Two Key Take-Aways from Super Bowl XLIX

Super Bowl Image

Image from: www.residentassistant.com

As we approach Super Bowl Sunday, there is naturally a lot of talk about nacho dip, Katy Perry and the comical marketing endeavors of companies with several million dollars to spend on a 30 second time spot. Since there are football breaks between Super Bowl commercials and refilling the guacamole dish, there’s also a smattering of people talking about the Seattle Seahawks and New England Patriots.
Amidst the cacophony of Super Bowl chaos, there is one vantage point on which the internet has yet to elaborate. Both of these teams have massively loyal fanbases. So, what can each team teach us about customer loyalty

Seattle Seahawks

The Seahawks demonstrate the success that is born out of atmosphere and gratitude. Anyone who has ever been to a Seahawks game will attest to the overwhelming presence of the “Twelfth Man,” or the additional “teammate” embodied by the fans as a whole. The Seahawks have attributed many home game wins to the earth-shaking (literally) power of their fanbase. The “Twelfth Man” has become such a Seattle staple that the Seahawks retired the number 12 in 1984 in honor of their fans. When the Seahawks make it to the playoffs, a “12” flag can be seen on the Space Needle, attributing the team’s play off status to the fans. This gratitude generates even more fan fervor, which ultimately benefits the team by driving them to victory (… and helping them sell a ton of 12th Man swag).

Applied to the hospitality industry: There are many contributing factors to creating the kind of atmosphere that in turn creates loyalty. Engaging your customers through creative promotions, raffles, giveaways and the like is an excellent place to start! Spice things up with a themed party, social media keywords for prizes or an in-store scavenger hunt for bonus points. Also, be grateful to your customers when you achieve success milestones. You wouldn’t be in business without your customers, and your gratefulness will inspire loyalty.

New England Patriots

The Patriots demonstrate the role that consistent performance plays in growing and retaining a fanbase. They have had winning seasons for the last 14 years and their current record is 170-54 for a .759 winning percentage. They made the playoffs 12 of the last 14 years. They have been to 6 of the past 14 Super Bowls (including this year) and have won 3 times. If you live in New England, this consistent solid performance leaves you no reason not to cheer for the Patriots (well: that and the fact that there are no other NFL teams in the whole of New England).

Applied to the hospitality industry: Control as many factors as possible to be sure you are providing a consistently positive experience for your patrons. The value of having a loyalty program that’s always there for your customers (instead of just running promotions or special offers occasionally) is, in part at least, the fact that it helps provide a consistent positive experience for your customers. It’s great to surprise your customers with something special on occasion, but nothing beats consistent, thoughtful, intentional customer service.
So there’s the last Super Bowl article you need to read. Go eat some things wrapped in bacon and sing your heart out at the Half Time Show…  you know we will!

bacon wrapped

The Golden Rule of Loyalty

By Ethan Tuxill

In an age where the business environment continues to evolve, accelerate and everyone seems busier than a one-toothed man in a corn-on-the-cob eating contest, I want to hit the pause button and reflect on what has remained a vitally important element of the B2C relationship: understanding and being understood.

Whether you’re an international Fortune 500 company or a single location coffee shop, your brand’s success is directly tied to how well your business and product offering resonates with the public. This may be obvious, but there are countless businesses that don’t take this into consideration when building their brand.

Think about it for yourself; anytime you elevate a specific brand or business over another in your mind, it’s usually due to the fact that what they offer you as a customer aligns with what you hope for out of them as a business and what you care about. This is especially true for loyalty programs.

There are an astounding number of loyalty programs floating around the business stratosphere, and most of them are just added noise in the already cluttered marketplace. Customers can see through a crummy program that offers little benefit for frequenting a business and often, having such a program can be damaging to your brand. Adding more complexity and “features” that customers don’t find compelling is not only a waste of resources, but a mark of an out-of-touch business.

Offering rewards that give a real benefit to the customer and that are perceived to be meaningful, not only generates goodwill and loyalty, but shows you are attuned to what your customers value. Generosity and graciousness show that you care about your customers enough not to presume that you deserve their business.

A glowing example of gracious generosity and an in-touch business comes from one of our most successful businesses; Wooden Legs Brewing Co. On Christmas morning, they sent out a free Christmas beer to their most loyal customers, a no-strings attached gift. This kind of approach to customer generosity and long-term relationship building is part of what has made their program wildly successful.

Customers aren’t ignorant; they understand that business owners can’t give away the whole farm just to get them in the door (good loyalty programs are careful with and focused on margins, profits and sustainable pricing). Customers also know that getting 10% off after spending $200 is like paying with a $20 and telling the waitress to keep the change on a bill for $19.82. However, there is a sweet spot in between skimping and getting pillaged, and customers gravitate towards companies that understand that and whose loyalty programs reflect that.

The most valuable business to customer interactions are more than just an exchange- they are about building a relationship. When this happens, repeat revenue is sure to follow.

LoyalTree PSA: Train Your Staff!

We say “Party,” you say “Staff Training!” Party! … you missed your queue.

We know staff training isn’t usually a party for you or your employees. However, training staff on your loyalty program is a requirement for a well-running and successful program. The difference between a program that thrives and a program that dives is usually staff buy-in.

Staff members are your brand, your personality, and your marketing mouthpiece. Above all else, they need to be comfortable recommending a new program. Remember to have a staff meeting prior to the launch of your program to make sure everyone is on the same page!

How well the staff understand your loyalty program, and how excited they are about it, is the difference between having a program that is used by your most loyal customers only and a program that has customers at all stages of loyalty. Having your uber loyalists on board is great, but wouldn’t it be even better if you could reach those on the cusp, and turn them into top customers as well?

Here’s what we recommend to LoyalTree business owners for training their staff on our program: 

  1. Nuts and Bolts: How the LoyalTree app works (e.g. earning points, purchasing a reward, redeeming a reward).
  2. Program Rules: Some rules are LoyalTree standard, and others are customizable. Either way, it’s important that staff are clear on how long customers have to collect points after a purchase, what to do if a reward expires before it gets used, etc.
  3. Marketing: Sell the program to your staff like you would sell it to a customer. This helps them know what to say about it! What does the customer get for signing up? What rewards can they purchase? How many points do they get per dollar spent?
  4. Support: Ensure that staff members know that if the customer has issues with their app they can email support@loyaltree.com for help!

You may also want to consider a monthly or quarterly participation challenge to give your program a membership boost. Some of our business owners offer gift cards every month to the Top 5 servers based on their customers’ rate of engagement. Others have contests to see who can get the most customers signed up for the program. We even have a business owner who tasked his staff with dreaming up the best promotion strategy for getting the word out about the program, whosever idea they used received an Amazon gift card.

However you choose to engage your staff, the most important thing is that they take ownership of the program. If they understand how it works, and why it’s helping the business, they are far more likely carry out their mission critical role in ensuring its success.

Have any other ideas for making things fun for your staff members? Write to us at marketing@loyaltree.com and let us share your story!

Loyalty Strategies for Businesses with Non-Local Customers

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Our goal is to help business owners reach their loyal customers with an engaging rewards program. However, not every business has a built-in base of loyal followers. Due mostly to location, some businesses cater more to the traveler than the neighborhood customer. These businesses often typified by airports, hotels, or vacation areas represent what we call “Non-Local Customer Base Locations” or NCBL’s.

Although non-local customers present a clear challenge for developing loyalty and recurring revenue, there are many possibilities for engaging non-local customers in a unique and memorable way which can have a significant impact on their value to your business. It’s also possible to gain valuable knowledge about new products or marketing initiatives from non-locals, as outsiders are less likely to give skewed feedback due to loyalty bias.

In an effort to better understand what can make an NCBLs successful, we reached out to the Retail Operations Manager of Green Beans Coffee: Preston Stohs. Green Beans Coffee has locations across the United States and the Middle East, primarily on military bases and most recently, in airport terminals. This provides a mix of locations with very loyal customers (as in the case of their military base locations) and very transient customers (at the airport locations).

For his airport locations, Preston employs a tactic of targeted outreach to those who do have the ability to frequent the business – such as airport employees. He offers standing discounts to airport employees, and hand delivers Green Beans Coffee marketing materials to kiosks and businesses throughout the airport. By turning locals into “crazy loyal local customers” they become brand champions and drive additional business from travelers or other locals without being prompted.

After talking with Preston, we realized that he invests a lot of intentional effort into his loyalty strategy. He pays close attention to sales data and customer demographics at each location. He knows his audience, and plans carefully how to reach them. His strategy is an excellent one for getting the most out of an NCBL, and is the reason why Green Beans Coffee is such a successful LoyalTree business.

We’ve used Preston’s insights, and some of our own through working with a variety of NCBLs, to compile a table of possible strategies for capitalizing on the non-local consumer market. We’ve outlined four possible business objectives, and have provided a breakdown of the loyalty strategy for realizing each one.

The loyalty strategy includes a plan for marketing (how to promote your objective/communicate to the public), rewarding (what kinds of rewards are most likely to help you achieve your goal), and giving points (how to use loyalty points/the points economy within LoyalTree to help you achieve your goal). The table also outlines the ideal business conditions for pursuing each objective.

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What Are Experiential vs. Transactional Rewards?

Sushi ClassAt LoyalTree, we encourage all of our business owners or loyalty program managers to fill their rewards store with a healthy mix of experiential rewards and transactional rewards. Having a good mix is very important for having a successful program so this post is devoted to explaining them clearly and describing the benefits of each.

A transactional reward is when a percentage or dollar amount discount is offered. The actual experience of eating at your restaurant, getting a massage at your spa or shopping at your store stays the same. At the end of a customer’s usual experience, she or he receives a discount.

An experiential reward changes the actual experience of receiving your services. Either a new, unique, personal experience is offered, or the existing experience is heightened in some way. Here are some of our favorite experiential rewards offered by LoyalTree business owners to serve as examples:

– Private Sushi Rolling Lesson at 1000 points

– Name a menu item after you at 1500 points

– Private Authentic Mexican Breakfast for 6 at 2500 points

Experiential rewards and transactional rewards each have ideal uses. Transactional rewards are great for enticing new customers to give you a try, or incentivizing a repeat visit. Transactional rewards can be used to appeal to a younger or lower income demographic. Using a loyalty system that allows you to keep track of and stay in touch with customers who redeem a discount reduces the risk involved with offering a transactional reward to attract new customers. (Deep discount services like Groupon or Living Social can be harmful to your bottom line, and offer no way of keeping in touch with new customers who redeem their coupons. Fortunately, we know of a loyalty system that solves that problem!)

Experiential rewards are great for encouraging loyal customers to save up points, rather than spending their points right away on less valuable rewards. Experiential rewards also tend to appeal to a higher income demographic who are less concerned with saving money and more interested in VIP treatment. Experiential rewards can come at little or now cost to you as a business owner, depending on what you offer (ie: sushi rolling lesson or naming a menu item in honor of a long standing loyal customer). The possibilities are endless! Experiential rewards also encourage organic social media engagement, as your customers are more likely to generate original content about a unique experience than a transactional reward. This type of engagement is great for your net promoter score.

Have some great ideas for experiential rewards? Leave us a comment to share!

Two Lessons from LeBron about Customer Loyalty

LeBronFour years ago LeBron James left his hometown of Akron, OH and his first pro gig with the Cleveland Cavaliers for a sweet deal with the Miami Heat. Cavs fans were devastated, and years of adoration were exchanged for unbridled loathing. Many latched onto the fact that LeBron has a “Loyalty” tattoo on his arm as a source of satirical ammunition.

However, for the duration of his time in Miami, he remained committed to the Akron/Cleveland area, donating hundreds of thousands of dollars to his alma mater. His marketing and business team is comprised of his same buddies from Akron who have been with him for the life of his career. LeBron is a family man who has retained strong ties with a close circle of friends, despite his fame and success. His move to Miami doesn’t necessarily make him a “disloyal” person. On the contrary, his lifestyle as a whole tells the story of a very loyal friend and community member.

There are two lessons here that it behooves businesses owners to take note of:
1) Even people who are incredibly loyal will make a move for a sweeter deal. Be sure the rewards you’re offering actually seem valuable to your customers. If they make you look like a cheapskate, you’ll struggle to keep customers committed. (IE: A 10% discount or less is considered cheap by most customers.)

2) Emotional connection counts for something. LeBron came back to Cleveland, in part, because of the historical and emotional significance of being “home.” Create an environment that feels like home, and you’ll have a much better shot at winning back customers who have been exploring elsewhere. Selling branded merchandise and/or experiential extras (like a private wine tasting for two, for example) is a great way of helping your customers feel like they’re in the family. Also, offering those as rewards for loyal customers is a great way to cultivate a stronger connection.

Bottom line: If you don’t put in the extra effort to keep your loyal customers around, they may leave you for the Miami Heat… or at least: your competitive equivalent.

Coffee is Hot

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The coffee industry is roasting the competition when it comes to building amazingly successful loyalty programs on LoyalTree. There are several reasons for this: coffee is a daily ritual for many people, so current customers are easily incentivized to engage the program as they want to earn points for their daily investment. Secondly, it’s easy to woo new customers in the door, as coffee is fairly inexpensive as far as risky new adventures go.

Although the coffee industry may have some unfair advantages (like selling a legal addictive stimulant), there are things we can learn from cafe culture about how to build a loyal customer base. Coffee shops strive to provide an experience, to be unique. From plush, comfy furniture, to featured local art; from the community bulletin board in the back where you can find a yoga class, babysitter or dog walker, to the friendly baristas that know your “usual,” the cafe-experience itself is addictive! Coffee shops seem to excel in providing memorable customer experiences. People make friends in coffee shops- they go on dates, have job interviews and build their businesses in coffee shops. This friendly, comfortable environment is what keeps people coming back.

No matter what kind of business you own- counter service, full service, food service or otherwise, creating an experience people can’t wait to Tweet about is crucial. Channel the cafe-culture. Be addictive!

 

Case for Coffee

5 Tips for a Stellar Loyalty Program

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The goals for having a loyalty program are often similar: increase revenue, decrease churn, and generate new business! So what’s the difference between a massively successful loyalty program and one that dwindles? Studies show that following these easy steps can be a great way to charm your customers into becoming regulars, and entice them to bring their friends (the single most valuable way to get new business).

1) Offer rewards your customers are excited about. Including a discounted item that is popular vs. a free item that rarely sells well is a great way to give your customers value. If your customers are excited about a reward, they are more likely to use it and more likely to talk about it on social media! Be generous! (Consider offering a popular item that has a high profit margin or an item you are trying to move from inventory.)

2) Be sure the point values are attainable. As a general rule of thumb, customers perceive the “10% rule” to be a fair way of attributing value to a reward. For example, if an item costs $10, it can be earned for 100 points (assuming you are using the standard 1 point= 1 dollar spent formula). Customers may give up on using a program if an inexpensive reward can’t be earned until they cross a 1,000 pt. threshold. Our best programs have a range of “low hanging fruit,” rewards that can be earned in just a few visits (~30 points, depending on average check size), and more desirable/expensive rewards (~250 points, depending on check size.)

3) Experiential vs. Transactional: have a good mix. “Experiential rewards” are more about an experience than a dollar value, where “transactional rewards” are more about a discount. An experiential reward could be a private wine and cheese tasting for two for 1000 points, or a private brewery tour for 500 points. A transactional reward is the more common “$5 off” or “25% off” type coupon. It’s important to have a mix, because more affluent customers are less likely to be enticed by a discount, and more likely to work toward an experience.

4) Surprise them! The only thing better than a good coupon, is a good coupon you weren’t expecting. Research shows that customers are more likely to feel their loyalty program is creating value for them if they receive surprise offers made available only to customers who use the program. The more value a customer feels you are bringing them, the more likely they are to remain loyal!

5) Swag- it’s a win-win. Consider adding swag (hip term of late referring to merchandise sporting a brand’s logo) to your rewards store. It’s a personal touch that makes customers feel even more connected to your brand. Popular items include glassware and t-shirts. It’s great to have loyal customers who are passionate about your brand as a walking advertisement; that’s why we call the swag reward a “win-win.”

There you have it: EATSS! Exciting rewards, Attainable point values, Transactional & experiential offers, Surprises and Swag. A recipe for success!

 

Mercatino – Masters of Promotion: 400 LoyalTree Members in 2 Weeks

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The buzz around Mercatino is electric. The owners of this Calgary-based market and cafe have big plans to promote their new business, and it’s already paying off. They have orchestrated an impressive membership drive averaging 28 new members per day. Their grand opening with LoyalTree isn’t just creating buzz around Mercatino, it’s bringing customers back through their doors–an average of 3-4 times!

 We asked one of the owners, Amit Vadan, what the key to his promotional success has been:

Since the majority of the Mercatino team are smartphone users themselves, the buy-in to sell the program was instantaneous.  Every customer that comes through Mercatino is asked if they are a Mercatino LoyalTree member, and if not, they are walked through how to become a member. The explanation process takes less than 10 seconds.

Take a few notes from the Mercatino strategy book when promoting your program:

  • Get staff buy-in and make sure they mention the program
  • Create a joining reward that people want! (Mercatino offers a free coffee)
  • Use LoyalTree receipt paper and all LoyalTree provided marketing materials
  • Post a message on Facebook, Twitter, and your website about your program

Mercatino understands the long-term benefit of capturing the attention of first-time customers. They know what their customers want and are ready to impress them with a VIP experience they won’t soon forget!

Choosing your rewards

store_iphone5_fadeawayHave you been trying to decide what types of rewards to offer your loyal customers? With the new rewards store built into LoyalTree, you can choose any of the following three types of rewards:

1) Dollar Off Reward

2) Percent Off Reward

3) Free Item Reward

How do I choose my rewards?

To begin with, create a check list of all your high margin items. Use the 10% rule when deciding how many points it should take to “purchase” that item from the store. For example, if your crab rangoon sells for $10.00, make that item available at 100 points or less (this applies if you offer the standard 1 point per dollar system).

Remember to always incentivize saving points. The more points a reward costs the better deal it should be. For example, giving a $20 discount away at 200 points when you have a $10 discount available at 100 points doesn’t incentivize your customers to save their points. Instead give a $25 discount away at 200, and $10 away at 100.

Lastly, remember to include at least one dollar or percent off discount reward. The goal is to reach ALL of your customers. Giving a dollar or percent off allows them to get something that might not be included in the items you are giving away in your rewards store.

Have fun! Contact support@loyaltree.com if you would like to add/change your rewards!