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.

We the Media

Even before the first iPhone 4 left stores, and even as customers were enduring all manner of conditions while waiting in line for a chance to get their hands on Apple’s latest mobile phenomenon, the Web was already ablaze with reports about a possible design flaw in the wrap-around antenna that interferes with reception.

The story begins on the afternoon of June 23, when Fame Foundry started a discussion thread on the MacRumors community forum about a problem we encountered straight out of the box. Among the lucky 600,000 to successfully pre-order the highly sought-after device on June 15, we shot and posted this video to demonstrate the issue we had discovered:

In just over 24 hours since, the conversation in the discussion thread has continued across 46 pages, as other users have chimed in with their own theories, reviews, experiments and videos.

More significantly, the story of the apparent operating glitch has taken on a life of its own, leaping from the obscure fanboy territory of the MacRumors forum and ascending to the upper echelons of media.

The first to pick it up were tech blogs like Gizmodo, Mashable and Engadget. Soon after mainstream outlets including The Street, MSNBC and CNN followed suit. By the afternoon of June 24, Fame Foundry was fielding phone calls from reporters from national media organizations, all tracing back to the original YouTube video, which has received more than 400,000 views at the time of this posting.

The launch of the iPhone 4 has been a remarkable case study in the nature of today’s media and the ways and speed at which information spreads.

When photos and videos of a still-in-development iPhone 4 were published on Gizmodo, the story of how the device escaped the grasp of Apple’s famously impenetrable security and landed in the hands of a tech blogger became a much bigger story than the gadget’s shiny new design.

The launch of the iPhone 4 has been a remarkable case study in the nature of today’s media and the ways and speed at which information spreads.When the time arrived for the official announcement on June 7, Steve Jobs proved that the leaked photos had hardly stolen the device’s thunder, as he proudly introduced groundbreaking features such as video calling, 960-by-640 resolution display and high definition video recording. However, it is likewise worth noting that there were so many bloggers in attendance reporting live from the WWDC keynote event that a network overload brought Jobs’ product demonstration to a temporary standstill.

The hype surrounding iPhone 4 hit fever pitch on the first day of pre-orders. Apple racked up record-breaking sales, but this success story shared the headlines with the technical difficulties caused by the massive influx of traffic hitting their website, propelled largely by vocal frustrated customers who spent hours trying in vain to place their orders.

Returning to the events of the past two days, if a similar problem had occurred even just a few years ago, it would have taken much longer to come to light. In the absence of the instant connectivity of social media platforms and fan forums, users who encountered a reception issue might have assumed it was an isolated problem or that their particular device was defective, and Apple's customer service department would have been the only channel through which they could address their concerns.

By contrast, within hours of the first video being posted, there were legions of interconnected customers, bloggers and media outlets on the case, executing their own tests and drawing their own conclusions.

Interestingly, as of the time of this posting, the only response from Apple has come in an e-mail exchange between Steve Jobs and an iPhone 4 user (via MacRumors), in which Jobs describes the problem as a “Non issue. Just avoid holding it that way.”

Later, Jobs elaborated further on his position in a follow-up message:

Gripping any phone will result in some attenuation of its antenna performance, with certain places being worse than others depending on the placement of the antennas. This is a fact of life for every wireless phone. If you ever experience this on your iPhone 4, avoid gripping it in the lower left corner in a way that covers both sides of the black strip in the metal band, or simply use one of many available cases.

And so begins the next chapter in the iPhone 4 saga. Not surprisingly, this response is already showing up on blogs across the Internet, spreading just as quickly as the initial complaints.

Such is the nature of PR in today's 24-hour, on-demand information free-for-all. A single user-generated video becomes a viral sensation that far outshines the typical puff piece stories on how many people are eagerly waiting in line to buy the next great thing. Consumer backlash starts with a groundswell that becomes a tidal wave. A few brief sentences in an e-mail from one of the world’s most powerful CEOs stands in lieu of a carefully crafted press release as the company’s official statement. There is constant push and pull as corporate entities like Apple attempt to steer public sentiment in their favor – a delicate balancing act that requires juggling the mainstream press, the blogger nation and the average consumer with a Facebook or Twitter account.

As the course of events surrounding the iPhone 4 launch demonstrates, no one is safe when there is a potential reporter behind every keyboard and every camera phone – not even Apple with its notoriously loyal fan base.

More...

June 26

Test Shows iPhone Antenna Issue Impacts Voice Transmission Too [Gizmodo]

June 29

Leaked: Apple's Internal iPhone 4 Antenna Troubleshooting Procedures [Boy Genius Report]

June 30

First iPhone 4 Class Action Suit Filed Against Apple and AT&T [Gizmodo]

July 2

Letter from Apple Regarding iPhone 4 [Apple]

Apple "Stunned" to Find iPhones Show Too Many Bars [AP]

Class Action Lawyers Predictably Unimpressed with Apple's Statement [TechCrunch]

July 5

Apple Waiving 10% Restocking Fee for Returned iPhones [IntoMobile]

July 6

AppleCare: The iPhone Update Won't Solve the Antenna Problem [Gizmodo]

The iPhone is Ruining My Life! [Aol Small Business]

July 7

iPhone 4 Complaints Mounting: A Rocky Rollout [CIO]

iPhone 4: Officially a Hot Mess [Inc.]

July 12

Apple Deleting Mentions of Consumer Reports' iPhone 4 Piece on Forums, Can't Delete Your Thoughts [Engadget]

PR Experts: iPhone 4 Hardware Recall Is "Inevitable" [Cult of Mac]

July 13

iPhone Antenna Outcry Escalates with Recall Demand [MSNBC]

July 14

What Apple Must Do to Stop the Bleeding [Mashable]

Microsoft Exec Mocks iPhone 4, Dubs it Apple's Vista [Computerworld]

Video: Does iOS 4.1 Fix the iPhone 4's Death Grip Antenna Issue? [TechCrunch]

Every Week Apple Doesn't Act on iPhone 4 Antenna Could Cost $200M [AppleInsider]

Report: Apple Holding Friday Press Conference on iPhone 4 [PC Magazine]

July 15

Apple Engineer Told Jobs iPhone Antenna Might Cut Calls [Bloomberg]

New York Senator Charles Schumer Writes Open Letter to Steve Jobs [Boy Genius Report]

iPhone 4 Signal Issue Can Be Fixed With a Software Update? [MacRumors]

July 16

Live from Apple's iPhone 4 Phone Conference [Engadget]

Apple's "Antennagate" Mea Culpa – Free Case Until September 30 [ZDNet]

A Defiant Steve Jobs Confronts "Antennagate" [The Wall Street Journal]

Jobs Calls Bloomberg Antenna Article a "Total Crock" [MacNN]

July 17

Apple's Claims About Other Phones – There's a Response For That [The Wall Street Journal]

July 18

iPhone Defense Prompts New Debate [The Wall Street Journal]

July 19

"Antennagate" Reactions: RIM, Nokia, Taiwanese Animation [MacRumors]

HTC, Samsung Rebut Apple's Smartphone Claims [The Wall Street Journal]

Steve Jobs's Disastrous iPhone 4 Press Conference [Harvard Business Review]