Best of Brand Marketing Distilled is our weekly (or sometimes bi-weekly) distillation of the best of brand marketing and business intelligence. We hope the ideas and articles are fuel for your organization’s planning and success. This week we consider loyalty programs.
Loyalty programs are marketing programs designed to encourage and reward loyal customers. It has become standard fare for loyalty programs to consist of some sort of points card which tracks spending and offers a discount, rebate, a “free” flight or reward merchandise once enough points are accumulated. However, there is no reason that loyalty programs need to all look alike. A well thought out loyalty program can help build a brand; a generic program may simply be a waste of scarce resources. Above all, a good loyalty program should be rooted in what a business’ most valuable customers actually value – whether it is free stuff or reducing their environmental footprint.
Would You Get a Tattoo for a Discounted Sandwich? Keith Norbury, Globe and Mail
This eye grabbing headline sets out the example of an Ohio restaurant chain loyalty program; a customer who gets a tattoo of one of the chain’s sandwiches gets a 25% discount for life. Beyond this unusual loyalty program example, the piece considers the key questions businesses should ask before implementing a loyalty program. Two of the key questions are:
1. Be clear on the benefit for your business of the loyalty program and how you will measure those benefits
2. Determine which customers are the most valuable and design the loyalty program to target them.
Experience Maps Identify Inefficiencies and Opportunities James Torio, UX Magazine
To build on the idea of designing a loyalty program to target most valued customers, businesses need to understand how their most valuable customers experience their solutions. This UX Magazine article outlines how to create a brand experience map to visualize the overall customer experience. An experience map puts you in the customers’ shoes and allows you to consider where to focus resources. An experience map gives intelligence to consider in (i) designing a loyalty program or (ii) potentially deciding your resources are better expended on other parts of the customer experience and not a traditional loyalty program.
(i) Patagonia’s “Buy Less” Campaign May Lead to More Revenue Eric Lowitt, HBR Blog
(ii) Patagonia: Marketing with a mission Simon Houpt, Globe and Mail
Patagonia is earning praise from marketers and, more importantly, praise from its customers for partnering with eBay to help consumers resell their used Patagonia gear through the Common Threads Initiative. The Common Threads Initiative is not about points or gimmicky rewards; it is rooted in reducing the amount of clothing that ends up being thrown away. The Patagonia program is very clever. It is targeted at their most valuable customers who (i) want high quality premium outdoor clothing products and (ii) are environmentally concerned. Taking this into account, the Common Threads Initiative reinforces the high quality durable nature of Patagonia products and, at the same time, it has authentic traction on the environmental front by fostering reusing goods. A more traditional loyalty program – which rewarded loyal customers with “free” stuff or discounted Patagonia gear – would not have had such a high level of customer value fit. As a result, it is a great example of a company building its brand by implementing a loyalty program that aligns with their customers’ values.