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 Who, What, When, Why and How of Successful Email Marketing, Part II

Email marketing: it’s not the newest, shiniest weapon in your business growth arsenal. But there’s no denying that it’s still a highly efficient and cost-effective way of communicating with your existing customers as well as new prospects. But don’t let the low barrier to entry lull you into a false sense of security. There are certain fundamentals you must follow if you want to create a campaign that captivates and motivates versus one that is ignored and condemned to the trash folder. In part one of this series (http://www.famefoundry.com/11041/the-who-what-when-why-and-how-of-successful-email-marketing-part-i/), we examined the quality of the recipients to whom our campaigns are sent and solidified a strategy for when and why to send them to ensure that we do not overwhelm those recipients with messages that are unimportant or unnecessary. Now, we’ll turn our focus to the remaining two fundamentals of email marketing success: what we will say and how that message will be delivered.

The How

No matter which email marketing platform you use to create and send your campaign, all include templates that provide designated areas for content that can be easily edited. The issue with these templates, of course, is that they are, well, templates. As a result, when you use them, you run the risk that your emails will look nearly identical to others that your customers receive, and simply adding your logo is not enough to create real differentiation. As a result, used as-is, they can make your marketing campaigns look cheap and unprofessional. This is why customization is a must. All of these email templates are built with HTML, the same programming language used to construct websites. Behind the scenes are code and images that can be edited to create a more custom-tailored look and feel. Due to the highly technical nature of making modifications within the HTML code, this is probably not something you should DIY but rather entrust to your web development team. They can shape and refine these pre-existing templates or even create a completely unique template design from scratch that integrates seamlessly with all elements of your brand’s visual identity (i.e., your website, printed materials, etc.) and sets you apart your competitors. Whichever approach you choose, this represents a relatively small one-time investment that will pay great long-term dividends as you use your branded templates time and time again. Ideally, you’ll want to establish a few different email layouts that can be used for various purposes, such as newsletter-style content, major announcements and perhaps service alerts or other time-sensitive notifications. The template formats you require will of course depend on your business needs, but by having a few on-hand to choose from, you can ensure all of the email communication that you send reflects well upon your brand.

The What

Subject, subject, subject

No matter how beautifully designed your email might be, that design isn’t worth the pixels it’s transmitted on if your message goes straight to the trash unread. Your subject line is the make-or-break factor that will determine whether the recipient will grant you even just a few seconds of their precious time and attention. A line that’s boring and unimaginative provides zero motivation for them to give your message a second glance. One that’s too over-the-top screams “SPAM!” and is just as likely to be ignored. Subject lines that are too long, written in ALL CAPS, filled with exclamation marks or intentionally deceitful (e.g., including “Re:” to make the email appear as if it’s a direct reply to a message from the recipient) are guaranteed to work against you, so avoid them at all costs. Effective subject lines are neither vague nor dull. If you received an email with the nondescript subject line “News Update,” would you read it? Neither will your customers. Similarly, the subject line “April Customer Newsletter” explains what the email itself is, but it offers no insight into the content of its message. For my own company’s email newsletters, we have eschewed these types of easily disregarded subject lines in favor of more descriptive ones that tease the content. In doing so, we have achieved much better open rates. One way to boost the success of your subject line is to frame it in the form of a question, such as “Are you considering a move to the cloud for your business?” or “Do you know the reasons companies usually struggle with a move to the cloud?” Those two subject lines are ones I actually tried recently along with a more straightforward one – “Challenges of Moving Your Business to the Cloud”. While all three saw relatively good open rates, the two that posed a question to the recipient well outperformed the other. Start paying attention to the emails that land in your own inbox. Which subject lines catch your eye? Which do you gloss over without a second thought, and which ones prompt you to hit the “delete” button immediately? Soon you’ll begin to discern which types of lines are most effective, and you can apply these techniques to your own campaigns.

Inform, don’t overwhelm

Now that you’ve formulated an attention-grabbing subject line that will motivate your recipient to open your email, the next challenge you must conquer is the content of the email itself. All too often, companies try to communicate too much via their emails, with the end result being that the recipient is too overwhelmed to fully process and take action on the information being conveyed. Many email newsletters fall into this trap, with company announcements, blog articles, product highlights and more crammed into a single message. In an attempt to make sure the recipient has access to every piece of information that could possibly be of value to them, the e-newsletter becomes a scattered mess that lacks organization and direction. Additionally, this information is usually presented in full within the body of the message itself, instead of prompting the reader to click a link to access the full text via a web page. As a result, the number of ideas coupled with the depth of their presentation spells doom for the campaign. A quick scan of the message is enough to turn the recipient away because they have no desire to invest the time necessary to sort though the barrage of content to find the one or two bits of information that might be of use to them.

Be a tease

Avoid this “much too much” trap by editing and teasing your content. Include no more than three key ideas per newsletter. Sure, you may have more than three things to say, but you must be ruthless in your selection process, and save the rest for another missive or another medium. Next, present those three (at most!) ideas in the form of short teasers. A title, a short intro to the news item or article being highlighted and an accompanying image are all you need to pique your reader’s interest – along with a link prompting them to read more on your company’s website. By doing so, you’ll ensure that your email newsletter offers a clean, visually appealing presentation that can be scanned and processed in a matter of mere seconds. If a reader is interested in one of the three key ideas you’ve presented, they have the option to easily obtain more details for themselves. Of course, this approach has the added benefit of driving users to your website and increasing that site’s exposure to new audiences. When I suggest this “click to read more” approach, the reaction I most often receive is that readers “don’t like to click a link” but rather want to read the article in their email message. I have no idea where this belief came from, but it is false. Users are more than comfortable with clicking links, especially if it comes from a trusted source (see Part I for the benefits of using a carefully curated email list of customers who know who you are already). The Internet is driven by clicks, so do not be afraid to embrace this behavior! By mastering these five fundamentals of successful email marketing – the who, what, when, why and how – you can help to ensure that your messages are a welcome presence in your recipients’ inboxes, that they are read and, most importantly, that they motivate your customers and prospects to take the action you desire.

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Shaping Business for the Tribe

Previously, in our articles Tribes in Today’s Marketing and Mastering Tribe Marketing, we explored how the marketplace is represented by countless networks of people who are connected by a common interest or goal – known as tribes – and how successful business growth is rooted in attaining leadership in those tribes and putting the principles of trustcasting into practice. Now we shift our focus to an outside-in examination of how the influence of tribes extends beyond promotion to shape how today’s businesses operate and evolve.

The old way

For any organization large or small, achieving a thorough understanding of its target market has always been fundamental to growth and long-term success. However, the task of gaining this knowledge has historically been a difficult process. It required a significant and ongoing investment of time and resources in fact-finding through surveys, focus groups, opinion polls and demographic studies – all in the name of formulating a more detailed profile of the customer, their attributes, their needs and their preferences. But in the same way that old advertising has been rendered ineffectual in today’s consumer-centric marketplace, these types of market studies have likewise become obsolete. Such disconnected, impersonal methods of information gathering are often too skewed, too broad or based on too thin an audience segment, ultimately falling short in delivering the depth of insight needed to engage in meaningful, trust-based relationships with the customer. More importantly, these outmoded forms of market research are not taken seriously by the majority of participants and thus fail to elicit the honest, thoughtful responses needed to understand what they really want, what truly drives their decision making and what actually motivates them to action. However in today's tribe-driven marketplace, the answers are right there in front of you.

Know thy customer, the tribe way

Simply by being an active participant in the tribe, you will gain an intimate understanding of your customers.If there is one thing that tribe marketing affords today's business, it is the ability to identify, engage and lead the community of customers that exists around it. You must understand that your tribe represents your customer base. While every one of your customers may not be active in the tribe, its membership is a reliable sample of all customers – especially those that can be the most passionate evangelists for your business. Therefore, attaining membership and demonstrating leadership in your tribe gives you invaluable access to your customers. Simply by being an active participant in the tribe, you will gain an intimate understanding of your customers, their lifestyle, their wants, their dislikes and their needs. It’s a deceptively simple concept: earn your place in the tribe by being one with its goals and serving its interests, and you will achieve unparalleled insight into the marketplace where your customers exist because you yourself are a part of it. However, it is then that the real work begins.

Listen, learn and integrate

When you’re a member of your tribe, you will be exposed to brutal honesty. The tribe is not there for you; they are there for the tribe. They will discuss their issues candidly and openly. They will likely complain and may at times be crass. This is not the type of polite, shallow input you receive from a survey or a customer comment card that is filled out hastily under the watchful eye of the clerk at the front counter. These are real issues being voiced by real people with real needs. You must be prepared to have your feelings hurt and develop a thick skin. However difficult it may be, it is important to absorb these opinions in their most raw form. If you’ve made the investment in earning your place in the tribe, you can take this process one step further and engage its members in your business operation. Let the tribe know what you are doing. Ask for feedback. Ask for honesty. Ask what’s wrong and how you can do better. Whatever you do, don’t attempt this unless you are a bona fide member, or you’ll find yourself being ignored, being fed ineffectual information or even being ousted from the tribe for conducting market research as an outsider. Ultimately, the benefit of being in the presence of such brutal honesty is that it often brings to light problems or weaknesses within your organization as well as untapped possibilities for growth. These may come in the form of an employee that they dislike, a product feature that they hate, an inconvenience you should correct or a void in the marketplace that is ripe for a solution. You may even find bigger issues to address: Maybe your product isn’t what’s needed. Maybe it needs to evolve. Maybe you need to rethink everything. Whether big or small, the problems and obstacles that you uncover by listening and engaging are invaluable to long-term success when you use what you’ve learned to direct the evolution of your organization in order to continue growing with your tribe.

Letting go and following the tribe

As the one charged with growing your organization, you’re probably used to doing things your way. However, if you are going to serve the needs of your tribe, you must take a step back and re-examine every aspect from the perspective of its members. You must not only preach the mantra, “The customer is king,” but live it through and through. You must not only preach the mantra, “The customer is king,” but live it through and through. It’s important to understand that your tribe represents the loudest, most opinionated and most critical subsection of your customer base. The honest, unfiltered information to which you have access as a member of this inner circle allows you to make changes to your product or service that will satisfy your most demanding customers. If you can placate these early adopters, loyalists and core users, then you will be ahead of the curve in not only meeting but exceeding the needs of your greater customer base. Should you give them what they want, they will wave the flag for you, giving you invaluable PR and unbiased word-of-mouth marketing the likes of which no amount of money can buy. This is not to say that you should make sweeping changes to your products, services, operations or processes based on the fleeting whim of each and every vocal customer. Quite the opposite is true, in fact. This is about getting to know the whole of your tribe – identifying the desires, problems and goals that are common to the greatest number – and applying your own ideas and innovation toward reshaping your product or service offering to provide solutions that address these needs.

Setting your tribe on fire

People instinctively long to be a part of something meaningful. Another aspect of reshaping your business around your tribe is finding a way to inspire them. The members of your tribe have the greatest potential to become your most ardent evangelists, but only if you can connect with them on a deeper level. People instinctively long to be a part of something meaningful. They crave outlets that allow them to engage in their passions. They are ready to carry the torch for those who they see doing good. Let’s say you own the corner coffee shop. Who is your tribe, and what is it about your offering that inspires them? Perhaps your tribe is made up of people who are passionate about organic or fair trade coffee. Or maybe the atmosphere of your store represents the culture and sophistication of urban lifestyle, and that’s what excites them. It could be that your tribe feels strongly about patronizing locally-owned businesses, and you offer Charlotte’s best coffee, so they find meaning in supporting your shop with their dollars. It’s possible that inspiring your tribe will require you to tell a story that’s greater than your direct product or service offering. Perhaps the members of your tribe are highly attuned to social and political issues that affect their community. Let’s say you decide to raise $50,000 this year to support local charities that assist homeless families, and you pledge that 25 cents from every cup of coffee you sell will be applied toward that goal. People will be proud to be seen carrying your cup because of who you are and what you do. The logo on that cup then becomes the secret handshake for the members of your tribe. There’s no advertising campaign, no marketing gimmick and no customer rewards card that can rival a tribe that is inspired. If you attach greater meaning to what you do, you give your tribe a reason to shout your message from the rooftops and proudly embrace your identity as part of their own. In this way, you’ll become more than a brand, you’ll become a revolution.

Tribes crave ideas

If you find that what you’re doing doesn’t light a tribe on fire, it’s time to invest in the white space of creating ideas. Today’s business is idea-based. Great ideas require a willingness to take a risk, to challenge the status quo and to do something revolutionary. This runs counter to traditional business thinking, which tends toward minimizing risk whenever possible. However, a tribe-driven marketplace has no tolerance for those who play it safe. Apple has sold two million iPads within the first 60 days of launch in the midst of an economic downturn because they hit on an idea for a new category of mobile device that set their tribe on fire. Great ideas require a willingness to take a risk, to challenge the status quo and to do something revolutionary. Amélie’s in Charlotte has achieved monumental growth because they took a concept usually found in much larger metropolitan locations – a 24-hour authentic French bakery and cafe – and brought it to a tribe of urban foodies that were primed for something new and different. Bucking conventional restaurant industry wisdom about the necessity of turning tables quickly, they instead welcome the members of their tribe to stay and linger, transforming their offering from a commodity to a culture and winning a following of loyal and vocal evangelists as a result. Tribes are ready and waiting for the next big thing that is going to solve a problem, meet a need or make their lives better. If you’re the one that delivers that idea, they’ll rally around you, spread your message like wildfire and fan the flames of your success.

There’s no shame in being small

The downfall of many small businesses when it comes to advertising and business growth is trying to act like a large business in order to increase their perceived legitimacy and trustworthiness in the eyes of the customer. However, in today’s tribe-driven marketplace, small businesses actually have a clear and distinct advantage. In fact, more and more, it is the large business that is trying to emulate and keep pace with the local mom-and-pop operation. Trust is earned when real people connect with real people. It is very hard for a large corporation to be real to anybody. In fact, when it happens, it’s because they have found a way to provide the level of personal service and engagement with the tribe that would typically be expected of a small business. In today’s tribe-driven marketplace, small businesses actually have a clear and distinct advantage. AT&T tried this with “Seth the Blogger Guy.” Recognizing that they couldn’t just run ads saying that they were working on the problem, they crafted a fake persona to represent AT&T to its tribe. They thought presenting customers with an unassuming-looking character on a first-name basis with the audience would be sufficient to cultivate trust-based relationships. This is false tribe leadership, and tribes are not so easily fooled. Conversely, Frank Eliason of telecommunications giant Comcast has established a customer service program that offers the kind of highly personalized touch that would ordinarily be more characteristic of the neighborhood florist. He has built a reputation for approaching problems with a genuine passion for resolving problems and following through on what is promised to achieve a positive outcome. As a result, over time people have given Frank and his team their trust, and they trust Comcast more as a result. Another great example is Mellow Mushroom – a very successful pizza restaurant chain with sales in the millions. However, their success is due in no small part to the fact that when you enter a Mellow Mushroom, nothing – from the menu to the decor to the staff – resembles a chain. They have identified their tribe, and they are catering to it. If Mellow Mushroom suddenly decided that they needed to look more sophisticated, more polished and more corporate, their tribe would quickly abandon them and follow the next place to come along and offer the casual, unrefined ambiance of a college dive bar. In this way, there is great possibility for small businesses. Your tribe inherently expects you to be real and to be personal, and as a result, they are predisposed to trust you. Don’t fall into the trap of trying to force your organization to be something it’s not. Remain focused on listening to your tribe and molding your operations around what you see and hear as an active member of your core customer base.

All for the tribe

The facts are simple: if you want to grow and thrive in today’s marketplace, your organization, your business operations and your products or services must be shaped by and around the tribe. If what you have to offer doesn’t fit your tribe, you have an obligation to listen to them, identify their needs and grow your business in that direction. If a competitor does it before you, you’ll be facing a mountain that’s immeasurably harder to climb.

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