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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Tribes in Today’s Marketing

What is a tribe?

Simply put, a tribe is a group of people that connect around a common goal. Tribes can exist anywhere and can be based upon any shared interest, no matter how specific. In fact, you are most likely a member of a tribe or even multiple tribes. You may even lead one. Behind every major movement and successful marketing engine there is a tribe. Behind every major movement and successful marketing engine there is a tribe. Barack Obama leads one in which he can raise millions of dollars in a single day. Steve Jobs leads a tribe comprised of a cult-like following of brand evangelists who hang on his every word during his two-hour product launch event and then go out and do Apple’s marketing for them. Tribes are not always large. Some don’t want to be big. In fact, many are exclusive. The common element around which most tribes form is actually quite narrowly-defined. These tribes are not just for golf, but for those afflicted with a natural slice in their swing; not just for personal finance, but for those obsessed with maximizing the energy efficiency of their homes; not just for shoes, but for those infatuated with handcrafted Italian leather stilettos. Balloon artists, amateur photographers, collectors of exotic southwestern jewelry, Ford Mustang enthusiasts, avid Mac users, city managers engaged in innovative economic development – all of these are tribes that gather. For their members, their interest is an intrinsic part of their identity, and their association with their peers is a point of pride. Anytime people make connections based on a shared passion, similarities in background or a common need for solutions to improve their lives, a tribe is born.

What’s changed

Tribes have always been around. Before the days of the Web, smartphones and Facebook, communities would form based on commonalities and gather face-to-face. Naturally, these tribes were geographically-based, and their numbers were fewer and limited to the most popular interests. Today’s tribes are different. The advent of the Information Age tore down geographical barriers by introducing platforms of persistent conversation and information sharing. Online message boards, which have been around for decades, overcame the limitations of locality and allowed for a tidal wave of tribes to be formed – not just big tribes, but ones that were small and highly specialized. People now had the tools they needed to find others with a shared passion and make an instant connection in the absence of physical proximity. As technology continued to evolve, the Web provided a more robust platform for these communities to take form. Smarter and more relevant searching allowed people to find outlets for their passions through 200 million websites. Website creation tools became more accessible, allowing those with limited technical know-how to create online hubs where their tribes could gather. Add to this new tools for scheduling, collaboration, coordination and real-time communication as well as wifi and the mobile Web, and you have fertile ground for tribes to flourish around any and every common goal and interest.

New types of tribes

In the past few years, the evolution of social media has allowed people to connect in ways that are not based solely on common interests but also on commonality in relationships and geography. When communities form around who their members are, where they live and how they relate to each other, a new dynamic is introduced. The tribe concept becomes even more powerful and pervasive as people forge ties around commonplace goals in their daily lives. For geographically-based tribes, the day-to-day problems of life – from finding the best deli in town to getting a recommendation for a good mechanic to obtaining a reference for a trustworthy electrician – are solved through the formation of tribes based on members’ inherent commonalities. Tribes can form around many different types of relationships. Whether it’s families bound together in a social network or colleagues that develop a web of connections on LinkedIn, the common thread that ties all these communities together is the relationship of their members to one another. in a world ruled by tribes, word-of-mouth is king Communication travels quickly through these organic networks, in most cases crossing over to other networks. Something as seemingly simple as a recommendation for TurboTax software during tax season spreads virally via word-of-mouth advertising from tribe to tribe, as members seek to solve problems in ways that enhance their own lives, the lives of others they care about and the environments in which they live. Thus, in a world ruled by tribes, word-of-mouth is king. Trust is not only essential; it is required.

The old system of marketing

Before the economy was overtaken by tribes of highly interconnected and informed consumers, success in marketing was achieved by the companies with the largest budgets and the greatest capacities to pummel the public into purchasing their brands. If you were selling a product 10 years ago, you would have run expensive advertising campaigns based on interruption, hitting the consumer over the head with your message as forcefully and as often as possible. The objectives driving this type of intellectual spamming were to raise brand awareness, create demand for more product, obtain wider distribution and ultimately apply those profits to more ads in order to fuel this vicious cycle. In what’s left of mass media, this wasteful practice still goes on. Arby’s invested more than $85 million interrupting everyone with an oven mitt to sell sandwiches. Progressive and Geico spend a fortune flashing their brands in any and all media and markets. Nike poured hundreds of millions into endorsements and marketing to sell more Tiger Woods-branded products simply because they could command higher prices. National brands aren’t the only ones guilty of still marketing by interruption and spamming. From law firms to home builders to car dealerships, local businesses in every town dump truckloads of money into carpet bombing the public with ads in local magazines, newspapers and television, shouting their claims that they’re the best, they’ve discounted everything yet again, they have too much inventory and everything must go.

Marketing in a tribe-driven world

Today, trust rules the marketplace. People have many more choices and much less time than ever before. As a result, they invest their time carefully in their passions, in the issues that count and in the things that make a difference in their lives. They have no use for or trust in traditional advertising. Instead, they belong to a tribe, and they follow the movement of its members and leaders. These tribes are formed and move with or without you. Today’s successful marketers bow to the tribe, reforming how they do business, how they develop products and how they grow accordingly. The power and influence you command through the trust you earn from the tribe is unrivaled by any form of advertising. Your membership in the tribe is earned through trust and trust alone. Trust gives you permission to talk about your ideas as well as what you are doing to improve the lives of its members. When you are active and demonstrate honest intentions and selfless motives, you are promoted by the tribe’s leaders. The power and influence you command through the trust you earn from the tribe is unrivaled by any form of advertising. In this way, the tribe is your marketplace.

Getting there

Many companies, particularly local businesses, have a hard time mapping the connection between tribes and their bottom line. In fact, most are challenged to identify where tribes exist or, if they must, start and lead a new tribe. The fact is, any successful act of business creates a solution for a problem or improves people’s lives in some way. Underneath that solution are people who are already talking about all the issues surrounding it every day. Your focus in growing your business should be to identify your tribe and lead it. Weber doesn’t just sell grills; they lead a tribe of grilling enthusiasts. Jeep doesn’t just sell cars and accessories; they lead a tribe of off-roading die-hards. Gary Vaynerchuk doesn’t just market wine; he leads a tribe of a million wine aficionados. Fame Foundry doesn’t just sell marketing and website design; they lead a tribe of entrepreneurs and decision-makers whose passions are focused on business growth. Your passion for your business is your license to lead. You don’t need to be a national brand to be a tribe leader. Your local dentist doesn’t just sell her services; she leads a local tribe of people that care about healthy teeth. She may have only 25 true fans, but when they tweet or post their endorsement for her practice on Facebook, multiplying their actions by the average of 150 connections per fan now gives her instantaneous, powerful and unbiased word-of-mouth advertising to 3,750 people. Eliza Metz applies her life’s passion to leading a massive tribe of yarncrafting fanatics who follow her on her blog, on Plurk, on Facebook and on her podcast. She has earned the trust of its members, who have elevated her to a position of leadership. As a result, when she says she likes something, they listen and move, which translates to sales immediately. Eliza has never bought one piece of advertising; instead, she leads. Your passion for your business is your license to lead. But you can’t just log in, plant your flag and begin selling your products or services. The tribe will banish you right away. The fundamentals of trustcasting prevail in every facet of business growth, and this is no different in leading tribes. In part two of this series, we’ll go beyond the foundational understanding of tribes and cover the steps to identifying, becoming a member of and leading the tribes that are relevant to your business and your bottom line in today’s marketplace.

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SEO 101: A Plain-English Primer

In today’s marketplace, when people have a question, want information or need to find a product or service, they don’t flip open the Yellow Pages. They don’t scour online directories. In May 2010, Americans conducted 15.9 billion searches*Instinctively, they turn to search engines like Google, Yahoo and Bing. As a result, these sites hold the keys to targeted encounters between you and prospects who are looking for a solution that you can provide. In May 2010, Americans conducted 15.9 billion searches* using the five major search engines. Of those, 63.7 percent were executed on Google sites, while Yahoo and MSN sites claimed 18.3 and 12.1 percent, respectively. That’s a tremendous pie, and you undoubtedly want a piece. Unlike in the days when the Yellow Pages ruled the world, you can’t buy your way to prominence on an organic search results page. Fortunately, you can take a proactive approach to determining where you land in the ranking for applicable product- or service-related keyword phrases through the practice of search engine optimization, known as SEO. Much is to be gained by appearing in the first few results of a search. Users want immediate answers and are not likely to wade through pages and pages of listings. Furthermore, because the major search engines have built their reputation on returning quality results, the higher your ranking, the more apt the consumer is to assume that your site will deliver the solutions they are looking for. Therefore, in the simplest form of the equation, a higher ranking equals greater probability of a user coming to your site, more prospects seeing what you have to offer and increased opportunities to convert visitors into customers. As a result, garnering a favorable position in the results for select search terms is one of the foundational aspects of effective marketing today.

What SEO is and what it is not

SEO is not a turn-key solution.Let’s be clear: SEO is not a turn-key solution. There’s no SEO magic dust that you can sprinkle over your site and instantly advance from page five to page one. The value of Google from the user’s perspective is the efficiency of entering search terms and receiving relevant and trustworthy results without having to sift through a sea of unpopular and unhelpful spammy sites. In fact, the major search engines are constantly advancing and sharpening their algorithms in order to ensure that they protect their stature as the gatekeepers of good information. What does this mean for you the business owner? Achieving the top spot does not come easily, and it takes an ongoing, dedicated investment of time and resources to work your way up through the rankings of a search. After all, if just anyone could fake their way to number one, Google would be worth nothing. Unfortunately, because of the growing importance of SEO, it has become a lucrative field for marketing agencies looking to make a quick buck. There’s a proliferation of snake-oil salespeople who would have you believe that SEO is a simple, one-time fix that will launch you to the top of the list and send your traffic numbers through the roof. This is for their benefit, not yours. As a result of the misinformation and half-truths preached by these shysters, it can be difficult to separate truth from fiction, both in terms of what it takes to improve your standing and what to expect once you do. SEO is a complex process, but you certainly don’t need to become an authority in the minutiae to grow your business successfully. However, you should have a foundational understanding in order to sort out the legitimate practices from those that will only waste your time and money.

The anatomy of a search engine

At a basic level, all search engines operate the same way. The Web encompasses billions of documents that are bound together through links. Search engines use these links to find and access individual web pages and files, using automated “spiders” to crawl and index the content contained therein. All of this information is stored in trillions of records that are tied to specific keywords or phrases. Therefore, when a user initiates a search, the engine doesn’t have to scan all of the many billions of web pages in existence. Instead, it must only access the particular record that holds the index of information pertaining to the terms entered, making it possible to retrieve vast amounts of data in mere fractions of a second. However, search engines do much more than pull back data and generate randomly ordered lists of links that are related to the terms entered in the query. Rather, the results are sorted and ranked based on importance, which is gauged according to relative popularity, following the assumption that a site or page is popular due to the quality of the information it contains. Therefore, the objective of SEO is not only to ensure that the major search engines identify your website content as being relevant to the keywords that pertain to your products or services but also to increase the perceived importance of that content.

Turning the tables on search

You are undoubtedly very familiar with the mechanics of using a search engine. These days, online search is as deeply ingrained in our daily lives as eating or sleeping. However, as one who is charged with growing a business, it is a useful exercise to take a step back and seriously reconsider the search process, looking at it through the eyes of a prospective customer. Sure, it’s possible that a user might search for your business by name – “Sally’s Bakery,” for example. It’s easy to land at the top of those results. However, in that case, the searcher essentially knew what they’re looking for already, perhaps because they are a returning customer, they’ve seen your sign while driving down the road or they’ve been referred by another customer. The brass ring of SEO is capturing organic traffic – prospects that may never even have heard of you before.These types of visitors are good, but they aren’t necessarily the primary target of your SEO efforts. Instead, the brass ring of SEO is capturing organic traffic – prospects that may never even have heard of you before. These are users that are searching with more generic keyword phrases like “birthday cakes Charlotte” or “cupcakes Charlotte.” It’s not as easy to climb the rankings of these results, but it’s conquerable – not to mention profitable. It’s important to understand that each and every one of the billions of searches conducted each month begins with an identifiable need. Therefore, first and foremost, you should ask yourself two questions: “What types of problems do people have for which I can offer a solution?” and “What words or phrases would they use to express that need?”. The answers might not be quite as straightforward as you think. Let’s say you own a professional landscaping company. Certainly there are people who will search for “Charlotte landscaping” or “Charlotte lawn care,” and without question you want to make sure that your site is optimized to be ranked high among the results. But there are many, many other search terms like “landscaping ideas,” “garden,” “roses,” “weeds,” “fertilizer,” “insect control,” “How do I make my home more energy-efficient?” and even “How do I sell my house?” that are still relevant to your business. After all, chances are good that you would have something of value to offer anyone in your area that was experiencing a need related to one of those ideas or questions. Therefore, you should take all of these into account when developing your SEO strategy.

What’s next?

Now that you have a deeper understanding of the fundamentals of search, you’re well-armed to apply that knowledge to the practice of SEO. The great news for you as a business owner or marketer is that there are actually many things you can do yourself to improve your standing with the major search engines. Even better, many of these tactics also serve double-duty in supporting and reinforcing your other marketing efforts. Before you get started, be sure to read SEO 102: 13 Steps to Improve Your Ranking the Right Way. While there’s no instant formula that will launch your site to number one, by implementing these tried-and-true SEO techniques with patience and persistence over time, you can be confident that you will yield real results. * Source: comScore

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