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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The Five Types of Brand Evangelists

There’s no more valuable asset to the growth of your business than your brand evangelists.In today's culture of the Web, there’s no more powerful form of marketing than word of mouth. As a result, there’s no more valuable asset to the growth of your business than loyal customers who talk about you, sing your praises and disseminate your content through their networks. If you want to set the word of mouth around your brand on fire, you must identify the core motivations within your fans that spur them to action and give them ways to carry your torch that cater to their passions and personalities. Below we’ve profiled the five types of brand evangelists, what drives them and how to put them to work for you:

The Opinionater

The Opinionater wants to be heard. They have opinions about everything, and they want to share them with whomever will listen. They are the bloggers, the commenters, the reviewers, the frequent tweeters and Facebook status updaters.

How to put The Opinionater to work for you:

The most basic level of engaging The Opinionater is providing outlets for them to express their ideas and insights. Let them review your products or services on your website. Share interesting, original content regularly on your blog, Facebook and Twitter, and allow them to comment and debate. However, if you really want to make the most of The Opinionater’s potential as an evangelist, you have to go further. Social media has stripped away the barriers between customers and customers, so put this to your advantage by soliciting The Opinionater’s input on what they like, what they don’t like and what they want to see more of. Starbucks does this in a very sophisticated way on their “My Starbucks Idea” website, where fans can submit suggestions and requests for everything from drinks and merchandise to community involvement. However, you can achieve the same outcome in a less structured fashion simply by asking your followers on Facebook and Twitter for their opinions. To keep the The Opinionater loyal to your cause, it’s important to reassure them that these ideas are being heard. Respond to their comments, recognize their great ideas publicly and let them see their suggestions in action. They’ll feel invested in helping you because they’ll feel like they are a part of your success. If they feel like no one’s listening, you’ll not only risk alienating them, but you might find that suddenly you've got a very vocal critic on your hands.

The Informer

The Informer likes to be first in the know so they can be the one to spread the news. You know them as the email forwarders and the Facebook friends who are always sharing links to articles and videos. It’s important to The Informer to get credit for being ahead of the pack. In being the first to disseminate information within their network, they’re able to take ownership of the ideas being presented as if they were their own.

How to put The Informer to work for you:

Give them access to exclusive information that makes them feel like an insider. The Informer loves to join mailing lists, so be sure to offer an email opt-in on your website and send out regular newsletters with timely news, tips and offers. Let The Informer have the inside scoop on trends and sales, and you’ll set their forwarding fingers in motion.

The Fame Seeker

The Fame Seeker is driven by the allure of attention. They crave the spotlight and want to be celebrities within their own circles. They want to achieve their 15 minutes of notoriety in as many places around the Web as possible. They want to be the first to comment, or at least the one with the wittiest contribution that gets the greatest response. They want to see their name and their photo anywhere and everywhere they can get it, and they have profiles on multiple social media platforms.

How to put The Fame Seeker to work for you:

Recognition is the name of the game. Give them ways to participate in your community that are all about them, and then reward them for their participation. Call them out from the crowd, and you'll have a fan for life. NASCAR driver Ryan Newman’s Fan Club site is built around keeping The Fame Seeker engaged and active. Every member has the ability to share what’s most important to them – their photos, their videos and their opinions. Popular content is rewarded with points from other members, and the top points earners are elevated to a place of special prominence within the site on the fan club leaderboard.

The Trendsetter

The Trendsetter is constantly on high alert for what’s new and what’s coming next. They have a reputation within their circles as the one that’s always sporting the latest and greatest iteration of their obsession, whether it’s coffee, shoes, jeans, gadgets or cars. As a result, when they buy what you sell, it puts you immediately at the forefront of the tribe they belong to.

How to put The Trendsetter to work for you:

The task of putting The Trendsetter to work starts at the very core of your brand. You must position yourself as a company that’s always ahead of the curve. You must offer something genuinely special and unique to entice The Trendsetter to become your standard-bearer. Apple is the epitome of a brand that is in touch with The Trendsetter. Every new product they bring to the market is not only technologically innovative but impeccably designed. The iPad is a status symbol just as much as it’s a useful productivity tool. But you don’t have to compete on the same level as Apple to win over The Trendsetter. What you must do is earn a place in, listen to and respond to your tribe. When you can give them something that no one else in your niche can, it puts you on The Trendsetter’s radar. For example, let’s say you own a restaurant. What’s hot in the culinary world right now? The slow food movement. Create a special section of your menu dedicated to dishes made from seasonal ingredients sourced from local growers, and yours will be the restaurant that Trendsetter foodies all over town are suddenly talking about.

The Crusader

The Crusader is the torchbearer for the causes they believe in, and their loyalty runs deep because their passion is for the mission. They’re not interested in being seen wearing or carrying the trendiest label. They’re consumers with a social conscience that identify themselves with brand whose values and corporate culture inspire them.

How to put The Crusader to work for you:

Make them one of you. Give them a badge to wear that proclaims their belief in your cause. Arm them with information, tools and resources to be your advocate and help spread the word about what you stand for. TOMS is a brand of shoes with a simple mission: for every pair of shoes their customers buy, they donate a new pair of shoes to a child in need. On April 5, TOMS is sponsoring an awareness campaign called “One Day Without Shoes,” and they’ve enlisted their Facebook fans in the cause by creating an app that lets them share what they’ll be doing “without shoes” on April 5 and encouraging them to go “virtually barefoot” by using the campaign’s logo as their profile picture.

It’s time to hand over the megaphones.

Thanks to the evolution of social media and the culture of the Web, word of mouth is no longer an invisible phenomenon but a very public and powerful reality of today’s marketing. No matter the size of your company or the nature of what you sell, you have a powerful sales and marketing force in your customers, fans and followers. These loyalists are at your fingertips, ready and waiting to spring into action. All you have to do is provide the right tools and the right platforms, and you’ll reap the rewards of the trust they build on your behalf.

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Don't Call It a Comeback: Why Email Marketing Still Matters

"The reports of my death have been greatly exaggerated." – Mark Twain

There's been some chatter around the Web in recent years about the looming death of email at the hands of social media.

Scandalous as it sounds, though, many of us wouldn't mind seeing our bulging inboxes go away. The Telegraph recently highlighted a study connecting email to stress at work. Not surprisingly, participant stress levels spiked at points in the day when inboxes were fullest. Shocking revelation, right?

But whether the thought of email extinction unsettles or elates you, a closer look at its role in our work and lives reveals that the reports of email's death are greatly exaggerated.

State of the union email address

Social media may be doing the heavy lifting when it comes to sharing our lives, but email remains a valued, private and protected channel for conducting life and business online.

We use email to keep up with the brands, organizations and communities we care about through e-newsletters, news alerts, daily deals, group activity digests, etc.

We use it to conduct business online, such as registration for services, support requests, banking e-statements and payment confirmations. You can even get receipts emailed to you from the registers of many brick-and-mortar retailers now.

Ironically, even social media is using email to keep us engaged. How often do you receive notifications from Facebook, Twitter, LinkedIn and the lot about new followers, daily/weekly activity digests, new comments on conversations and suggestions for new connections?

Marketer's know the inbox is alive and well, and they're still pumping out white papers and webinars about email marketing. Email service providers like Constant Contact and MailChimp—and a half-dozen others—are still thriving.

Email still matters because it is so closely connected to our identities and our lives. It's less transient than social media. People delete their accounts—ask Facebook after a privacy policy change. Social sites rise and fall in popularity—last year it was Pinterest, this year Instagram. Some professionals hardly check their LinkedIn accounts. But nearly everyone online has an email account that they check regularly and some of us have had a particular address for 10, 15, and nearly 20 years.

So if email is closely connected to who we are as people, it's important that we as business growers frame email marketing efforts in this light. Forget open rates, click throughs, bounce rates, etc. for just a moment and let's focus on three keys to connecting with customers in their inboxes.

Key #1: Relationship

By signing up to receive your emails, customers are inviting you into their inbox—a personal space. They "opt-in" in faith that you will deliver value and not abuse the privilege.

This transaction of trust is as important as the ones involving money. Your email recipients are in fact customers even if they've never spent a penny on your products or services. They are paying for your email content with their time and attention.

Unfortunately, many businesses today don't understand (or ignore) this relationship dynamic and treat email like direct mail, using "spray and pray" tactics—"I've got a message to get out and a database full of email addresses. Let's do this!"

If you "e-blast" your customers, by the way, you may be guilty of this kind of marketing terrorism.

As customers welcome you into their inboxes, treat them with respect. Give them value. Be a guest they'll want to come back again and again. Essentially, don't be self-centered or rude.

Ultimately, the key to building relationships with your customers through email is the Golden Rule.  Email as you would want to be emailed.

Key #2: Content

Email marketing is content marketing ...  And the first key to great email content is to give subscribers what they want.

Give 'em what they want

If you offer multiple email subscription options for your customers—for example deals, company news, e-newsletters, etc.—then honor their wishes. If all I want is deals, don't send me your press releases.

If you don't segment your email content like this and basically have one big mailing list, then it's important to actively get feedback from subscribers to determine what types of content they're interested in—and how often want to get it, but more on that later. Consider polling your list once or twice a year to see which features they like best. Or better yet, make your emails "reply-able" and end them with a question like "How can we improve the content of our emails for you?" This type of engagement with the reader make the email more of a two-way conversation.

To increase trust and interest earlier, at the email sign-up form, make it clear what customers will be getting by subscribing. The more clarity you provide the more comfortable and more emotionally invested they will be.

Be interesting

It may sound obvious, but make it a priority to have something interesting to say or share with subscribers. Give them a reason to keep reading.

NextDraft is an an email newsletter published daily by Dave Pell in which Dave simply currates news from all over the web and delivers "The day's most fascinating news" right to your inbox. His description of NextDraft is better than any I could offer:

Each morning I visit about fifty news sites and from that swirling nightmare of information quicksand, I pluck the top ten most fascinating items of the day, which I deliver with a fast, pithy wit that will make your inbox vibrate with delight...

Imagine this: You'll actually look forward to email again. It's totally free and almost no one ever unsubscribes. The subscription form is up there, just a few pixels away. Go ahead. Give your inbox some awesome.

Just as captivating as the 10 intriguing stories Dave highlights each day is the smart writing he uses to set up each story and string them all together.  Here's a sample:

Put a little art in their inbox

I always open emails from Berlin-based software firm 6Wunderkinder because they are the most beautifully designed ones in my inbox. Great design is core to the 6Wunderkinder brand and products, and this commitment carries over into their email, which always look great and announce something worth reading about. Here's a recent sample from my inbox:

You don't have to be a design firm or developer to put together attractive html-based emails. Most email services providers have templates with drag-and-drop customization. But ... HTML-based email can be a little tricky in the ways it's rendered by various email software, so if in doubt, it's probably better to get some professional help.

Customize content to show you care

A growing trend in the email marketing world is email personalization, serving up different types of content to customers based demographics like location, sex or age as well as cues from their interactions with the brand or where they are in the sales pipeline. Personalization increases the value of your emails by providing content that fits more closely with customers interests and other characteristics.

For example, IKEA is a global brand, so the emails I get from their loyalty program, IKEA Family, are specific to my local store in Charlotte—not Stockholm.  In the example below, they even offer a deal in collaboration with the local minor league baseball team, the Knights. And local store information—location, hours, and contact info—is included at the bottom.

While this level of personalization involves some pretty robust marketing software, businesses without such resources can still tailor messages to specific groups of readers by segmenting their email lists through criteria like geographic location. Additionally, the major email service providers do offer some basic tools for email personalization. Just remember that the goal of any customization is to deliver a better, more personalized email experience to your customers.

Key #3: Frequency

A recent marketing study conducted by The Economist Intelligence Unit and Lyris, asked participants, "In your opinion, what frustrates you most about companies’ use of online communications?" Eighty percent of respondents chose "Too many unwanted email messages," outpacing the second place option by more than thirty points.

Most of us have grown accustomed to the tidal wave of information that is social media, so we're used to ignoring a lot of it. But email has to be managed. We generally touch each piece of mail, much in the same way as postal mail for centuries past. So the motivation here is to send only enough mail to provide value to subscribers, without being associated with inbox burnout.

Research by Eloqua shows that a judicious frequency of emails sent isn't just good for the customer, it's good for campaign performance. In essence, it appears from the chart below that when it comes to getting customers to email marketing that gets results, less is more.

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