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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Dos and Don'ts for a Successful Groupon Promotion

Do: Be aware that it’s not for everyone, and it may not be right for you.

With a subscriber base that has surpassed 85 million and shows no signs of slowing, the allure of Groupon is hard to resist. The basic premise seems fail-proof: create a discount offer that’s broadcast to thousands of potential new customers, sit back and watch the dollars roll in.

However, every business model is unique, and there are many variables that determine how well your company can respond to a sudden, short-term influx of traffic or a temporary drop in profit margin.

Running a promotion is particularly risky for companies in Groupon’s bread-and-butter categories like salons, spas and restaurants, where the frequency of offers dilutes their perceived value.

If your business falls into one of these categories, you must carefully weigh the chances of being able to convert first-timers into regular customers versus the likelihood that they’ll simply wait for the next Groupon to come along. If the odds don’t stack up in your favor, you may find that the sacrifices you must make to execute the promotion won’t ultimately deliver a long-term pay-off in the strength and size of your customer pool.

Don’t: Expect Groupon to boost your bottom line.

At least not right away. While there’s no upfront cost to run a promotion, Groupon requires you to discount your products or services by at least 50 percent, and they then typically take a cut of 50 percent of the final selling price, leaving you with only 25 percent of your normal revenue. While you’ll undoubtedly see a major bump in traffic, your margins on that traffic will be slim, if they exist at all.

Playing the Groupon game is less about building profit and more about gaining mass exposure.

Do: Crunch the numbers.

When deciding whether or not Groupon a good fit, you must weigh the ROI of your promotion according to the same metrics as you would any other marketing tactic.

Examine every scenario to determine what your promotion will ultimately cost. What if 100 people jump on your deal? What if it’s more like 1,000 or 10,000? Can the potential benefits justify that level of investment? Or would your money be better spent elsewhere, such as a pay-per-click advertising campaign?

Do: Be strategic in your offer.

If you do decide that Groupon is a good fit for your business, make sure to structure your promotion so that it’s a win for you and your new customers.

Be creative and find a way to build an offer that minimizes the losses you must absorb and maximizes your ability to fulfill a short-term spike in demand. Focus on the products or services where your overhead is lowest and your profit margin is highest.

For example, let’s say you’re a personal trainer. If you offer a Groupon discount on your consultation services, you’re limiting the number of hours you have available to clients who are willing to pay your regular rate. However, let’s say you’re a personal trainer who also sells subscriptions to an online video coaching series. You can absorb an almost unlimited amount of cut-rate subscriptions without compromising your primary revenue stream.

Or, let’s say you run a beachside bed and breakfast. Executing your promotion in the off-season is a great way to reel in new visitors. If your doors are open, your operating expenses are fixed. In terms of defraying those costs, it’s better to be filled to capacity at 25 percent of your standard rate than to have only one or two guests at full price.

Don’t: Be afraid to negotiate.

A lesser-known secret of playing the Groupon game is that you can negotiate. When it comes to shaping your promotion, nothing is written in stone.

You can score a more favorable split on the take than 50/50. You can also cap how many discounts are available, which is a good way to safeguard your bottom line and make sure you don’t end up with more business than you can reasonably handle.

Groupon’s entire business model revolves around presenting great deals that people want to buy, so if you’ve got a good one, make them play ball. If they won’t agree to terms that work for you, either try another daily deals site, or pursue a different marketing strategy entirely. No amount of exposure is worth an arrangement that could potentially sink your business.

Do: Pay attention to the fine print.

Terms and restrictions can make or break your deal. Use the fine print to make sure your offer is one that your business can sustain.

Set an expiration date. Cite whether the offer includes tax and gratuity. Specify whether customers need to make an appointment or reservation in advance to use their Groupon. Determine which products or locations the Groupon applies to. Define whether the Groupon can be used in conjunction with other offers or specials. Limit how many offers can be used per customer and per visit.

Just be careful not to make the terms so restrictive that the promotion loses all value to your potential customers, or your Groupon will be a flop.

Do: Put your best foot forward.

When your Groupon lands in the inboxes of subscribers in your area, you’ll inevitably have an influx of potential new customers checking out your website, your Facebook page and your Twitter feed to find out more about you.

Make sure that your website is up to date and that it showcases the products or services being featured in your promotion in such a way that makes the decision to buy an easy one.

Make sure as well that your Facebook and Twitter streams are primed with interesting content and lively dialogue to boost your chances of scoring a like or a follow from these new visitors.

If you don’t have these critical elements in place before your Groupon hits, you won’t be making the most of the opportunity you have to be in front of hundreds or thousands of people who are in the market for what you have to offer.

Do: Understand that these are Groupon’s customers, not yours.

Due to privacy laws, Groupon cannot share the email addresses or personal information of those who have bought into your deal. So while you’ve gotten great exposure to these potential new customers, you have no built-in way to make a repeat appearance in their inbox.

Make sure that when these shoppers visit your website or come into your store, they have the opportunity (and incentive) to join your mailing list. If you don’t already have a list, now is the time to start building one.

Do: Bring your A-game.

The true value of a Groupon promotion isn’t getting a tidal wave of people through your doors. It’s the opportunity to convert those one-time deal-seekers into loyal customers and fans.

In order to do that, you must wow them. They may come in looking for a bargain, but if what they find is exceptional quality, value and customer service that go above and beyond their expectations, they’ll not only be more likely to come back and pay full price but also to spread the word about you as well.

Do: Make sure everyone’s on the same page.

One sure-fire way to guarantee that your Groupon customer will never come back is to make the process of redeeming their offer a hassle.

Hold special meetings or training sessions if necessary to make sure that everyone who’s on the front lines of your business understands the terms of the offer and how to handle any questions or complaints.

This is also a good opportunity to review your customer service standards and reinforce your expectations to ensure that everyone is prepared to do whatever’s necessary to convert, convert, convert.

Don’t: Alienate your loyal customers.

You know the old saying about new friends and old friends – one is silver and the other is gold. The same applies to customers.

In your efforts to bring new customers in the door, be mindful not to alienate those who’ve been happily paying full price all along.

If you’re going to Groupon, it’s an opportune time to simultaneously execute a customer appreciation promotion to reward these customers for their loyalty and show them that their business is always valued.

Don’t: Mistake Groupon for a marketing plan.

Let’s say you run your first Groupon promotion.Groupon is no substitute for a sustainable, long-term business growth plan. You get a huge response, so you stock up and staff up to meet the demand. The wave comes; the wave goes. Suddenly you’ve got a bunch of employees standing around staring at each other and more inventory than you know what to do with.

While running another promotion seems like the obvious solution to this problem, it’s no substitute for a sustainable, long-term, diversified growth and marketing plan.

You must realize that creating one Groupon offer after another will train old and new customers alike to expect never to pay full price and will ultimately devalue your products and services. You’ll end up caught in a cycle of dependency on discount shoppers and razor-thin margins that will make it next to impossible to ever actually grow your business. And isn’t that the point of running a Groupon to begin with?

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Requiem for the Flash Intro: Seven Dying Trends in Website Design

Thanks to the now ubiquitous #TBT (that’s “throwback Thursday” for those of you who don’t speak hashtag), every week we’re all treated to a cringe-inducing trip down memory lane that takes us on a tour of our most regrettable fashion choices, whether it’s the bad perms and acid-washed jeans we sported in the 80s, the grunge-era plaid shirts and Doc Martens of the 90s or the velour sweatsuits and Carrie Bradshaw-inspired nameplate necklaces we left behind in the early aughts. Just as in fashion, website design trends come and go. What’s popular one day is old news the next. And just as you wouldn’t wear shoulder pads and stirrup pants to a sales meeting, you don’t want your website to be an embarrassing amalgamation of passé design trends. After all, if your website looks dated, it won’t inspire confidence among prospective customers that you’re on top of your game – no matter what game it is that you’re playing. Here are seven once-popular design trends that are fading fast – and that you should purge from your website as soon as you can:

1. Flash intros

Once upon a time, everybody and their brother wanted a Flash intro to create a memorable first impression. These days, though, having a Flash intro is a recipe for disaster. First, in today’s era of mobile surfing, speed and simplicity win the day. Keep in mind, too, that Flash and iOS do not mix, so your site won’t even be accessible to users on Apple gadgets. Also, today’s visitor demands more control and fewer bells and whistles that only serve as obstacles to accomplishing their end goal.

2. Pop-over windows

As site owners became increasingly eager to turn their web presence into full-blown conversion engines, the pop-over window rose to popularity. As soon as a new visitor lands on the site, BAM! they are greeted with a request to complete a form to provide their contact information in exchange for a welcome discount offer or to follow the company on Facebook for future updates and promotions, thus giving the company all the ammunition they need to continue their engagement long after that visitor has moved on to other corners of the Web. But while these pop-overs are good for site owners (at least in theory), they are very disruptive for the user and provide roadblocks that only make it more difficult for them to accomplish what they originally came to the site to do. As a result, any value that might be gained in collecting the user’s data is quickly negated if that user has no interest in continuing their as a result of this negative first encounter. Thankfully, good UX is winning this battle, and the pop-over is falling quickly out of favor. Reality has set in that no one comes to a site for the express purpose of helping the site’s owner market to them, so it’s hardly the best way to lay a foundation for a successful long-term relationship. Instead of leading off the conversation with your survey request, Facebook follow prompt or current promotion, simply allow your visitors to dive right into the site to find the information they’re seeking or complete their desired task. Keep your mailing list sign-up and Facebook links in your site’s universal framework, and if you do your job in creating a positive experience for them, your visitors will willingly allow you to become a presence in their email inbox or their Facebook news feed all on their own. Read more: Deal-Breakers and Dead-Ends: Six Turn-Offs That Alienate Website Visitors

3. Animated billboards

Oversized, rotating slideshows have become a common fixture on home pages in recent years, largely because they provide a way to present several key messages to the visitor without requiring them to scroll or to click past the initial page. However, UX tests show that these animated presentations are not as effective as we’d like to think. While the initial message in the carousel often prompts a click, the effectiveness of subsequent messages in the loop drops dramatically because many users do not stick around to see all of the slides. Other users ignore these animated areas completely, perceiving them as banner advertisements that should be glossed over in search of more meaningful content. The billboard remains a popular design feature; however, the trend is growing toward featuring a singular strong message in this area combined with a striking visual image. Streamlining and simplifying allows this one key idea to come across loud and clear rather than being lost among a muddled array of messages that are presented indiscriminately in the hopes that one will result in the desired outcome.

4. Information overload

Continuing with the theme of reductionism, today’s most successful websites pare down the information presented on the home page in order to create a cleaner, more focused presentation. This is in stark contrast to the approach that many sites took for years, which was to stuff the home page with as much information as possible in the hopes that visitors would find whatever they might be looking for on that page without having to dig any deeper. The result is a page that is utterly lacking in direction; nothing is emphasized because everything is emphasized. In the end, instead of being guided intuitively toward the information they seek, users are driven away by an overwhelming mess of content that is not properly organized and prioritized. To avoid this pitfall, focus on only the most important information for visitors while providing easy pathways, such as search tools and user-friendly site navigation, to help them find the content that lies deeper in the site. This approach will ultimately yield a better experience for your users and therefore better results for your company.

5. Drop-down menus

For years, the drop-down menu has been the go-to solution for streamlining a site’s primary navigation options while providing easy access to secondary pages. But with the advent of touch-based devices, which do not have a hover state, drop-down menus no longer serve the needs of all users. The simple fact of the matter is that with the rapid growth of mobile Web use, you simply can’t afford to risk leaving these visitors stranded with no way to delve beyond your site’s home page. Instead, a better solution for modern websites is to feature secondary page navigation options along the top or side of the page within the relevant section of the primary navigation. Read more: 3 Simple Rules for Navigation That Will Boost Your Website’s Performance

6. Contact forms

The contact form has long been a staple of websites – so much so that it’s often used in place of providing other means of contacting a company, such as a phone number or email address. However, more and more, site owners are choosing to eliminate this form altogether in an effort to provide a more personal, service-driven experience. Instead of having a visitor’s first interaction with their company occur via a cold, faceless web form that goes to an anonymous recipient and assures no timeline for response, the company elects to provide only their phone number so that the customer’s needs can be addressed immediately and directly by a live human being. While contact forms are not likely to disappear completely anytime soon, what is going away is the practice of relying on these forms as the sole vehicle for communication with customers and prospects.

7. Third-person narratives

Your website should embody the voice and personality of your brand. As such, it simply makes no sense for the content to be written from a third-person perspective, as if it’s being read to the user by a distant omniscient narrator. Instead, writing in the first-person creates a softer, more approachable tone that puts a human face on your company. It’s the difference between saying, “At Sanford & Son Remodeling, their goal is to ensure your satisfaction.” and “At Sanford & Son Remodeling, our goal is to ensure your satisfaction.” Which one feels more authentic? More warm and personable?

Beyond keeping up with the Jonses

Remember: keeping pace with the latest trends in website design is more than skin-deep. It’s not about having more bells and whistles than your competition; it’s about providing the best experience for all users, no matter how or where they’re accessing your site. By staying ahead of the curve, you’ll ensure that your site continually evolves to meet the needs and expectations of users who are constantly adapting to new devices and technologies.

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