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 New Ice Age: Lessons Learned from the ALS Challenge for Achieving Viral Marketing Success

If you have been online in the past few weeks, you have undoubtedly come across the viral phenomenon that is the “Ice Bucket Challenge”. Videos of people dumping buckets of ice-cold water on themselves, recording the video and posting to social media, and then nominating others to do the same, has taken the Internet by storm. Anyone who refuses to accept the challenge is asked to make a donation to the ALS charity of their choice, and the viral sensation as a whole has also raised significant awareness for ALS, which is often called Lou Gehrig’s disease. Fire up your social media site of choice and you are bound to see video after video of your friends and contacts dousing themselves in ice-cold H20. Even if you are not a big social media user, you have likely seen information on this freezing cold phenomenon as news outlets have gleefully reported on, and posted videos of, celebrities from the worlds of sports, entertainment, business, and more participating in the fun. A recent video even had actor Vin Diesel nominate Russian president Vladimir Putin to take the challenge! It seems as if everyone has happily dumped a bucket of water on their head for charity and good fun. The success of this campaign, which has raised millions of dollars, as well as that aforementioned awareness, for the ALS Association, is an interesting case study in the concept of “viral marketing”. In this article, we will take a look at what this Ice Bucket Challenge can teach us about this type of potentially powerful marketing.

You never know what will go viral.

The concept of the Ice Bucket Challenge is pretty simple. You film yourself doing something silly (and somewhat uncomfortable) and you challenge others you know to do the same. Pretty straightforward – so what makes this such a craze? What does this campaign have that so many other campaigns that were hoping to “go viral” were missing? The truth may actually just be dumb luck, because the reality is that you never know what will find an audience and go viral. Many organizations that try to initiate a viral campaign try many different ideas hoping that they will strike gold with one. They do this because they know that even one viral sensation can be all they need to meet their goals, whether that goal is to raise awareness for a cause like the ALA Association is doing, or to just draw massive attention to a business or a product, similar to what Burger King did many years ago (and what they are trying to do again) with their Subservient Chicken campaign. Viral marketing is really a roll of the dice, but there are some things that can tip the odds in your favor. We can see some of these things at play here in the Ice Bucket Challenge, including the presence of celebrities.

Celebrities sell.

The Ice Bucket challenge has now been taken by celebrities including Bill Gates, Ben Affleck, Justin Timberlake, Dwayne “The Rock” Johnson, Jimmy Fallon, Oprah Winfrey, and Charlie Sheen (who mixed it up by dumping cold hard cash on his head instead of cold water – although he promised to donate all that cash to the ALS Association). The participation of celebrities, who then in turn nominate other celebrities, is absolutely one of the reasons why this Ice Bucket Challenge has blown up the way that it has. Their participation is what has driven news outlets to cover the videos, which prompts others to share those videos on social media. This in turn introduces the campaign to more people, who then do the challenge as well and nominate others. This is the very definition of “going viral”, and these celebs are helping to fuel that success! Compare the Ice Bucket Challenge to another “video for a good cause” from some years back – the Pink Glove Dance. Created by Providence St. Vincent Medical Center in Portland, Oregon, this video of medical staff dancing to raise awareness for breast cancer has been watched almost 14 million times on YouTube. That is amazing by any standard. If you asked any company if they would take 14 million views for one of their online videos and the answer, I am sure, would be a resounding “YES!”. Still, as popular as that video was, it pales in comparison to the reach that this Ice Bucket Challenge has found, largely because of that aforementioned celebrity involvement. So if celebrities can make your viral campaign, how do you go about getting them involved? Well, that’s the trick, you really can’t get them involved, it just has to happen! This is an important factor to realize, because if you are looking at the success of a viral campaign like the Ice Bucket Challenge and thinking, “How can we do something similar”, you need to realize that there is a “lightning in a bottle” aspect to what is happening here. You could do something identical and not find that audience that pushes it to this level. Yes, celebrities can make your viral campaign, but counting on them to participate is not a sound marketing strategy!

There is value in the ridiculous

One of the other factors that has contributed to the success of this campaign is the sheer ridiculousness of the act of dumping cold water on yourself. The Internet loves spectacle and the Ice Bucket Challenge delivers on that count! A successful viral campaign is often over the top and ridiculous. If you are considering trying you hand at a viral campaign, think outside the box and be willing to get a little crazy. When it comes to viral marketing, conservative rarely succeeds.

There is value in helping others.

Another factor helping fuel the success of the Ice Bucket challenge is that all of this silliness is for a great cause. While a viral campaign to promote a company or product may take off, one that is designed to help others has something that those others do not – good will. Doing good for others makes people feel good too. That is a powerful force that you can take advantage of if your viral campaign is for a good cause. With the Ice Bucket Challenge, many of the people who took the challenge also decided to donate to the cause. This combination of silliness and charity is something that has helped make this campaign what is has become.

Make it easy to participate.

Many viral campaigns require other people to get involved. The Ice Bucket Challenge has succeeded because so many people, celebs and normal folk alike, have recorded a video and posted it for the world to see. The key to this audience participation is making it easy to do! Take the example of the Pink Glove Dance again. After that initial video went viral, many other organizations recorded their own Pink Glove Dance videos, but none of them ever came close to matching the success of the original. One of the reasons is because there was not the massive flood of videos that we see happening with the Ice Bucket Challenge. This is absolutely because to the level of effort required to produce one of those dance videos, which includes a cast of dancers, music, editing, etc. Compare that to the Ice Bucket video, which only requires a cell phone camera and a bucket of ice water! By making it easy to join in the fun, the Ice Bucket Challenge has become the viral sensation that we see online now. If the success of your campaign requires others to get involved, make sure that the barrier to them doing so is as small as possible!

In summary

Viral marketing campaigns can raise incredible awareness for your organization, but there is never a guarantee that a campaign will achieve any kind of success, much less the massive reach that we are seeing with the Ice Bucket Challenge. Being willing to take a chance on a potentially viral idea is great and I encourage you to explore those ideas, but you also need to make sure that your entire online strategy does not center on a viral campaign. A well-rounded strategy that may include a viral campaign as one of the pieces, but which also embraces other initiatives as well (search engine ads, email marketing, content marketing/blogging, etc.) is how you will want to proceed. That way, if the viral campaign explodes, then you have the exposure you wanted, but if it fizzles, at least you have other initiatives working towards your online success.

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