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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Great Content, No Readers: How to Solve Your Subscriber Problem

Hybrid or Hummer: What kind of mileage is your content getting?

Previously, we established that content is the gasoline in your business growth engine. But your job doesn't end when you hit "publish." Promoting your content is just as important as creating it. If content is the gasoline in your business growth engine, then promotion is the difference between putting that gasoline in a Prius versus a Hummer. Even the most value-packed content can’t help your business grow if no one is reading it. For your content to deliver results, you must actively engage in bringing new people to your site.

Here are 12 tried-and-true tactics to boost your readership and maximize the mileage you’re getting from the resources you’re investing in creating great content.

Be a citizen of the web marketing universe.

No website or blog starts out with its own built-in community. However, established communities do exist everywhere around the Web. Identify the ones where the types of people who would be interested in the topics you write about are already hanging out, reading and making connections. Join in the dialog there by commenting on blog posts or participating in discussion forums. Don’t be a shameless self-promoter. Focus instead on adding value to the conversation. If you do a good job, people will be naturally curious to learn more about you, and they’ll seek out your site to see what else you have to say. Just make sure to include a link in your signature so they’ll know where to find you.

Don't beg for links; present win-win opportunities.

Once you’ve earned your stripes as a trusted and valued member of these communities, you can begin reaching out to the other blog owners that run in these circles for opportunities to gain exposure to their readers. But don’t just ask them to link to your site. After all, what do they stand to gain from giving you a link? Instead, frame your request so that it provides benefit to the person on the receiving end as well. For example, invite them to be featured in an interview on your site. Even the most successful and well-established bloggers are always looking for a little added exposure, and they’ll undoubtedly promote their appearance to their fans, too. Or ask if you can contribute a guest post to their site. Most bloggers will be relieved to have one less post to write, and you’ll get the chance to put your own original content in front of their readers, with the added benefit of a link in your bio.

Give links to get links.

When you’re composing your posts, there’s no need to pretend that you’re the one and only person who’s ever had anything of value to say on your chosen subject matter. Link to other articles and experts who’ve either offered great insights on that topic or taken an opposing point of view, if you want to refute their claims. When you publish your article, shoot the person whose blog you’ve linked to an email or a direct message on Twitter. It will definitely get you noticed and will more than likely get you either a retweet or a link in return.

Leverage the connections you already have.

Don’t assume that everyone who follows you on Facebook or Twitter also reads everything you post on your site. Every time you publish a new article, make sure you extend that content to Facebook, Twitter, LinkedIn and any other social media platforms where you are active. Instead of simply posting a link to your article, a great trick is to turn your headline into a question. Open-ended questions leave people craving an answer, which will prompt them to click through to satisfy their curiosity. If you’re using this tactic on Twitter, remember to keep your post to 120 characters or less (link included) in order to allow for retweets.

Extra! Extra! Let them read all about it.

Create a weekly or monthly email newsletter that’s a digest of your most recent posts. Enhance the value of this newsletter by incorporating a few bite-sized tips or links to other interesting articles from around the Web. You might be surprised at the number of new readers the “forward to a friend” button might bring you.

Don’t be shy.

Opportunities to subscribe to and share your content should be omnipresent. Put your email subscription offer either in the header or the sidebar of your site so that no one who visits can miss it. Add extra incentive to join your list by offering a freebie at sign-up, such as an e-book, checklist or audio download. Be sure to present the chance to subscribe to email updates at the end of every article as well. If the reader liked what they read, that’s the best time to get them to sign on.

Give them options – lots of options.

Email addresses are pure marketing gold, but don't be so laser-focused on building your list that you only offer email updates. Let your readers consume your content in the way they most prefer, whether that’s by subscribing in an RSS reader, via StumbleUpon or through the social media channels where you post links to your latest articles.

Be attentive to your readers.

When someone reaches out to you – whether by leaving a comment on an article, sending you a direct message on Twitter or dropping you an email – respond. Making them feel like a part of a community whose members are truly valued will motivate them to spread the word about you and encourage others to join the party.

Create content that sparks conversation.

The real holy grail of promotion is not generating two-way conversation between you and your readers. It's the multidimensional communication that occurs when your readers start interacting with each other as well. That's when suddenly you make the leap from publishing content to building community. The key lies in how you craft your content. While it's important to write with authority and demonstrate your expertise, don't make the presumption that you have the final say. One of your most important jobs as a creator and promoter of content is getting the ball rolling on conversation and debate. Ask for input and advice. Solicit dissenting opinions. Encourage your readers to share their own personal experiences that relate your topic. Great conversation is magnetic. It will keep your current readers coming back again and again, and draw new visitors in when they see the lively interactions that exists around your content.

Find the right balance.

Remember that you don't have to post every day or even every week if that's not realistic for you. It's better to find a comfortable rhythm that will allow you to maintain a steady pace of both creation and promotion. It’s better for someone to come to your site and see that you post one must-read article every month than to see unpredictable fits and starts of activity.

When you find something that works, stick with it.

In the game of promotion, there’s no magic formula for success. It may require a lot of trial and error before you find the right combination of tactics that work for your audience and your schedule. When you do uncover a particularly effective strategy, mine it for all it’s worth. If you write a guest post that gets a lot of attention, find out if there might be an opportunity for you to become a regular contributor on that site. If you get a significant proportion of traffic from one of the sites or forums where you’re a regular participant, by all means, keep it up. If you write a post that gets more traffic, more retweets or more comments than average, continue to develop other articles around that topic. When people tell you what they want, give it to them.

Slow and steady wins the race.

If this sounds like a lot of work, it is. Community building requires time, patience and persistence. There are plenty of articles out there with enticing headlines like “How I got 10,000 subscribers with one post!” This probably won’t happen for you. That doesn’t mean your efforts aren’t worthwhile. Don’t risk becoming a pariah by being overtly pushy and self-serving in your methods. Instead, tread carefully and treat everyone you encounter in the blogosphere – readers, commenters and fellow content creators alike – with respect. As always, follow the rules of trustcasting and allow your community to grow organically in breadth and depth as you cultivate your reputation as a credible and authoritative source of information. Over time, you’ll build a robust, thriving community of people who will not only consume your content voraciously but will ultimately become customers and evangelists for your brand.

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