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.

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.