When you present your client with a service or product that clearly clicks with them, they'll give you as much time as you need to explain the benefits. Better yet, if you can catch them by surprise with an unexpectedly innovative solution to their needs, they’ll be grateful for your insight and excited to move forward. Worst-case scenario? They’ll say no in the moment, but even then, if you’ve done the job well, given time to reflect and reconsider, they might ring you up again in the future. A word of caution, while you want to hear the cash register ring as much and as often as possible (or to see the signature on the dotted line, as it were), selling your products or services to a customer when you know they’re not actually a good fit for their specific needs is like playing Russian roulette. If the product isn’t really the right solution, your customer is going to be unhappy, and they’re going to point the finger at you. They’ll either assume that your product is subpar or, far worse, that your company is dishonest in its claims. That is one sale that will end up costing your company and your brand’s reputation dearly, as they complain vociferously to anyone who will listen.

6. Commit beyond the sale.

I'm not asking that you wine and dine your client every Friday night, unless you actually want to – in which case, I’m not hating. What I am asking, however, is that you dedicate yourself to ensuring their satisfaction. A smart salesperson recognizes that there’s no such thing as “closing.” After all, when a customer makes the choice to do business with you, you’re not closing anything. You’re only beginning the process of cultivating a relationship with someone whom you hope will be a lifelong client. For example, in my line of business I frequently work with clients who spend upwards of $1,000 or more with the company, and they sign contracts that span six months or longer. When someone is spending that kind of money and time with me, I want to make sure they feel comfortable and informed at every step along the way until our obligation has been fulfilled to their greatest satisfaction. Think of every interaction you have as an opportunity to cement your customer’s continued loyalty. Pay attention, nurture the relationship and earn the right to continue serving that customer’s needs. Don’t simply meet their expectations; exceed them at every turn.

Are you sold yet?

So as you can see, whether it’s on the retail sales floor or in a corporate boardroom, the basic principles of superior customer service are universal. By translating these six best practices to the specific products or services that your company offers, you’ll inevitably reap the benefits of customer relationships that are defined by authenticity, enthusiasm and a deep level of engagement. After all, traditional word-of-mouth isn't dead; today’s savvy customers just demand that you work a lot harder to earn it.

---