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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Four Ways to Delight – Not Annoy – Visitors With the Element of Surprise

During its most recent keynote event, Apple announced that it had a surprise in store for their customers: every iTunes accountholder in 119 countries would receive a free copy of U2’s latest album “Songs of Innocence.” This giveaway translated into over half a billion albums given away, representing the largest release in history in a deal that is speculated to have cost Apple $100 million dollars. It would be easy to assume that Apple’s customers would be thrilled by this generous gesture. While many certainly were, there was also a very vocal segment who were not so pleased to see this album suddenly appear in their music collection. Many of these naysayers took to social media to express their concerns, which were centered not as much on the album itself but rather on the way that its delivery had been handled. While Apple undoubtedly thought that they were providing a convenience by automatically pushing the album out to all iTunes accounts, in doing so, they took away the customer’s ability to choose whether or not they wanted to receive this gift. What was meant to be a nice surprise came across as an act of overstepping the bounds of privacy for some customers – definitely not what Apple was hoping for when they conceived this promotion. Employing the element of surprise in marketing and in web design is tricky business. When done right, it can delight your customers, but if handled incorrectly – as with the Apple giveaway – it has the potential to frustrate and alienate them instead. Let’s take a look at four ways to use the unexpected to make a favorable impression on your website visitors and leave them wanting more – and the pitfalls to avoid along the way.

Surprise! Here’s a free gift!

Freebies have long been a staple of marketing and promotion. From product sampling to contests to incentives for joining a mailing list or sharing contact information, they are an effective way to break the ice when building relationships with new customers. There’s nothing wrong with a good giveaway – as long as you obey the fundamental rule of trustcasting, recognizing that all promotional efforts must be founded first and foremost in building trust with your customers and website visitors. As we touched on above, the problem with Apple’s U2 album promotion had nothing to do with the giveaway itself but rather with its delivery. Permission is a key element of trust-based marketing, and Apple’s circumvention of the act of permission seeking was perceived as a violation of trust by some iTunes customers. A direct contrast to this is MailChimp’s free t-shirt promotion. When a new customer opens a paid account and sends their first email campaign, they receive a message of congratulations along with the offer of a free t-shirt. In order to receive the t-shirt, however, the customer must select the size they would like, thereby accepting the offer; the shirt doesn’t simply turn up unexpectedly in their mailbox. Of course, we have no way of knowing how many people actually decline this free gift, but regardless of whether it’s zero percent or fifty, the most important aspect is the respect for the customer demonstrated by the act of seeking permission. MailChimp allows the customer to maintain a sense of control over the transaction rather than removing that control the way that Apple did. As this comparison shows, permission is a make-or-break element between a surprise that delights and one that compromises trust and goodwill.

Surprise! You’ve got mail!

Email is definitely an area of online marketing that’s fraught with pitfalls. You can be a welcome presence in your customers’ inboxes, or you can be a nuisance that’s banished to the junk mail heap. One way to practically guarantee that you’ll end up in the latter category is by “surprising” your customers with a flood of emails that they did not expect to receive. Undoubtedly, you’ve experienced this scenario at some point: you make a purchase from a website or register for an account, and all of a sudden your inbox is overrun with promotional emails from that company trying to get you to come back to their site and buy, buy, buy. Make no mistake: the simple act of placing an order is not an invitation to unleash a deluge of spammy messages. Again, returning to the theme of permission, the first step to ensuring that your emails are welcome is by allowing your customers to explicitly request to receive them. A common way to accomplish this is by including a mailing list opt-in on your site’s checkout form accompanied by a message affirming that the customer wishes to receive updates with special offers and future promotions. In and of itself, this is a fine practice. If someone wants this information, allow them to receive it! The problem is that many companies have this option selected by default, and as a result, in their rush to complete their transaction, many customers will overlook this feature entirely and will unwittingly opt in to the series of emails that will follow. Again, this is an unpleasant surprise that does not contribute to improving the customer’s perception of your brand. If you are going to employ a mailing list opt-in checkbox anywhere on your site, make sure that it’s unchecked by default and that customers must actually see, read and make a conscious effort to elect to receive ongoing communication from you. Your mailing list won’t grow as quickly this way, but you will avoid surprising unwitting subscribers with emails that they did not expect or want. But obtaining permission to send these emails is only half the story. You also need to make sure that the content of your messages is designed to delight. Anything that is purely self-promotional in nature will be regarded as nothing more than an annoyance. You must use your carefully garnered inbox privileges to provide value to your customers – whether that comes in the form of special offers, fun promotions, reminders about upcoming events or just plain useful information. Your focus should be on crafting email campaigns that leave your customers looking forward to seeing what you’ll send next – not hitting the “spam” button as soon as it lands.

Surprise! Let’s watch a video!

Video content is a great way to engage with visitors to your website. As much as we writer types are loathe to admit it, people don’t like to read. They like to look at pretty pictures, and even more, they like to be entertained by videos. If you can create compelling videos – whether they demonstrate your products, offer helpful tips or are just flat-out amusing – your visitors will be delighted that you’ve gone the extra mile to give them the kind of content that they prefer rather than forcing them to wade through page after page of written text, and you’ll be head and shoulders above your competition. But there’s one important caveat to video content: never, ever, ever set your videos to auto-play on your site. Uncued audio, video, animations and pop-ups are completely taboo in modern website design, and if you use them, you’ll provide an unpleasant surprise that sends visitors scrambling for the back button to get away from this sensory onslaught. Don’t insult the intelligence of your visitors by forcing content upon them. It’s the online equivalent of having a pushy salesman pounce on them the minute they walk in the door and hound them into looking at products or services that may not be relevant to their interests at all. Instead, provide contextual clues on the page that indicate what your video is about, and allow your visitors to decide for themselves whether or not they wish to view it. This removes the element of unwelcome surprise without eliminating the value of the video content itself.

Surprise! We’ve made changes to our website!

Inevitably, there will come a time when it’s necessary to make changes to your website. These changes could be as minor as adding new types of products or services or as significant as a complete redesign. The problem comes when regular visitors return to your site expecting one thing (the site that they have become familiar and comfortable with) but receive something else instead (the new site). Of course, it goes without saying that any changes you make to your site should be driven by the objective of creating a better experience for your users. Make sure you carry this objective through to the launch of your new site or its new features by smoothing the transition for your regular visitors. After all, every website comes with an inherent learning curve. If you’ve done your job right, that learning curve should not be very steep; yet, it will still exist as visitors determine where they need to go and what they need to do to accomplish their goals. Therefore, when you make a change, you can ensure that it’s well received by visitors simply by alerting them to these changes and guiding them through the process of navigating them. One example of how to execute a re-launch right is Citizens Bank. Weeks before the release of their new site, they posted a message on their existing home page announcing that changes were ahead and signaling the date when the newly overhauled site would launch. They also offered a preview of the new site complete with an overview of new features and instructions for where to find commonly used tools. Did every customer see this message and take the tour? Of course not, but many did, and as a result, they were not taken aback by a jarring surprise on the day of the new site’s launch. Instead, they were already acclimated to the new features and functions, thereby maintaining a sense of certainty and control throughout the transition process. By demonstrating to their customers that their needs and desires were an important consideration in the bank’s plans for their new site, Citizens Bank was able to create a positive experience out of their redesign and avoid the potentially hazardous pitfall of forcing their customers to stumble unassisted through the process of re-learning how to use their site.

In summary

Going above and beyond to provide customers with unexpected value can be a powerful way to separate yourself from the competition, but if done incorrectly, it can also backfire in a big way. In the case of Apple, the company had to release a tool to allow customers to remove the free U2 album that they had been gifted – something they clearly did not foresee as necessary when they conceived the promotion. When you are considering how to implement the element of surprise in your marketing and website design plans, remember never to lose sight of your customers and their needs. Always ask their permission, keep the power in their hands and allow them to remain in control of the process as much as possible so that your surprise will be welcomed with delight and satisfaction.

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

In today’s social media era, email marketing is hardly the newest, most popular kid on the block, but it still remains a powerful weapon in any marketer’s arsenal, as it’s a highly efficient and cost-effective way of communicating with your existing customers as well as new prospects. It’s also simple to execute. With options ranging from online services like MailChimp, Constant Contact and Emma to customized, cloud-based platforms that can be integrated with your CRM system, you can easily create and manage your own email marketing campaigns. It’s not all sunshine and rainbows in the land of email marketing, however. Because of the low barrier to entry (specifically the aforementioned cost and ease of use), many companies dive right in without fully developing a sound long-term strategy. Yes, getting started with email marketing is easy, but doing it well is what will make the difference between a campaign that captivates and motivates versus one that is ignored and condemned to the trash folder. In this two-part series, we’ll cover the fundamentals of successful email marketing – specifically what you should be saying, how you should be saying it, when and why you should be doing so, and to whom you should be speaking.

The Who

Taking these points in reverse order, let’s start with the who. When it comes to email marketing, the quality of the list of recipients to whom your campaign will be targeted is a make-or-break factor in its ultimate success. There are no shortage of companies that are all too eager to sell you lists of addresses. However, even if these are “opt-in” lists of people who are supposedly willing to receive such emails, a purchased list will always be far less effective than one you have assembled yourself. People who have interacted with your business before – even if their encounter was as brief as a visit your website or your trade show booth – are much more likely to want to hear from you again and, as a result, will be more receptive to your message. To provide you with an example, I have recently done some email marketing work for a company that runs a series of zombie-themed adventure races. Participants sign up to run these 5k races and be chased by actors dressed as zombies, while others sign up to be the zombies doing the chasing. The company does use email marketing but not to find new participants; those generally come via word-of-mouth, social media sharing and advertising links from other websites. Instead, they rely on email marketing solely to communicate with people who have already signed up for a new race and those who have participated in the past. The messages that are sent either provide important logistical details for upcoming events to registrants or advertise future races and promotions of interest. Because all recipients are already familiar with the company, these emails are not perceived as an unwanted inbox intrusion. Rather, they are welcomed as valuable and welcome communication from an organization with whom they have already established a relationship. As a result, the company’s email blasts are typically opened by over 60 percent of recipients, and some boast open rates in excess of 80 percent. Anyone who has ever done any email marketing with tell you that an open rate of 60+ percent is incredible. By contrast, the expected open rate for a campaign to anonymous recipients on a purchased list is 5-10 percent at best. The difference is clear: people who recognize and appreciate your brand are more likely to open your emails. They are also more likely to read your message and take the action you desire.

Beyond open rates

While the percentage of people that open your email is an important metric to consider, it isn’t the only statistic you should concern yourself with. It’s also to critical to examine how many of those who read your message take the next step and engage in some fashion, such as by clicking on a link. Someone who simply opens your email, gives it a quick cursory glance, then immediately deletes that message is not a success story. Yes, they clicked on the email, and they will be counted in your open rate statistics, but they did not engage with your company in any meaningful way, and they will likely forget about you as soon as that message hits the trash heap. By contrast, someone who knows your company and has interacted with your business in the past will not only be more inclined to open and read your email but to take action after they have read it, whether that comes in the form of visiting your site to read the full text of a blog article or press release, downloading a whitepaper, registering for an event or making a purchase. And isn’t that the ultimate goal? After all, you’re not going after simple opens; you want people to take steps that further solidify their relationship with your business, and a better quality list will yield these more meaningful results.

Quality over quantity

Let’s look at some numbers: if you email 10,000 people whose addresses were purchased and who have no prior connection to your business, you will get a fairly low open rate – say 5% (a common figure for these types of lists), which means you should expect that only about 500 of those 10,000 people will actually open your message. Next, we take a list of contacts that you have careful curated over the years from customers you have done business with and connections you have made. The list will certainly be smaller – let’s say only 1,000 names in total. If you see an open rate of 30% (which is about average when you look at open rates across all industries), about 300 people would open your message. Yes, you would get more opens from the bigger list, but again, quantity does not mean quality! The majority of those 500 opens from the purchased list will junk the email immediately, while very few will engage in any way. By contrast, the 300 people who opened the email in our second example will, in the end, yield a much higher rate of engagement, which is the true measure of a successful campaign.

The Why

Even if you are communicating with contacts who know your company and have done business with you before, you cannot violate the cardinal rule of trustcasting, which holds that any and all efforts dedicated to the promotion of your business must be founded in building trust. When it comes to email marketing, the way you build trust is by demonstrating to your recipients that you respect their time and attention. Never send a purely self-promotional message; only communicate if you have something of real value to offer them. That value can come in any number of forms, whether it’s a great discount offer or a highly informative bit of content. Of course, the recipient’s perception of value is tied closely to the frequency of your communication. Email too often and you will become an annoyance, no matter how great your offering is. At best, people will begin to ignore your emails or see them as white noise. At worst, they will unsubscribe from the messages altogether. On the flip side, if you do not reach out often enough, you run the risk of slipping out of sight and out of mind. The trick is to find the balance between these two extremes by devising a plan that allows you to email frequently enough to provide value but not so often that you become a bother. Establish a schedule for your emails that will act as a guideline. I use the word “guideline” for a specific reason here – because this schedule should be flexible and not written in stone. If you insist on sending out an email blast simply because your schedule dictates that it’s time but yet you don’t have anything of true value to communicate, your emails will be ignored because while they will be reliable, they will not be important. Again, the schedule is just a guide; you must use your judgment as to whether it’s right to send an email or whether it’s best to wait.

A case study in scheduling

During the first week of every month, my company sends an email to our entire list of contacts featuring all of the events that we have scheduled for that month. Because we run upwards of 10 or more events each month, it would be impractical to send a separate email promoting each one (that would quickly put us in the “annoying” category). In addition, we also send two different newsletter-style emails – one that goes out to our clients on a monthly basis and one that goes out to our partners and vendors on a quarterly basis. However, there have been many months where we do not have enough relevant, valuable content to justify sending a newsletter to our clients. If this is the case, we simply skip that particular month. For our vendors, who already receive our emails with less frequency, we usually delay our blast by one month rather than let an entire quarter pass with no communication. In both cases, whenever we decide to skip a planned release, we make a concentrated effort to find something of value to send the following month to ensure that we stay on the radar with our readers. In addition to these regular emails, we sometimes send important, time-sensitive communication, such as service disruption alerts based on planned downtime or impending storms. In the event that circumstances necessitate sending these one-off emails, we adjust the timing of our other monthly blasts accordingly to ensure that we do not send too many emails within too short a timeframe. As this example shows, each month may be slightly different in its execution, but with a sound plan in place, you can make sure that you maintain an ideal balance of timely, non-intrusive communication.

The When

As with almost every form of marketing communication, timing plays a key role in determining whether your message is received. There are many conflicting reports on what day of the week and time of day are optimal for sending email blasts, but here are my findings based on extensive experience: Mondays and Fridays are the worst weekdays to send emails. Unless there is an urgent reason why you need to send your communication on one of these days, it’s best to avoid them altogether. This trend is easily explained, as inbox traffic tends to be exceptionally heavy on Mondays, and by Friday, everyone is primarily focused on tying up loose ends before the weekend. Instead, I find that mid-week emails (Tuesday through Thursday) have much better open and engagement rates. When it comes to the time of day, I have found that early is better than late. Emails that land prior to the start of the business day – say at 6:00 a.m. – seem to perform best. These emails greet readers in their inbox as soon as they arrive at the office (or during breakfast if they are checking email prior to heading in) and seem to perform better than ones sent even just a few hours later. And as a general rule of thumb, blasts sent in the morning outperform those that are sent after lunch or towards the end of the workday. When scheduling your next email blasts, I recommend planning an early morning, mid-week delivery, but within this window, try playing around with some different day/time combinations to see which ones work best for your particular audience.

More to come

So far we have taken a look at the quality of the recipients to whom our campaigns are sent and we have 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. In the next installment of this series, we will explore the remaining two fundamentals of email marketing success – what we will say and how we will say it.

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