The Psychology of Rewards

We live at the best time ever to be consumers. Every brand we love and store we frequent wants to reward that loyalty. It seems marketers have figured out the big secret: We humans are just like a pack of dogs, or rather Pavlov’s dogs, and come running for rewards.

Rewards
“Rewards,” Creative Commons license. | Credit: Flickr by GotCredit

We live at the best time ever to be consumers. Every brand we love and store we frequent wants to reward that loyalty. It seems marketers have figured out the big secret: We humans are just like a pack of dogs, or rather Pavlov’s dogs, and come running for rewards.

Extrinsic motivation, or our behavior which is driven by the anticipation of being rewarded by others for engaging in specific behaviors, drives much of the choices we make in life — how we perform our jobs and what products we chose to buy.

And down deep that motivation is linked to what I’ve said before is our greatest psychological driver: our survival DNA. Unconsciously, rewards help us feel like we are getting closer to that place in life where we have what we need to survive the daily battle to fulfill needs and wants that propel us ahead of the pack.

When we get something cheaper than usual, more than what we paid for or something for free, as a rewards program often delivers — in our unconscious minds, we are stronger, better, richer, faster or have more resources than others, and so we are posed to survive. And it’s fun!

Getting rewards is like playing a game we know we can win. We do little things that take little effort on our part and get something back, like a two-for-one deal, a free gift, a big discount on a purchase. Even small prices, like a free car wash worth $10, can spark a dopamine rush. And when we drive out of that “free” car wash, we have a bigger smile on our face than when we paid for a car wash that was just as fast and clean. It’s simple how we are wired.

Loyalty Programs Spark Brain Triggers

Rewards programs have long been successful, in all industries, to spark trial, boost incremental sales and secure loyalty. We eagerly sign up for point programs that can earn us free pizzas, airline tickets, hotel nights and such.

And then really smart marketers came along and let us choose our rewards, like American Express Membership Rewards, that let consumers shop various brands for products purchased strictly through points. And today, marketers are getting even smarter and building apps for rewards programs that cater to the current frenzy and greatest needs of consumers today: instantaneousness.

Ibotta Case Study: Ugotta Love It and UGottaDo It

One of the best examples of a reward program that caters to the psychological state of most consumers today, regardless of there generation, is Ibotta, a young app birthed just five years ago in the basement of a fire station in Denver. It simply helps consumers get rewards, such as rebates and discounts, or loyalty premiums redeemed faster and easier than before. Ibotta allows users to submit their receipts online in order to get instant cash back, which is deposited into their accounts and can be cashed out via PayPal, gift cards or other digital processes, eliminating the “check in the mail” process that seems to take forever in today’s world. Just this past holiday season of 2016, Ibotta at four years old, was the third-most-used shopping app during the holiday shopping period in December 2016, outpaced only by Amazon and eBay.

Its growth has been staggering. Take a look at these numbers:

  • Nov. 16, 2012 — Ibotta app launch on iOS
  • Dec. 18, 2012 — Ibotta announces 100,000 registered users on iOS; announces Android version launch
  • Feb. 5, 2013 — Ibotta announces 500,000 registered users in just under four months
  • May 14, 2013 — Ibotta users have earned $1 million in cash rewards in just six months
  • July 20, 2013 — Ibotta users have earned $2 million in cash rewards

While every stat above is very telling about this successful new business idea and its value to consumers, take a look at the last two bullet points. In just one month, Ibotta doubled its payouts from $1 million in cash rewards earned to $2 million. And this, at just seven months old. This is serous validation as to how powerful the force of rewards is for attracting customers and keeping them actively engaged in what matters most: shopping! And shopping for rewards.

But not all rewards programs grow this quickly. Here’s what Rich Donahue, SVP of Marketing for Ibotta, has to say about the company’s success:

“What we’re focused on at Ibotta is helping consumers live a ‘Life Rewarded.’ Our goal is to make sure that you earn rewards on everything you buy, wherever and however you shop. With Ibotta, you earn cash back and make those rewards count in your life.”

Creating awards around everyday routines and shopping needs has catapulted Ibotta’s growth during its mere five years of existence. As of this past week, Aug. 9, 2017, Ibotta users have earned more than $200 million in cash rewards and a download total of 23 million. On top of that, it’s become the 43rd most-used app in the App Store.

So Whatta? Marketers Ask, ‘What’s in It for Me?’

What does all this mean for marketers today? Alotta!

  • Rewards, small or big, matter — and matter a lot — as they are not just prizes for the conscious mind to get excited about. They are triggers of the unconscious mind, which drives 90 percent of our thoughts and choices.
  • Instantaneousness matters, too. Everything about our lives is instant now … instant access to information via Google searches 24/7 on our mobile devices, which are instantly available as they are in-hand or pocket 24/7.
  • And Choice matters, too. We are long past the days of reward programs for more of a brand’s product and only that brand’s product, and on that brand’s terms, not ours. Brand loyalty programs may have a lot of enrollment, but they get very little redemption. According to a Forrester report, which surveyed members from the Loyalty360 association, only 16 percent of consumers, on average, redeem points from brand loyalty programs. To succeed, brands of all sizes need to take on the Ibotta and American Express approach of letting customers be rewarded for products and services they choose vs. get rewarded with “stuff” they may not need at the moment, if ever.

Conclusion

While I’m not suggesting you expire all of the points your customers have earned with you to-date (there are many cases of this backfiring), I am suggesting you take a look at your system to make sure you are offering choices that matter, and the speed to redemption that clearly matters to consumers today.

If you don’t up your rewards program to fit our psychological need to win rewards that help us up our chances to survive (emotionally, physically, financially, socially and more) and do it quickly, you’re wasting alotta resources of your own. Make your time and effort matter by changing your game to up the fun and fulfillment of the consumers’ game when it comes to getting the best deal and reward. It’s just something you GOTTA do!

Content Marketing After the Sale

If the content you’re creating is aimed only at prospects and leads, you’re missing an important marketing opportunity. Content marketing to existing clients will help you increase revenue and ROI for your content marketing program.

How to Drive Your Customer's Lifecycle to Increase Revenue and RetentionIf the content you’re creating is aimed only at prospects and leads, you’re missing an important marketing opportunity. Content marketing to existing clients will help you increase revenue and ROI for your content marketing program.

First and foremost, paying attention to clients after the sale in ways that appear (to the client) to go above and beyond is one of the best ways to build the kind of emotional connection that creates raving fans and lifelong clients. (To say nothing of killer net promoter scores.)

Second, your prospects aren’t paying attention to what you tell them. Sad, true fact. So even though you know you’ve reviewed with them the full range of your services — and your breadth of expertise may even have influenced their decision to become a client — they don’t remember any of that. They just know they needed X and they hired you you did X, whatever X might be.

Post-sale content marketing is your opportunity to remind them that you also do Y and Z, and that Y and Z are valuable complements to the X already in place.

Finally, your content marketing to existing clients should subtly point out that you and they have both invested a lot in you learning enough about their business to service them well. There’s great value to be leveraged, and most clients recognize that even if their primary focus is on the path of least resistance: keeping your current vendor is almost always easier than vetting and on boarding a new one. The key is to make clear that there’s value beyond eliminating new-vendor hassles.

How? Here are a few ideas:

Research: Set up alerts to follow your client, their biggest competitors, and the industry. You can pass some of this information on as interesting items to be aware of. Better still is news they can use: news along with some insight related to their business.

Some portion of the info you provide should be related to your area of expertise, though you’ll want to be careful to stay well clear of the line between “news they can use” and “news which helps me sell them more stuff.” Out-and-out promotion wrapped in content marketing — or anything else — gets old fast. And don’t discount the fact that offering information completely unrelated to what your firm does makes it crystal clear that you’re paying attention to their company and their industry.

Post-sale content marketing should also be viewed as a long-term commitment, not only in it being an effort you’ll need to make over a long period of time, but in it being an opportunity to point out future possibilities rather than current needs. Again, this can help you show that you’re paying attention to their needs.

And that’s probably the key point to be made here, as in all content marketing: the client’s needs.

One last note that is often overlooked: Your champion at any given client isn’t always going to be there. So make sure your content marketing includes materials that he or she would be comfortable passing on to peers and superiors. You want to expand your reach and win more champions inside the firm, if not for increased sales today, then to maintain existing sales in the future.

Telemarketing: The Impossible Tradeoff

One of my Brazilian colleagues, Roberto Silva (not his real name), was a frequent traveler to the U.S. on business and for pleasure. He had a daughter at an American university and he visited her whenever he could. He also liked buying things at specialist outlets and, a few years back, had bought some trousers (which became his favorites) from Lands’ End.

Call center agentOne of my Brazilian colleagues, Roberto Silva (not his real name), was a frequent traveler to the U.S. on business and for pleasure. He had a daughter at an American university and he visited her whenever he could. He also liked buying things at specialist outlets and, a few years back, had bought some trousers (which became his favorites) from Lands’ End.

With his wife reminding him regularly that these favorite trousers were wearing out, he decided to buy some new ones on his next trip. From his New York hotel, he telephoned Lands’ End and introduced himself to the cheery telephonist who welcomed him back to Lands’ End. A moment later, she asked him about his daughter, how she was doing and if she had graduated from college? Stunned, he asked how she knew about his daughter and she said that the last time he had called, he had mentioned that as the reason for his visit. What could she do to help him?

She asked how he liked the trousers he had bought before. He replied that if they still had them in stock, he’d order two more pair. “Can we ship them to the same hotel you stayed at last time? We can have them to you by tomorrow evening,” she said. Of course he purchased them and some other items and when he told me the story he said emphatically: “I’ll never buy trousers like these anywhere else. There are warm, friendly people who work there, not a telephone bullpen staffed by bored and underpaid, out-of-work actors. These people obviously enjoy talking to customers and seem in no hurry to get you off the phone and you don’t have to listen to endless menu options and punch in some numbers to get someone to talk to you.”

Perhaps that’s a rather long way around to introduce the “impossible tradeoff,” the obvious cost-saving of having an automated system interact with the customer up to or beyond the point where he or she either needs or demands to talk with a human being, vs. a totally human interface which may be less efficient in terms of costs, but is more likely to have customers become “advocates,” as my friend Roberto had. Can you imagine someone saying how happy they were only having to make four menu options instead of 10?

Banks and credit card companies seem to be in competition with mobile phone operators to win some prize for making it difficult to talk with anyone (and making you wait the longest time if you want to). Internet sellers are often even worse, hiding their telephone numbers in the most secluded nooks of their websites. The recent United Airlines disaster of dragging a passenger off of a flight to free up some oversold seats is a horrible example of how a focus on efficiency (in this case, maximum passenger loads created by intentional over-booking) can undermine customer loyalty. After that incident, it will take a long time before anyone is ever “loyal” to United again.

The ultimate question is one of relative value. And despite all of the big data in the world, there really is no way of gauging accurately the relative value of the tradeoff. How strongly the customer feels about the transaction must be an important if unquantifiable (soft) data point.

The bean-counters will assure you of the obvious saving; machines are, in the long run, cheaper than people. They work 24/7, they don’t demand raises and they don’t need pregnancy leave. Then they will argue that customers are better-served, get to speak to the right knowledgeable person faster than explaining their problem over and over again — or better, have it dealt with without human intervention. Not so for my friend Roberto, who will counter that his loyalty and the loyalty of many like-minded customers will more than make up for the savings in long-term revenue and insulation against “efficient” competition.

So where do you draw the bottom line?

It’s always a tradeoff compromise (the best solution or the worst). But I would opt for an automated answer which, first, thanked the caller for calling and second, offered a choice of:

  1. Immediately talking to a warm, friendly and knowledgeable human, or
  2. Hearing a short menu, which may speed you to the answer you are looking for.

Unfortunately, a “right” answer is impossible.

 

Endit …

Engagement, Loyalty and Sharing Superior Experience

There’s one element of loyalty I might add that should not be overlooked: the immediacy of sharing … good and bad. But for once, let’s look at the good side of experience sharing:

customer loyaltyNext month, hundreds of marketing professionals will gather in New York to fete numerous business leaders in our field at the EDGE Awards (June 6, this is Marketing EDGE’s only national fundraising event).

Among the honorees is Hal Brierley, who recently discussed how the loyalty business hinges on meaningful engagement. It really doesn’t matter what generation you are, if a brand is not engaging its stakeholders, there can be no loyalty, right? Says Hal, “In my mind, what the consumer wants is simplicity and immediacy of rewards.”

The rise of “Zombie Malls” also says something about loyalty. The future of retail may very well depend on who can best engage, who can deliver an experience, who can reward — and how will these tangibles and intangibles manifest.

But there’s one element of loyalty I might add that should not be overlooked: the immediacy of sharing … good and bad. But for once, let’s look at the good side of experience sharing:

I was in Saks Fifth Avenue’s flagship store last week, midday, and on the main floor — and I thought I was in a museum. Quiet. Attentive salespersons aplenty. But hardly a shopper in sight, back among the high-end jewelry counters where I entered the building. When the elevator door opened on the shoe department, eighth floor, it was the exact opposite — a beehive of shoppers everywhere, and it seemed to be multi-generational. (Sak’s calls its shoe department, “Shoes 10022” and I’d say it’s a destination.) Maybe shoes lend themselves to physical shopping – simplicity and immediate rewards – you walk in, try them on, buy them and walk out. There was scarcely a single customer, they were in groups — this was a social shopping phenomenon.

Remote shopping, courtesy of Amazon and others, can replicate shoe-buying well enough, but even a brand like TOMS, which started online, quickly expanded to retail distribution to achieve scale. But scale doesn’t equal loyalty. I wear TOMS partly because of the social responsibility tie-in, and they’re comfortable. I’m part of a community of TOMS wearers, instantly recognizable by the heel. I know Adam Ruins Everything – so I get it, but there’s still plenty of kids in the world that appreciate a free pair of shoes, and profit isn’t evil. Affinity is tribal by nature.

Take the perfect cup of coffee … Liz Kislik’s quest for a “quality” latte is both funny and a tasteful lesson in a superior customer experience. Sometimes we’re punished when we wander from our tried-and-true. Simplicity and a 90-minute delay in rewards appears to have sealed the deal for her — but I loved the way she blogged about it, too.

So as digital transformation disrupts, killing business models and creating new ones, what can a brand do? Keep it simple, delight the customer, and reward early and often — your customers will evangelize for you.

Why Your Marketing Falls on Deaf Ears and Blind Eyes

Creating the right framework so what your customers see is what you want them to see is not an expensive or long-term endeavor. It’s simply a matter of doing your research to see what they see now, determine what you need to do at all touchpoints to create the vision you want them have, and create a culture within which positive experiences are framed at every touchpoint, every day.

DNC telemarketing robocalls“Now you see me, now you don’t” isn’t just a great line from one of my favorite movies, (“Now You See Me”), it’s a critical peek into the mind of consumers and what drives them toward your brand, or fast away from it.

We humans are editors at large, everywhere we go and with every purchase we make. We edit events, experiences, and observations to fit our perspective and view of the world. If we don’t want to accept something, we simply don’t. Just take a look at your Facebook or Twitter feed. If you are a supporter of either Trump or Clinton, you simply don’t see or accept any of the accusations about their character, tax payments, email servers or conflicts of interest. You clearly see all of these issues and more about the one you don’t support. Why is this so?

Psychologists sum it up as WYSIATI — “What You See Is All There Is.” If something, even as powerful as scientific evidence, doesn’t fit our view of the world, adhere to our value set, or wish list for the life we live or values we support, then it simply doesn’t exist. We can erase all of the data or clear evidence that doesn’t validate what we “see” or want to see. For example, most Americans state they believe in science and that scientific procedures produce positive and real results. Yet they only believe the results they want to believe. Pew Research shows just how strongly WYSIATI applies to social and environmental issues in our world today. Recent surveys show the big gaps between what science shows through validated processes and what we the people believe:

  • GMOs Are Safe: 88 percent science, 37 percent public
  • Vaccines Are Needed: 86 percent science, 68 percent public
  • Climate Change Is a Real Threat: 94 percent scientists; 65 percent public
  • Humans Are the Primary Cause for Climate Change: 87 percent scientists; 50 percent public

The same applies to brands. We see it all of the time. We read a bad review, have one bad experience, hear a story about a product failure or recall, and it’s all we see then and in the future for years to come. Our smartphones are a great example. Forbes evaluated the iPhone 6 against the Samsung S7 and for eight out of 10 features, such as the camera, screen readability, battery and more, the Samsung outperformed the iPhone, yet 88 percent of iPhone users won’t switch. Our loyalty to a brand that has made us feel current, innovative, connected and even cool, makes us blind to the superior functionality another brand might offer for the same features and tools.

Our ability to see only what we want to see spills over into all aspects of our life. When in high-focus mode, we don’t see distractions around us, and when in high-loyalty mode, we don’t see competitive reasons why we should switch brands for the products we use daily.

Scientifically, this is called perceptual narrowing. Our brains are like big galleries of picture frames. We have a frame, or compartment, for our various beliefs and vague systems and we only believe what is in that frame which is created by our culture, upbringing, religious and social values, and experiences in life. When we hear something about a politician, our religion or a brand we love, whether we believe it, accept it and act on it is largely determined by what is the “frame” associated with that given issue.

For marketers, this is the key to why building experiences that create positive attitudes, oxytocin or “love” rushes, and dopamine highs that result in anticipation of rewards and personal achievements can make or break your sales. Customers keep coming back to brands that get bad reviews from consumers, and to brands that get good ones, if their frame contains a positive view of themselves in your world.

Experiences that put customers in stories that fulfill their aspirations, solve their problems, simplify their lives, increase happiness or trigger feelings of self-worth, are experiences that create frames full of brand joy, loyalty and evangelism. To create these frameworks, we marketers must create a holistic approach to the customer experience, including:

  • Products: Do they do what we promise they’ll do in our communications?
  • Service: Do we put customers first and validate their viewpoints, forever and always?
  • Experiences: Do we guide them on productive journeys that get them to the destination quickly, simply, affordably and with a smile on their faces?
  • How Do We Use CRM and CX Technology to Communicate in Real-time? Solve issues before they become part of the “frame” toward our brand, and proactively communicate ideas, opportunities that benefit them before us?

Creating the right framework so what your customers see is what you want them to see is not an expensive or long-term endeavor. It’s simply a matter of doing your research to see what they see now, determine what you need to do at all touchpoints to create the vision you want them have, and create a culture within which positive experiences are framed at every touchpoint, every day.

Believe any of this? Read my sources and if you still don’t believe me, you’ve just validated everything I’ve just said.

Wells Fargo Fiasco: The Downside of Upselling

If the recent Wells Fargo fiasco is any indication, the sales and marketing culture at Wells Fargo (and many other financial institutions) should be taking an abrupt left turn — and none too soon. As a long-standing Wells Fargo customer, here are a few ways they can ensure my continued loyalty:

wells fargo upsellIf the recent Wells Fargo fiasco is any indication, the sales and marketing culture at Wells Fargo (and many other financial institutions) should be taking an abrupt left turn — and none too soon.

Early in my career, I was working for a large financial services company and we would have long strategic planning sessions on how we might be able to generate new accounts through in-branch and direct mail upsell and cross-sell techniques. Applied for a home loan? Since the bank ran a lengthy credit check, why not offer a credit card to help furnish that new abode? Carried a higher balance in a non-interest bearing checking account? Push the customer to add a savings or money market account to their portfolio.

The ideas were endless, and we were all measured by our success rate: the number of net new accounts each month. Luckily, no one ever pressured me (or anyone I knew) into doing anything even remotely close to the fraudulent behavior Wells Fargo is accused of perpetrating.

But that said, why did Wells take a simple cross-sell / upsell concept, “you want fries with that?” and turn it into a high-pressure sales mandate? Aside from the obvious greed-based factor, Wells forgot some of the loyalty basics I learned many moons ago.

As a long-standing Wells Fargo customer, here are a few ways they can ensure my continued loyalty:

1. Treat me with respect, concern and understanding, and I’ll be loyal for life: You don’t need me to own eight products in order to remain loyal. If you have my checking account and I make regular electronic deposits of my paycheck, you’re my primary bank. If you can help me with anything, it’s figuring out why the ATM will NOT take the 10 checks I try to deposit collectively after carefully ensuring they are all lined up together EXACTLY as the instructions indicate, but spit them back every single time.

2. Play fair: When I call occasionally with a complaint, stop and really listen. Show some empathy and be willing (and ensure your front line is enabled) to waive a fee here and there in order to make amends. Sometimes it is actually YOUR mistake, and if it’s not, show me you understand that we all make mistakes now and again and waive the fee anyway.

3. Be helpful. Truly helpful: If I want you to “review my accounts,” I’ll ask. Don’t offer every time I step into the branch or try to make a large deposit. It does feel intrusive that you know my balances or if I’m overdrawn while I stand in front of you like a dope.

4. Give me online security questions that I can actually recall the answers to: First pet’s name? Well, I owned a dog and a cat and who’s to say which one I was thinking of at the time I filled out the form. Where I was born? You mean the city? Or the city and county (since I was not born in the US, perhaps, you could be more specific with the question)? Mother’s maiden name? (While this was not a challenge for me, a colleague noted that she was adopted and couldn’t remember if she supplied her birth mother’s maiden name or her adopted mother’s maiden name … yes, really). And yes, I have been locked out of my account for not knowing a few of these off the top of my head.

And one more thing — can you pay a little higher interest rate on my funds in your care? I think you’d have a bit more to give if you didn’t give one of your most senior employees a $124 million payout.

Scrappy Soccer Girls Teach a Critical Loyalty Lesson

More than anything, we marketers must learn the power of creating a team with our customers, and executing on every level — sales, service and customer support.

Jeanette blog, team pic: COPA Girls #1 2016 hugThe girls on the sideline were pacing, biting their nails and glancing at the competition warming up on the field. It had been their dream soccer season, and now it was all on the line. A handful of scrappy girls with little experience had formed a team in a local community league and had surprised all who knew them, even themselves. They were playing championship finals for two different age groups on this hot Colorado day.

With barely enough girls to field a team, they had invited three girls from the local travel soccer club to join their roster. Most spectators expected those three club girls, all starters on the top team in their community, to run circles around their less experienced teammates and dominate all of the games. But instead, they did just the opposite. They didn’t constantly hog the ball to see how many goals they could rack up, only pass to each other, or get frustrated when a teammate lost the ball or missed her mark. Instead, they cheered for their teammates, passed to the open player no matter who it was and encouraged the other girls with little focus in life to shoot, take risks and see what they could do. They celebrated every effort.

Off of the field, they chatted together about their goals, dreams and challenges. They became friends. On the field, they beat every team, except last year’s champions who had recruited three of the best players from another club team to help them win again. Now they would face them twice in one day for the two championships. They were nervous and intimidated as the reigning champions lined up. These girls wanted the title for themselves and their coach, a young minority mother who was struggling like their own parents did.

In Game 1, they started off timid, falling behind 0–1. Just after half time, they scored. Confidence came back and they played like never before. They ran, rushed, headed, blocked, stayed on their marks, talked and passed to each other, cheered each other on and won, holding the other team to only penalty points.

Game 2 was an hour later. Hot and tired but fired up from their surprise victory, they took the field, trusting and believing in each other. They were up 2–0, again holding off some of the community’s top scorers who didn’t get the power of “team.” Those other recruited girls refused to pass to their less experienced teammates, blamed them when they themselves lost the ball or got a shot blocked. When they couldn’t score, they suddenly kept falling down by the goal, “injured,” getting free kicks just to recover miraculously after the easy goals, which enabled them to tie up the game and take it to penalty kicks.

The pressure was intense. Winning this second game was just as important to this team who were also fighting for their coach’s chance to shine and get her dream job with the local club. The goalie took her spot, feeling the heat and the heart for her team. She bounced up and down with the shrewd focus of a pro. And she did it. She blocked penalty kicks with a single fist, lunging, stretching and reaching heights she never knew she could in order to give her team that second victory.

Stunned, these girls kept asking themselves if they were dreaming. They weren’t. They just learned and taught all of those who watched them some of life’s greatest lessons that apply to both our personal and business achievements. They learned what happens when groups come together — sports teams or customers and brands — and get behind common goals, treat each other with dignity and patience, celebrate each effort and, most importantly, become trusted friends.

Customer Loyalty: Obligation or Happy Marriage?

Consumers cheat on brands in many of the same ways lovers cheat. If you don’t like your spouse, or are bored with pillow talk or household conversations, you can easily go online and “meet up” with someone new behind the closed doors in Skype, Facebook or any other online “chat” room. Pretty much the same way we hook up with new brands.

cheatingNews Alert: Marriage today has reached an all-time high and all-time low. According to research referenced in a recent Time magazine article, married people describe marriage as “more satisfying or less satisfying” than any other generation ahead of our time, meaning the degree of happiness or the opposite is higher than ever.

The author of “30 Lessons for Loving,” Karl Pillemer, also referenced in Belinda Luscombe’s Time magazine article, sums up marriage as “really, really hard work” and a “commitment device”-like a program or system that locks people into situations they may find dreary or inconvenient in order to achieve a goal or reward later on. For some, those temporal states of dreariness or inconvenience are worth it as the good outweighs the bad in the end. For others, it’s not worth even the slightest bit of dismay.

Not hard to see where I’m going with this, but it is important to ponder.

Consumers cheat on brands in many of the same ways lovers cheat. If you don’t like your spouse, or are bored with pillow talk or household conversations, you can easily go online and “meet up” with someone new behind the closed doors in Skype, Facebook or any other online “chat” room. Pretty much the same way we hook up with new brands. Without social listening devices to help identify those who are happy with us vs. frustrated, and who are “chatting” with our competitors, we brand marketers are set up to be the “last to know” — and often, it’s too late to repair the damage.

With all the alternatives for just about any product and brand these days, and the easy access to new flings, making your brand experience a “marriage” worth enduring vs. “easy to replace” is critical, no matter what business you’re in. The divorce rate for marriage is about 50 percent, and according to reports on loyalty by various research firms, that’s roughly the same percentage of customers who stay loyal to brands these days. Accenture puts the customer loyalty rate at about 48 percent, indicating that 52 percent have switched brands due to poor customer service. And around 30 percent of customers switch just for fun, which makes it that much more “fun” for brands to secure lifetime value.

Growing apart is one of the top five reasons marriages fail. And yes, it’s a big reason why many brands lose around 40 percent of their customers every year and have to spend their valuable time and resources rebuilding their base vs. enjoying their profits.

With all the attractions out there luring customers from one brand to another, and all the demands and high expectations customers have today, is there really a way to keep marriages between consumers and brands alive?

Yes. Here are just a few ways to help assure you and your customers can celebrate many anniversaries ahead.

Listen

Many sources reporting on infidelity, from Fox News to WebMD, state that women cheat because of loneliness and a need to feel emotionally connected to a man, and of course, to have someone listen to them. Customers are really no different.

According to statistics on customer loyalty compiled by Access, a report by Apptentive shows that:

  • 55 percent of consumers out there are likely to switch to another brand if their feedback or needs are being ignored by a current brand they patronize.
  • 97 percent say that they are somewhat likely to increase their loyalty to a brand that listens and acts on their feedback.

Creating dialogues with your social media rather than monologues you hope they’ll “like” and “share” or “heart” and “retweet” is more than just good social manners. Per the above statistics, it’s critical to long-term commitment and sustainable revenue.

Engage

Engagement is not just about putting a ring on it! It’s about interacting with customers in meaningful ways that spark those warm fuzzies when we feel noticed, appreciated and connected with someone who has like values and seems to like us, too. By engaging with customers in ways that allow them to speak and be heard, and providing them with experiences that enable them to be part of the brand via user-generated content, applications, events or more, customer loyalty can soar.

Just look at the video game industry that now generates about the same revenue per year as Hollywood’s film industry. Gamers love to generate ideas for the games they play, attend their events in full costume to represent their favorite characters and avatars, and they bring others to their virtual worlds as they evangelize in ways that rival the success of even the best of religious missionaries.

Engagement does not just pay off in terms of keeping customers loyal and referring others, it pays off in increased transaction value, too. Cap Gemini research shows that fully engaged customers are worth at least 23 percent more in revenue and profitability than other customers. This same research shows that actively disengaged customers — who have chosen to find new relationships due to negative feelings — represent at least a 13 percent drop in share of wallet, profitability and revenue due to spreading bad vibes about a brand. With how quickly we can share our bad experiences via social media, this is a pretty serious issue facing all brands.

Customer ‘Loyalty’ — It’s Never a Sure Thing

As “Data,” “CRM” and the “Customer Database” continue the march toward the center of the marketing organization in tens of thousands of businesses, not surprisingly another “classic” marketing concept is rather “new” again — customer loyalty.

CRM keyAs “Data,” “CRM” and the “Customer Database” continue the march toward the center of the marketing organization in tens of thousands of businesses, not surprisingly another “classic” marketing concept is rather “new” again — customer loyalty.

Customer Loyalty: Where to Start

The right place to start in your consideration of customer loyalty and creating a loyalty program is simple, and yet relatively often, rather overlooked.

A simple question we ask when discussing the “loyalty” dimension of customer experiences and the customer data they produce goes something like this: What does success look like when you implement a customer loyalty program?

The answer to that varies — but the worst answer is “nothing.”

“Nothing” is never determining what the end in mind should be for your customer loyalty program in the first place. When organizations invest in defining the outcome they seek, they are roughly 20 percent of the way to success. As the axiom goes, “If you spend 90 percent of your time defining the problem, you’ll solve it in 10 percent of the time.”

What Can We Expect From Loyalty Initiatives?

So what should we expect from a customer loyalty program? Here’s a partial list we’ve heard from the brands where we’ve used customer data to inform and improve customer loyalty:

  • You keep those customers longer
  • You generate more social referrals
  • Those customers buy more often (frequency)
  • They are less sensitive to pricing and increases in particular
  • The cost of customer acquisition can actually be lower
  • Exchanges and returns decrease “naturally”
  • You recognize profit growth

These are all very real outcomes you can expect from a high-quality customer loyalty program built around your unique customer and your business.

How Does Loyalty Really Work?

This is the best question to ask. Most organizations I’ve worked with on managing a customer base (customer database) to drive business performance begin with a gold, or black card, a name for an elite club or a space they will convert to lavish “loyal” customers with attention.

13 Ways Direct Mail Works Best

Direct mail can be a very powerful marketing tool. When executed correctly you can see a great return on your investment. Usually we focus on what not to do since there are so many pitfalls with direct mail.

Direct mail testDirect mail can be a very powerful marketing tool. When executed correctly you can see a great return on your investment. Usually we focus on what not to do since there are so many pitfalls with direct mail.

However, this time we will show you how and when direct mail works best. This is not a guide on what format your direct mail should be in, such as postcards versus letters, but instead about ways to use direct mail that work best.

Here are the best ways to use direct mail:

  1. Generate traffic to a location, a website or event: When you want to direct customers/prospects to a store, event or online location, direct mail is a great way to do that.
  2. Generate sales leads: You can target and reach qualified and interested leads easily with direct mail.
  3. Counter a competitive offer: Reaching out to customers and prospects that have received an offer from a competitor with and even better offer through direct mail gives you a chance to acquire the sale without the competitor knowing about your offer. Unlike online offers direct mail has some secrecy to it.
  4. Customer loyalty: Reaching out with direct mail to customers with special offers and giveaways is a great way to reward your customers.
  5. Customer acquisition or referrals: Include these in your direct mail as a way for your message to be passed on to friends and colleagues. Providing a recommendation to others is a powerful selling tool.
  6. Improve customer service: Sending a thank you note to your customers is a great way to make people feel appreciated.
  7. Cross sell or upsell: With variable data printing you can mention other things you offer that they may be interested in based on what they have already purchased. This can give you a great ROI boost.
  8. Announcements: Since direct mail it taken seriously it is a great way to get important information out to people quickly.
  9. Augmenting other media efforts: Direct mail ties in with so many other channels like email, web, social media, mobile, and so much more…
  10. Improving sales efficiency: Sending out direct mail that helps to qualify and clarify people before you sell to them is extremely important.
  11. Catalog, custom publications or newsletters: Each of these types of direct mail give you the ability to showcase new information or offers to the people most likely to buy from them.
  12. Combining mailings with other companies: Think value added or coupons for this option. Co-branded mailings work well when each brand has the same target audience.
  13. Building brand awareness: Direct mail is the most trusted form of marketing so using it to strengthen your brand is important. Remember the more they know your brand the more they buy from you.

Direct mail is more effective now than ever before. With less volume in mail boxes and ways to integrate direct mail with online and mobile content, there is now a bigger ROI for you to go after. When used as part of a multichannel campaign direct mail can significantly enhance your response.

Out of the 13 methods listed above what two could you start to use better right away? When you take the time to focus on what your customers and prospects need, you can better target your offers to meet them. Be the offer in their mail box that they could not wait to respond to!