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.

Loyalty Strategies for Businesses with Non-Local Customers

nonlocals

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.

table (2)

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!

The Impact of Loyalty

The following case study shows some recent data we’ve uncovered about the impact of driving revenue via loyalty programs. Amazingly enough, the majority of LoyalTree businesses pay for themselves within the first  30-60 days and begin to generate 2-4x more revenue than their cost!

impact_of_loyalty

A Cut Above The Rest

treesLoyalty programs are gaining a lot of attention these days. With nearly $50 Billion in rewards offered each year to the consumer, the market is getting bigger AND more complicated. LoyalTree is different because we built our business on the needs of the merchant. Making a loyalty program easy to use and easy to implement is our mantra. If it adds time or undue complexity to your business no one will want to implement it, paralyzing adoption and wasting valuable time. LoyalTree has an integrated solution that allows the customer to get points for their purchase without any added steps. Many of our competitors require their customers use another piece of hardware to properly distribute points–this adds a significant amount of time to each transaction and interferes with employee efficiency.

People making the switch to LoyalTree are eager to have a solution that does everything itself.  So do right by your staff and reward your customers with an easy to use LoyalTree program!

The Power of a Lady Slipper

wateringflowers_smallTuesday, 9:43 a.m.

Patches begins yowling for his breakfast just as Susan Meyer remembers that the wash needs to be flipped, and it is garbage day. But just as she opens the washer lid the familiar chime of the doorbell reaches her ears… It’s a delivery! –a delivery for Susan from Morrisville Florists.

The red clay flower pot contains an unusual looking green shoot with an unopened hanging bud. The enclosed note and picture say it is the rare and fragile “Lady Slipper.” Along with the flower pot there is a coupon for three “flower seed packets of your choice.”

The personalized gift interrupts the morning flurry of chores and goes straight to the wall where she keeps her treasured plant collection. It looks perfect. There may be swim meets, dinner invitations, and loads of laundry this week, but Susan Meyer will still make a trip to Morrisville Florists to pick up her free seeds and say “thanks.”

Surprise & Delight

This business has expertly connected with their customer. The gift was personalized, unexpected, and timely. It was something that Susan wanted.  Because the gesture was delightful and surprising, word of it will probably spread to other shoppers as Susan tells of the latest addition to her kitchen flower collection. The Bottom Line: the free “Lady Slipper” and flower seeds have refreshed Susan Meyer’s focus on her hobby and won her future business. Now she will most likely visit the location more frequently and spend more money there.

A Personal Touch

Not all businesses sell flowers, but the principles are the same across almost all industries. Personal connection is key to the success or failure of the vast majority of companies, large or small. Consider the monstrous insurance company, State Farm, that strives to brand itself as your very own “good neighbor.”  A good neighbor knows you, they are loyal, they are trustworthy, they are part of your life… obviously customers know businesses are far different from their friends and family, but trust, loyalty, and thoughtfulness in business are highly appreciated nonetheless.

How to Connect

The question is how to know who your customers are, what they like, how to connect with them, and how to become part of their life in the modern business environment?  Modern technology allows you to learn exactly who your consumers are and what is important to them. You can find out what they want, when they want it, and give it to them simply and easily.

Your Business?

Modern solutions may not be as quaint as the example of Susan Meyer and her “Lady Slipper,” but they can be just as effective. Do you know who your customers are and what is important to them? What have you given them lately? –a flower pot? one of your delicious appetizers? a free T-shirt? LoyalTree specializes in helping you strengthen your customer relationships one gift at a time. We work to make mobile customer rewards programs as simple, fun, and intuitive as possible. How can you connect with your customers? Get in touch with us to get started.

Social Media and LoyalTree

LoyalTree SocialLeverage your social media presence through LoyalTree to turn customers into advocates and create word-of-mouth buzz to grow your business.

Half of all American adults use Facebook*, with an average friend count of 190*. Meanwhile, Twitter has more than 200 million active users*. Allow satisfied customers to spread their experiences with your business through their social networks, and the reputation of your business will grow.

Get new fans.

Since the LoyalTree app connects directly to Facebook and Twitter, your advocates can easily share their rewards with their friends. When your customers share their rewards, you’ll attract new members to participate in your loyalty program. You’ll also spread news of your business to potential customers who may not have heard of you before.

Incentivize your customers to action by gifting them points or rewards for their shares, making them more likely to do it. People trust the recommendations of their friends, and those recommendations are happening online. Increasing your internet visibility ensures that people will be talking about your business, and coming in to visit!

Start the conversation online, and continue it face-to-face.

Bring followers from your social media community to your business by running a promotion. LoyalTree will work with you to create a special code or keyword that rewards your fans for engaging with you online. When customers see the code on your social media pages and enter it into the app, they might get +10 bonus points, or a bonus 5% off reward, for example. Offering something special for engagement increases interest in social media channels, giving you a platform to connect and converse with your customers. Plus, once people have a reward in hand (or, technically speaking, in phone), they’ve got an extra reason to stop into your business!

Spend your time and money wisely.

analyticsImprove your marketing efforts by using LoyalTree analytics to measure and improve your online outreach. Track code and keyword scans to see who you’re reaching and where. Track redemption of rewards to measure how your social media outreach is bringing traffic into your store, and how much revenue your efforts are generating. After reviewing your analytics, you can determine how to adjust your strategy to better reach your audience, and make the best use of your time and marketing dollars.

Use your loyalty program to connect with your customers online (and offline) to build and strengthen your community and customer base. Email us to get started with an online promotion today!