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5 biggest marketing budget mistakes to avoid (Infographic) 0

Posted on August 07, 2017 by Rob Petersen

Marketing budget is an area that comes with plenty of advice about what to do. Seemingly everyone has an opinion on the best channels and tactics to invest in to achieve success.

But what about what not do to? Which errors in judgment lead to inefficient spends in the short term and strategic failures in the long term?

To find out, MDG advertising went through recent research reports and analyst evaluations to see where businesses tend to go wrong most with their marketing budget.

Here is what they found as well as in infographic they created, 5 Big Marketing Budget Mistakes to Avoid.

1. Beginning with Bad Data
Every marketer knows that marketing budget planning is both an art and a science. It’s a given that some choices will be based on hunches, while others will be based on knowledge and evidence.

What’s often overlooked, though, is that many of the analysis-driven decisions end up being no better than the guesses. Why? In large part because of poor data quality.

  • Companies believe that 32% of their data is inaccurate, on average (Experian)

This unreliable data, which ranges from imprecise analytics dashboards to major gaps in customer databases, connects directly to bad budget choices.

  • 91% of firms believe that poor data leads to wasted marketing spend (HubSpot)

The effectiveness of your marketing budget is hugely dependent on the reliability of your initial assumptions. It’s impossible to plan for the future without properly understanding the present.

2. Failing to Coordinate with Sales
To be successful, a marketing campaign must help its business. No amount of engagement or buzz matters if there’s not some direct impact on revenue.

Despite that simple fact, many marketers fail to deliver what their partners in sales want.

  • 50% of salespeople are not satisfied with their firm’s marketing efforts (Knowledge Tree)

This disconnect is mainly rooted in two issues: marketing and sales don’t work together closely enough, and salespeople don’t believe marketers’ success is linked properly to revenue.

  • Both marketers and salespeople say the biggest issue separating their two departments is communication (Harvard Business Review)
  • 55% of salespeople believe marketers are not measured by results (MDG Advertising)

A marketing budget should be developed in conjunction with other departments, especially sales. Moreover, each spend should be directly connected to an expected business outcome.

3. Underinvesting in Proven Workhorses
For most marketers, there are a few tried-and-true core strategies/channels that continue to deliver superb results year after year.

A good example of this is email marketing, which remains a cornerstone of many firms’ marketing budget.

  • 52% of marketers say email is one of the most effective channels they use (Digital Doughnut)
  • 91% of marketers say email is essential to content marketing success (Capterra)

With proven workhorses like email, the instinct of many marketers is to maintain or lower spend. After all, if it’s not broken, why fix it?

The flaw in this reasoning is that returns on effective channels tend to diminish over time without continued attention.

Even with an approach like email there are new evolutions—from deeper personalization to richer automation—that can dramatically improve effectiveness. That’s why it’s important to continue to increase investment in what’s already working.

4. Underestimating the Speed of Change
On the other end of the spectrum from the proven workhorses are emerging platforms and formats.

For many marketers, it’s a struggle to see how these new channels can help their business in the near term, so investment gets pushed for a later date.

The problem with this approach is that change increasingly happens very fast and at huge scale. Just look at the seismic shift in advertising over the last decade:

  • In 2007, digital accounted for 8% of total U.S. ad spend and print accounted for 38% (Econsultancy)
  • In 2017, digital is projected to account for 38% of total U.S. ad spend and print for 12% (Econsultancy)

There are any number of fresh technologies that could see similarly rapid rises in the coming years. For example:

  • 2.6 billion consumers worldwide are expected to be using messaging apps by 2020 (Tech Crunch)
  • Revenue from virtual reality and augmented reality products/services is projected to increase from $5.2 billion today to $162 billion in 2020 (Business Insider)

Spending some of your marketing budget on unproven approaches may be difficult to justify, but it’s essential. By embracing what’s new, you’re setting up your team and firm for future success.

5. Evaluating Too Little, Too Infrequently
How can you tell if your marketing budgets are delivering as expected? The only way to know for sure is to evaluate its effectiveness.

This starts with looking at the foundation. It’s not enough to develop a budget and sit back; to achieve consistent marketing success, you must regularly check whether your strategy is sound.

Evaluation, of course, doesn’t just apply to strategy. To make the most of your marketing spend, it’s necessary to also monitor and test execution. Yet, many firms fail to do this well.

  • 70% of companies don’t test marketing campaigns with consumers regularly (Harvard Business Review)
  • 74% of marketers believe their analytics tools could be better utilized and integrated (HubSpot)

The only way you’ll know if your marketing budget is successful is to review both strategy and execution consistently. Ultimately, devoting time and money to ongoing evaluation and testing may be the most important investment you make.

To find out more on how to avoid common pitfalls, check out the full infographic, 5 Big Marketing Budget Mistakes to Avoid.

marketing budget - Infographic

Does your company make or avoid these mistakes? Are you looking for a strategy to achieve success with your marketing budget?

Why Google and Facebook ads dominate. 7 lessons learned 0

Posted on July 31, 2017 by Rob Petersen

Google and Facebook ads

Google and Facebook ads are expected to take 50% of all digital ad revenue worldwide this year; 60% in the United States. That makes Google (who went public in 2004) and Facebook (who went public in 2012) the biggest behemoth in advertising ever.

Last week was a very good week for Google and Facebook ads. Facebook announced it made $9.3 billion this quarter, +45%  compared with last year. Google’s parent company, Alphabet, posted earnings of $26.0 billion in the same time period, +21% from a year ago. The vast majority of all this revenue came from advertising, 87% for Google, and a whopping 98% for Facebook.

What’s changed? What does this teach us? Where is it going?

Here are 7 lessons learned from Google and Facebook ads dominance.

  1. REACH HAS BEEN REDEFINED: Advertisers are flocking to Google and Facebook ads because they reach the most people. There are 1.94 billions Facebook users and 3.5 billion searches on Google every day. “Marketers aren’t going to get fired for hiring Facebook and Google,” said Harry Kargman, chief executive of Kargo, which manages digital marketing for media companies including Time Inc.
  2. BEST RESOURCE FOR BUYING BEHAVIORS: People spend 50 minutes a day on Facebook. On Google, it’s an hour a day on weekdays and two and a half hour on weekends. Six Facebook and six Google-owned apps account for more than 36% of the time spent on mobile. And Google and Facebook know about every click. And, if those clicks lead to a purchase with a credit-card or either platform and anyplace affiliated, Google and Facebook know the buying behavior.
  3. TARGETING IS AN AREA OF EXPERTISE: With all that information, ads can be be targeted by gender, demographics, affinities, topics of interest, time of day, day of week and geography (down to the mile-radius level around a specific location).
  4. DATA IS AVAILABLE AND DASHBOARDS ARE ACCESSIBLE: Data on users and their preferences and behavior is the Holy Grail for most advertisers, and the reality is that Google and Facebook have orders of magnitude more data than their nearest competitors, and more ways to slice and dice it. Google Adwords dashboard are sophisticated, customized and can be linked to Google Analytics to show both ad performance and website migration and conversion activities. Facebook Ads Manager and Facebook Insights can track audience growth, engagement and clicks to conversions as well.
  5. COMPLEMENT RATHER THAN COMPETE WITH EACH OTHER: Although Google and Facebook may appear like a Coke vs Pepsi competition, the two are much more complementary than you might think. Paid search, which has become synonymous with Google Ads, focuses on targeting people based on keywords they search.  Facebook ads reach people looking to find out what others, mostly people they know, are doing and saying.
  6. FOR EVERYMAN TO ENTERPRISE: 41% of small businesses use Facebook. It is estimated over 3,000,000 businesses advertise on Facebook. Over 3,000,000 businesses are also estimated to advertise on Google. Google and Facebook ads have created an ecosystem where both are equally important.
  7. AD SATURATION MAY BE AN ISSUE AT SOME POINT: There is only so much space in a Facebook timeline and so many search pages on Google. Video is one market that Facebook and Google both view as a crucial new frontier. With huge investments planned, the companies are preparing to do to the television advertising business what they have long since done to traditional print advertising: namely, take much of it for themselves. Facebook’s Instagram unit is also becoming a bigger producer of revenue, with video likely to be a big part of the mix.

Growth for Google and Facebook ads are making the future of rivals more uncertain. In the U.S. market, no other digital ad platform now has market share above 5%.

Do these lessons explain the dominance of Google and Facebook ads to you?  Do you need help determining where a digital advertising strategy for your business using Google and Facebook ads should go?

10 myths vs realities about augmented reality 0

Posted on July 24, 2017 by Rob Petersen

 

augmented reality

Augmented reality is the integration of digital information with the user’s environment in real time. Unlike virtual reality, which is often mentioned in the same breath but creates a totally artificial environment, augmented reality uses the existing environment and overlays new information on top of it.

Augmented reality hardware and applications have more uses in transforming the real world than virtual reality. But there is still much fact vs fiction.

Here are 10 myths vs realities about augmented reality.

MYTHS

  1. MOST PEOPLE DON’T KNOW WHAT AUGMENTED REALITY IS: Myth. 73% of Americans state they were “knowledgeable” about the Internet of Things (IoT) and AR markets in the 2016 ISACA survey. This represents a big decline from 83% in 2015, suggesting that the IoT and AR markets are becoming more confusing as they expand with more devices.
  2. IT IS UNCERTAIN WHETHER AUGMENTED REALITY IS FACT OR FAD: Myth. Worldwide augmented reality headset sales could hit $1.2 billion in 2017,  The AR market could grow from to $120 billion by 2020.
  3. AUGMENTED REALITY IS LESS SUSCEPTIBLE TO HACKING: Myth. 77% of respondents in the ISACA survey believe that AR enhancements could make IoT devices more susceptible to data breaches. Events like the Mirai botnet attack, which hijacked IoT devices to shut down major websites, and the surge in data breaches could hurt consumer confidence in the security of their AR hardware and apps.
  4. BIG TECH GIANTS, LIKE GOOGLE AND MICROSOFT, WILL LEAD THE WAY: Myth. 737 AR start-ups are listed on AngelList, with an average valuation of $4.7 million. The three most followed companies are motion control start-up Leap Motion, healthcare start-up Augmedix, and instant language translation start-up Waygo. The most valuable AR start-up is Magic Leap, which was valued at $4.5 billion in February after raising $793.5 million in Series C funding. The start-up is reportedly developing an AR headset, similar to Microsoft’s HoloLens, which projects holographic images onto real-world surfaces. One top investor is Alphabet’s Google, which previously failed to crack the AR market with the maligned Google Glass.
  5. AUGMENTED REALITY STILL ISN’T VERY ACCESSIBLE NOW. Myth. Augmented Reality (AR) is easily accessible for anyone who owns a computer with a webcam, camera phone, or game console with a camera. There are 188 virtual reality headsets currently available on Amazon.

REALITIES

  1. KEY TO SUCCESS LIES IN ITS UTILITY: Reality. Augmented reality is making strides in industries including architecture, marketing, healthcare, military, retail, and tourism. AR enhances the shopping experience by assisting customers finding items in the store, displaying product reviews, and generating 3D models of rooms and furniture making it easier for consumers to visualize. In the tourism industry, augmented reality is optimized to provide additional information on landmarks and museum exhibitions.
  2. AUGMENTED REALITY GREATLY ENHANCES CUSTOMER EXPERIENCE: Reality. For example, the furniture giant, IKEA, came out with an app a couple of years ago that contains part of their catalogue and AR functionality, While IKEA’s application has a few bugs and needs some updating, it’s definitely a step in the direction we hope others will follow. AR shows great potential to revolutionize the online buying experience
  3. WITHOUT REAL UTILITY, AN AUGMENTED REALITY APP HAS LIMITED LIFE: Reality. Niantic’s Pokemon Go, which greatly boosted mainstream awareness of augmented reality apps, hit a peak of 45 million daily active users (DAUs) in one month. However, DAUs plunged to 30 million the following month and continued dropping. Pokemon Go was implicated in “hundreds” of crimes, including robberies, thefts, assaults, and driving offenses. These clashes highlight the serious risks of merging digital worlds with real ones. Niantic was sued for turning quiet parks into crowded ones filled with litter.
  4. MOST PEOPLE BELIEVE AUGMENTED REALITY BENEFITS OUR DAILY LIVES. Reality. 60% to 70% of consumers see clear benefits in using AR and IoT devices in their daily life and at work, according to ISACA. In daily life, 69% believe the tech could help them learn new skills, 62% saw shopping benefits, and 62% see healthcare benefits. At work, 69% see the devices being used for workplace training, 65% think they could be used to improve safety, and 63% think they could be used for product demonstrations. 64% of respondents believe that AR enhancements could improve their workplace by enabling remote participation in meetings.
  5. MOBILE WILL GREATLY ACCELERATE GROWTH OF AUGMENTED REALITY: Reality. The next iPhone will include hardware-level Augmented RealityTim Cook has gone on the record to sing the praises of AR, and Google’s Tango platform and the Lenovo Phab 2 smartphone have already shown how such a system might work. Asus unveiled the ZenFone AR at this year’s CES. The ZenPhone comes loaded with Google’s Tango technology, and Asus CEO Jerry Shin touted the handset in the press, saying, “The ZenFone AR will come with advanced functionality and performance at a competitive price.” Though it’s highly doubtful the ZenFone will displace the iPhone at the top of the smartphone world any time soon, the AR functionality Asus is bringing to market is here to stay, and will be baked in to multiple handsets.

Do these myths vs reality help clear up confusion about augmented reality to you? Could augmented reality be a benefit to your company?

10 greatest growth hacking case studies and their learning 0

Posted on July 17, 2017 by Rob Petersen

growth hacking case studies

Growth hacking is a process of rapid experimentation across marketing channels and product development to identify the most effective, efficient ways to grow a business.

Growth hacking case studies involves outside-the-box marketing strategies used to get the maximum number of users with minimal spend. Growth hacking is particularly prevalent with startups.

A growth hacker is a person whose sole focus is growth. Every decision that a growth hacker makes is informed by growth. Every strategy, every tactic, and every initiative, is attempted in the hopes of growing. Growth hackers experiment, test, and are always pushing limits with unconventional acquisition strategies. The term was coined by Seth Ellis in 2010, the CEO and Founder of GrowthHackers.

What are examples?

Here are 10 greatest growth hacking case studies and their learning.

AIRBNB: Know where your audience hangs out.

growth hacking case studies - airbnb

After raising the initial round of funding, the founders focused their plans to grow the company in an exponential fashion. In the world of internet marketing, it is all about getting traffic from some other platform to your own. The founders understood that Craigslist was one of the platforms where their target audience hangs out. With a very smooth messaging (above), Airbnb encouraged people to share their listing on Craigslist as well. This resulted in exponential growth for Airbnb as their listings were much better (than the regular Craigslist one) in terms of images, structure and appeal.

BEYONCE: Make your own news

growth hacking case studies - beyonce

Beyonce launched in 2013 her new album. Normally when you launch a new album you’ll hire a PR company, pay for advertising, make small intro videos and many other things to increase awareness. Beyonce did not do that. Instead she uploaded her album on Itunes without telling anyone. What happened the next morning? Everyone bought her album. Newspapers, bloggers, social medias were exploding: How can you release a album without any promotion? She actually got more PR and coverage than under a regular album release. The album sales made Beyonce one of richest in the industry during 2013.

BUZZFEED: Understand what engages people and gets shared

 

growth hacking case studies - BuzzFeed

BuzzFeed started as a side project when one of its co-founders was working at Huffington post. The team started getting a hang of why people share content, how stories spread and what makes someone engage with content. One of the first memes that got viral was a girl standing outside a burning house. The look on the girl’s face indicated that she set the house on fire. Over the years, BuzzFeed has evolved its content as the Internet changed. However, at the core, the team knows what makes people click and what influences social sharing.

DROPBOX: Invite a friend

growth hacking case studies - dropbox

After realizing that paid media was costing more than the lifetime value of their customers, Dropbox had to start thinking out of the (drop)box. They decided to start incentivizing customers to refer more business by offering additional storage space. They grew from 100,000 users to over 4,000,000 in a little over a year. Dropbox is valued at $10 billion dollars.

HOTMAIL: Show appreciation

growth hacking case studies - hotmail

Hotmail is one of the most outstanding growth hacking case studies. They started and developed with a slow pace. In some first period, Hotmail executed traditional marketing channels such as radio, billboards, etc. After that, however, everything got much better when a small line was dropped at the end of each email: “PS: I love you. Get your free e-mail at Hotmail”. The small sentence caused their user base to boom and a year and a half later Microsoft bought them for $400,000,000.

HUBSPOT: Educate and help your audience

image-source-ph-creative

HubSpot practices what it preaches for growth hacking case studies. Both the co-founders were focused on building content and tools that would generate inbound leads which could be further converted into paying customers. HubSpot invested extensively in:

  • Building valuable content in the form of blog posts, eBooks etc. for marketers and sales professionals.
  • They launched free tools like website grader and Twitter grader which help you understand your site’s and Twitter performance. Till date, Hubspot has received millions of requests for using these tools.
  • Hubspot also invested in webinars to teach people about marketing and sales.

The conversion rates on inbound leads that came through these efforts were phenomenal. HubSpot began with just 3 customers in 2006 and last year they had revenue of over $271,000,000.

SNAPCHAT: Create a new type of user experience

growth hacking case studies - snapchat

Snapchat creates a new way to communicate with friends that is fun and interactive and different from the other social networks. It creates a sense of privacy through the disappearing nature of the content. Snapchat allows users to send photos and videos to one or many friends, while limiting how long the recipients can see them. The maximum time is 10 seconds, just enough for the recipients to enjoy the moment before it is lost forever. In addition to photos and videos, Snapchat lets users express their creativity by adding text and drawing on the photos. This allows the user to create all types of goofy images and fun things that add to the experience. In 2 years , the company achieved and eye-popping 350 million “snaps” per day.

SPOTIFY: Try before you buy from Freemium to Premium

growth hacking case studies - spotify

Unlike many streaming options, Spotify puts the control firmly in the user’s hands, allowing them to select specific songs and create playlists instead of roughly approximating terrestrial radio by choosing an artist or station and listening to or skipping whatever song comes on, as is the case with Pandora and Last.fm. Spotify has two tiers:

  • Free: Spotify’s free tier is ad-supported, with skip-restricted shuffle and ready-made playlists available on mobile and the ability to choose any song, any time on tablets and computers.
  • Premium: As with a free membership, paid subscribers can listen to any song at any time, only they can do so at a higher bitrate, via their mobile devices, in offline mode, and without ads. A Premium subscription costs $9.99 per month, though Spotify offers a free 30-day trial along with a discounted $5 per month plan for students.

80% of Spotify subscribers began as free users.

UBER: Disrupt the market and fill a huge need

growth hacking case studies - uber

Uber provides a solution to a real problem that impacts millions of people. In all sense of the word they have disrupted the monopoly of taxi cab transportation that exists in many cities and reinvented the experience from top to bottom. The disruption of the market is manifest in so many way for the passenger from: 1) Concept of “ride sharing” vs “taxi”, 2) transportation brought to you vs you having to find a cap, and 3) Ordering through an app vs. traditional means. On the passenger side, Uber is obsessed with customer satisfaction. On the driver side, Uber offer people who are out of work or in need of additional income, a way to make a living.  Uber is valued at $3.76 billion.

WALL STREET JOURNAL: Acquire and activate your audience at the same time

growth hacking case studies - wall street journal

The Wall Street Journal an approach to both acquisition and activation by offering access to free WiFI through 500 hotspots in high-traffic areas in New York City such as Union Square, SoHo, Greenwich Village, Chelsea and Times Square. In order to use the WiFi, a simple instruction is provided which requests “Name”, “Password” and “Job title”. Creating an additional data collection field such as “Job Title”, can help create targeted email marketing for future retention campaigns. Although actual results are not available, the effort has been repeated multiple times as well as expanded to San Francisco.

Do these growth hacking case studies have value for you? Can you apply any learning from these growth hacking case studies to your business? Does growth hacking have a place in your company?

10 best customer loyalty programs and their case studies 0

Posted on July 09, 2017 by Rob Petersen

customer loyalty programs

Customer loyalty programs use principles of rewards, convenience and appreciation to give their customers lifestyle access not available anyplace else.

Most people think of customer loyalty programs as an airline that gives miles to frequent fliers or a hotel that gives points toward a stay or a restaurant that offers a punch card incentive. But the best customer loyalty programs find function delighting customers in their daily lives.

Successful customer loyalty programs have high revenue yields for brands. That’s because:

  • 6X more expensive to win a new customer than retain as existing one (Parature)
  • 5% increase in customer retention can lead to a 25-100% increase in profit for your company.  (Harvard Business Review)
  • 68% of millennials wouldn’t be loyal to a brand that doesn’t have a good loyalty program. (Loyalty Report)

What are the best customer loyalty programs? How to they work? Why to they succeed?

Here are the case studies of 10 best customer loyalty programs.

AMAZON PRIME: Offers selection, convenience and immediate gratification

customer loyalty programs - amazon prime

A list of best customer loyal programs has to Amazon Prime. For $99 a year, Amazon Prime offers not only free shipping, but also other benefits such as live streaming music, movies and TV shows, storage for digital photos and more. Amazon Prime is integrated into its customers life. For the person who takes full advantage of the Amazon Prime membership, the benefits can far exceed the annual fee. And as a result of paying for a membership, the customer will buy more often from Amazon. Amazon also offers apps for its website, music, TV and movies and more. According to a 2015 report from Consumer Intelligence Research Partners, Prime members spend an average of $1,500 per year on Amazon.com, compared with $625 per year spent by Amazon customers who aren’t Prime members.

 

CVS EXTRACARE: Personalizes offers based on buying behaviors

customer loyalty programs - cvs

 

Generating customer loyalty is crucial to CVS’s business. ExtraCare has more than 80 million active members. One out of every four households in the U.S. uses ExtraCare. CVS is able to mine member purchases and demographic data and pair it with internal research (e.g. online communities, surveys) to deliver personalized offers and marketing communications. Mobile is a good way for CVS to bridge the digital and in-store shopping experiences. Customers can download the CVS app to manage their prescriptions, order photos, and see wait times for CVS’s walk-in clinics. The CVS app has more than 19 million downloads.

 

M.A.C. SELECT – MAC COSMETICS: Uses tiers to increase engagement

customer loyalty programs - MAC Select

Estée Lauder’s brand, MAC cosmetics, has a loyalty program, M.A.C. Select. The program, for online shoppers, features three tiers. Tier one: Seduced – to join this tier, you don’t need to make a purchase. You just need to sign up. Perks in this tier include early access to limited-edition products. Tier two: Devoted – if you spend $150 or more in a year, you are eligible for this tier. You get early access to select collections, complimentary express makeup application, enhanced product samples online, and complimentary two-day expedited shipping. Tier three: Obsessed – for those who spend more than $500 per year on products. The highest accolade in the rewards system. As a member of this tier, you get to be the first to shop in certain collections, have first access to new products, two complimentary make up applications, complimentary two-day expedited shipping when you spend a minimum of $50. MAC is the world’s leading cosmetic company. M.A.C. Select keeps customers engaged. The tiers have a pricing structure that motivates customer to move us so they get more exclusive treatment.

 

MARRIOTT REWARDS: Targets key customer segments

customer loyalty programs - marriott rewards

 

Marriott Rewards® wants to increase participation among millennials. Marriott creates the “Year of Surprises”, an ownable event that could easily be duplicated across the U.S. Using a responsive website, advertising, events, video, social media, bloggers and more, Marriott Rewards celebrates its 30th birthday by giving away surprise parties to customers over the course of the year. The results are:  1) 196,909 new Facebook fans (904,000 total), 2) 740 new Marriott Rewards enrollments via social channels, 3) 1,263,710 site visits and 4) 602,334 entries.

 

MY STARBUCKS REWARDS: Offers exclusivity and convenience with state-of-the-art technology

customer loyalty programs - my starbucks rewards

 

Starbucks Rewards is often regarded as one of the best customer loyalty programs. What makes their program so great? 1) Outstanding Mobile Experience. Starbuck’s app makes their loyalty program more interactive and more effective. It is easy to see how many “stars” (points) you currently have, as well as make payments or even find a Starbucks location. 2) Rewarding for Grocery Products. Starbucks was able to expand the scope of its loyalty program by introducing points for purchases outside of their retail locations. Starbucks sells many products outside of their retail locations, including: coffee beans, tea, K Cups, and ready to enjoy drinks. 3) Exclusive Gold Card. When a member of the Starbucks program gets 30 Stars in a 12 month period they achieve “Gold Level” status. This comes with some great perks including: free refills on ice or brewed coffee, free refills on tea, free food and drink offers, and most importantly the personalized gold card.

 

NATIONAL CAR RENTAL EMERALD CLUB: Collaborates with consumers to improve customer experience

customer loyalty programs - national car rental emerald club

 

National maintains a deep, continuous, and real-time connection to customers through Emerald Exchange, a private, online community of loyalty club members. Emerald Exchange members share personal accounts of their car rental experience via photos and videos and serve as an extension of the “on-the-ground” National team. Opinions, ideas, and feedback from community members helps National improve and innovate its programs and services, delivering on the brand’s commitment to providing a superior customer experience. Since launching the Emerald Exchange Community, active Emerald Club membership has increased 27% and National Car Rental company revenue has increased 32%.

 

PATAGONIA COMMON THREADS: Shares customers’ values

customer loyalty programs - patagonia common threads

Patagonia, an eco-friendly outdoor apparel company, realizes that its customer needed more than just points and discounts from customer loyalty programs. In conjunction with eBay, it implements the Common Threads Initiative to help customers resell their highly durable Patagonia clothing online via Patagonia’s website. Patagonia customers pledge to buy pre-owned gear whenever they can and sell whatever they no longer want or need. The collaboration marries Patagonia’s “ironclad” guarantee of durability with eBay, one of the world’s largest marketplaces for clothing and apparel, both pre-owned and new. Nearly 70,000 people have taken the Common Threads Pledge to reduce their environmental impact. More than 57,000 Patagonia items have found a second life in the US and UK.

 

SEPHORA’S BEAUTY INSIDER: Demonstrates personalized exclusivity

customer loyalty programs - sephora beauty insider

With over 10 million Beauty Insider members, Sephora is definitely doing a couple of things right. Here are three of the top reasons Sephora’s loyalty program is so successful. 1) Effective Use of Tiers:  Tiered programs are effective when the upper tiers have a minimal amount of members, usually around 10%. You want your most loyal customer to feel like they achieved something that others could not, and get other customers striving to get there. 2) Rewards Match the Brand and Customer Base. Sephora’s Beauty Insider Program is seen as a high end or luxurious program, and they have created a redemption that reflects that. Instead of using points for a discount, Beauty Insider members can use their points to claim more beauty products at the Rewards Bazaar. 3) Personalized Product Recommendations: A shopper simply inputs hair type, hair concerns, skin type, and other information about themselves into the “Beauty Profile” and Sephora generates recommendations specific to your information.

 

SOUTHWEST RAPID REWARDS: Shows appreciation that’s simple and streamlined

customer loyalty programs - southwest rapid rewards

Southwest Airlines prides themselves on their commitment to customer service and equality by offering a streamlined business model with an emphasis on simplicity and efficiency. RAPID REWARDS rewards customers based on value and profitability has better value proposition for both customer and Southwest. Large scale data migration of millions of members along with their existing credits and flight flown history are collected in a Siebel Loyalty application with minimal downtime. Enhanced tier structure and redemption options allow for improved functionality for A-List members and points rules. New and powerful ways to define ad hoc promotions help further capitalize on Rapid Rewards Program. And there is interactivity with a large number of internal and external applications such as Southwest.com, Reservations, Kiosk, IVR and program partners.

 

WALGREENS BALANCE REWARDS: Creates a level of service that keeps brand top of mind

customer loyalty programs - walgreens balance rewards

 

Walgreens Balance Rewards has more than 150 million registered members and more than 85 million active members, offering both its marketers and its CPG partners a wealth of data. Walgreens has an app that allows customers to refill prescriptions, monitor their orders, pay using their phone, and earn and redeem awards in the Balance Rewards program. Like the Starbucks app, it is a lifestyle app that keeps Walgreens top of mind with its customers. Walgreens’ “Thank You” program is one example of how the brand leverages personalization effectively. Walgreens segments its shoppers into three groups based on their propensity to purchase. Customers with the second highest likelihood to purchase are exposed to placement ads and are given register coupons to help drive awareness. Customers who respond to a targeted campaign have a “much higher” Net Promoter Score than customers who have never seen one or are new to a targeted campaign.

Do these case studies convince you of the value of customer loyalty programs? Are you ready to create a customer loyalty program for your business?

 

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