Tribal Branding: Know Like Trust Series

This post is the final installment of the 3-part series on how to get customers to feel that they 'know, like and trust' your brand. The series was motivated by the need to create social media management (SMM) strategic content pillars. I think that, if I applied the 3 target behaviors / feelings to top, middle and bottom funnel positions, each one would apply in that order; ie 'know' will apply to the top, 'like' to the middle and 'trust' to the bottom. ... or depending on market needs, like when an unknown brand faces a huge challenge of gaining trust in expertise regarding a high-stakes problem, 'trust' and 'like' may overlap or be swapped within the cycle (of a month or whatever your expected cycle period towards conversion).

Even if your marketing campaigns have been successful in getting many people to know and perhaps even trust your brand, that does not mean that they will necessarily like your brand. You therefore need to connect emotionally, to have an emotional relationship with your market, ie you need to build brand affinity with customers. Afterall, brand affinity transcends brand awareness (which, as illustrated below, is only the first and most commercially beneficial of 4 levels of brand affinity). If developed successfully, brand affinity can motivate evangelism, the highest of the 4 levels. By such a point, customers make favorable purchase decisions based on emotional bonds with your brand. Needless to say, when measuring levels of affinity, the emotional connection is most important.

 

Brand affinity levels	Nature of consumer relationship with the brand
1.brand awareness	Consumer seeks to meet basic needs. Any product that does that meets basic needs will do. Won't go out of their way to get the brand.
2. infatuation	Consumer trusts the brand because the brand adds some value to their life. Consumer feels affection, appreciation or even obsession towards the brand.
3. fidelity	The consumer can truly relate to the brand values*. Consequently, the consumer feels an emotional connection and seeks out your brand specifically.  * Here are examples of core values to which consumers may relate. the style and image provided by a clothing brand very high quality images taken from Apple iPhones
4. evangelism	The consumer believes in your brand to such an extent that they want others to use the brand.

 

For the sake of making this post on the consumer's 'liking' or 'brand affinity' with a brand as clear as possible, I will discuss it in its extreme application; 'tribal branding'. However, recognize that, depending on the brand, tribal branding exists on a continuum. For instance, on one hand, Apple has applied it to the maximum extreme, while un-branded commodities not at all on the opposite extreme and  finally, most other marketed brands fall in the middle with varying levels of moderate tribalism. The majority of brands are in the center because they know that tribalism is hugely profitable but respond with only lukewarm attempts to tribalize consumers by claiming the most recently trending core values (like eco-friendliness). However, their corporate strategizing never quite achieves the same tribalism as Apple. 

Seth Godin's book 'Tribes' explains how to create tribes. Here is a quick breakdown of the take aways from that book along with some of my ideas on corresponding content pillars.

Lesson 1: Connection

Connection is the sine qua non of successful tribalism. Tribes comprise a group of people connected to each other, a leader and an idea. The idea may be based on anything like religion, politics, racial or other basis of marginalization, sports and so on. The communication is critical because back and forth messaging among members intensifies core values and attracts new like-minded members. Essentially, the communication is a catalyst for growth. Needless to say, social media communication makes tribalism easier than ever. In short, to transform any group of people into a tribe, 2 requirements must be met as follows. 

1. a shared interest
2. communication among members

Needless to say, connection is associated with the strategy of growth and tactical content pillars like ''Traction', 'Core Values' and, if you ask members to support each other and or ask qualification questions (about interests) as a pre-requisite to membership, also 'Ask / Participate'.

Lesson 2: Pull Marketing

Because the interest is so niche, the messaging is tailor-made to narrowly attract only the tribe's members (not everyone). It therefore pulls only those who share the tribe's passion. (See Push & Pull marketing). Needless to say, pull marketing is associated with the tactical content pillar like 'Core Values' with very specialized content. One option is to use specific questions from the consumer's perspective as the titles of your posts, ie rather than write generic titles. Social listening tools can help you to generate questions. For instance, rather than write a title as 'product x [your brand name]', write it was 'Is method a-b-c the best way to resolve problem y? -- or -- solutions for problem y'. Either way, establish the details in your brand voice and tone. 

Lesson 3: Leaders are heretics.

Heresy relates to having beliefs that go contrary to norms that are generally accepted in the broader community (like religion, sexual preferences and so on). In other words, they challenge the status quo. Example(s):

• When it was generally felt that computers would not be desirable at home, Steve Jobs, the founder of Apple suggested otherwise, likely seeming a little crazy by most who could not imagine his vision. However, Apple's Macintosh computer introduced the world's first home computer and therefore revolutionized the modern world. 

Lesson 4: Tribes are assembled, NOT created.

Godin explains that, before the formation of a tribe, its eventual members, although still disconnected and scattered somewhere in the world, they lay in wait to be connected. At the sight of a catalyst, they will join and do not need to be schooled on the interest.

• Black Lives Matter (BLM) and Black Twitter followers were not trained in a class room. Instead, they suffered for while and eagerly awaited their opportunity to be connected. Consequently, when the opportunity arose, they were eager to join.

Lesson 5: The tribe is not for everyone.

This is where I think many businesses fall short of the full tribal glory. I think this failing is due to lack of authenticity. Tribalism is about true believers with a burning desire to connect with other true believers. Their efforts are not staged through corporate strategy (alone) and so they can become cohesive simply because their intrinsic interest in the cause is sufficiently strong to sustain their focus. In other words, the focus is not about vanity metrics such as likes and views. Rather, they are more interested in drawing their members closer (than growing numbers). Wired Magazine's Kevin Kelly suggested that tribes only need 1,000 true members, ie enough for a core group of passionate, deeply 'heretic' members to sustain them. In short, leaders focus on their tribe, ignoring everyone else. This lesson corresponds with the tactical pillars 'Transparency' (Authenticity), 'Values' and 'Beliefs'. The rules for these pillars will suggest unapologetic specificity in content, brand voice and tone, etc. Some might even encourage exclusivity.

• White supremacist (WS) groups are unapologetic about their zero tolerance policies regarding membership.

As far as possible, managing a corporate tribe should involve having only the right partners, suppliers, employees and so on. 

Lesson 6: Tribes become movements (with the help of leadership)

After membership has reached critical mass, the tribe becomes a movement, ie it can bring about change in the world. Do not take this power lightly. Social media movements have swayed elections. The movement comes into being when the leader does the following.

1. Tell a story (to people who really want to hear). The story highlights the vision for a better future (whatever that means to the tribe).
2. Connect the tribe members to each other and themselves
3. They lead the movement with direction and purpose.
4. They make change occur in ways that no single member could have done alone.

Lesson 7: Leaders use a combination of the & leadership Cs

Leaders all accept their leadership roles and use a combination of the following elements. They

1. challenge the status quo.
2. build a culture
3. are curious  (about the world, how it works and how their vision can work)
4. are or become charismatic to attract and motivate followers
5. facilitate communication among members and themselves
6. commit to the cause
7. facilitate connection among members.

Video (above): Tribes by Seth Godin, Animated Book Summary by YouTuber MentalEFit Book Club.

Video (above): 'How the Dogtown Z-Boys changed skateboarding culture (tribal branding)' by YouTuber Intermark Group. 

The Dogtown Z-Boys was a small group of skateboarders in the early 1970s with an intrinsic interest in skateboarding long before the tribe formed. The earliest skaters were outcasts or 'heretics' by nature. The concept of skateboards was an adaptation of ocean surf boards that were adapted to the land. Their membership was exclusive on the basis of psychological characteristics and unique skating styles that evolved naturally into being from their interaction with each other. For instance, given their ocean surfing background, they did things that other land-only skaters did not, like bring their bodies close to the ground, touch the ground and so on (in other words, an aspect of their 'heresy'). They mastered this style inside of empty swimming pools at homes up for sale during a Californian drought. Craig Stecyk of a local newspaper  (Dogtown Chronicles) assumed the leadership role by publishing the group's symbols, images, core values and ideas. (Keep in mind that this occurred several decades before the internet). This leadership brought together like-minded, otherwise disconnected members and established their culture. They also wore uniforms to demonstrate to the world and themselves their cohesiveness. They even had a physical location where they met each other. Ultimately, the tribe transformed the initially basic trends of skateboarding into its current status as a mainstream extreme sport of skating up smooth vertical surfaces of modern day.

Apple has been able to create a loyal tribe that is willing to wait overnight outside of their doors for new releases, with hopes of paying much more than the competition for their products. In keeping with lesson 1 (regarding a shared interest for being outstanding in graphics and creating a space to encourage easy, direct communication), Apple engages heavily with its market over social media platforms. For instance, its Instagram posts have featured very striking images from customers using their latest iPhone model. Starting from their revolutionary 1984 introduction of home computers for personal use, they go out of their way to establish the idea that the brand is different, in an unapologetically superior way. Their tagline 'Think different' reflects this and is somewhat of a call to action for persons wanting to be seen as an outsider, non-conformist and revolutionary like the brand was in 1984.

TO DO

1. Research and identify your tribe as intimately as possible. To this end, create a target customer profile.

2. Be clear about your unique value proposition / UVP.  The UVP does not need to be only one value. It can be a collection of those values that are most meaningful to your target market.

3. Engage with your tribe, listening closely and responding accordingly.

4. Connect emotionally with your tribe. (This is a must).

5. Create strategic content pillars that incorporate the elements of tribalism. Here is a rough example that incorporates elements of brand tribalism for introducing a new brand whose state of being unknown must overcome sales objections of distrust based on the market not knowing and consequent distrust of the brand's expertise. Notice how the same tactical pillars are applied to each of multiple segment-specific thematic pillar (like plus-sized women's wear, regular-sized women's wear and so on within a single women's line). Those tactical pillars were inspired by the concepts of tribalism and Fastnet's 9 tactiical pillars. 

ToF lead generation  / Objective(s): to be known (through trust, seek qualify members)

• Thematic pillar 1 of .. segments
• Traction
• Value
• Results (Pull title)
• Authority (expertise)
• Social Proof (Pull title)
• Transparency
• Thematic pillar 2 of  .. segments
• same as above (s/a)
• Thematic pillar 3 of  .. segments
• same as above (s/a)

MoF lead nurturing  / Objective(s): to tribalize customer (like, trust)

• Thematic pillar 1 of .. segments
• Value  (Pull title)
• Transparency
• Results (Pull title)
• Heresy  (Pull title)
• Ask / Participate
• Solution
• Thematic pillar 2 of  .. segments
• same as above (s/a)
• Thematic pillar 3 of  .. segments
• same as above (s/a)

BoF lead conversion / Objective(s) to sell and retain customer with trust inspiring content)

• Thematic pillar 1 of .. segments
• Solution  (Pull title)
• Ask / Participate (Community communication)
• Thematic pillar 2 of  .. segments
• same as above (s/a)
• Thematic pillar 3 of  .. segments
• same as above (s/a)

CONTENT RELATED TO BRAND LOVE (TRIBAL BRANDING)

• Know, Like and Trust Series
• Tribalism is an extreme form of lifestyle branding.
• Brand voice and tone
• This article relates to B2C tribal branding / brand affinity. However, B2B brand affinity is also noteworthy. Third party research suggests that that clear top drivers are Trust and customer service. Read third party articles about this topic by Marketing Charts.
• When done correctly, tribalism is able to get customers to make buying decisions based on emotional bonds.
• Emotional branding and marketing.
• Branding: Core values
• Social media content management
• Persuasion technique
• Noteworthy case studies of corporate tribes not include in this post are Tesla, Nike

Referral Programs for Customer Acquisition

Referral marketing is a 'word of mouth' marketing method for recruiting new customers through referrals by existing loyal customers (who became brand promoters). Although this often happens spontaneously through word of mouth, marketers usually create formal referral programs in a highly systematic way that is measurable and can therefore be adjusted accordingly. Programs reward current customers in some what when those loyal customers recommend new customers who meet certain qualification criteria. If done well, referral marketing is particularly powerful, especially when done online within the context of social media.

Referral marketing is considered one of, if not the best method of customer acquisition and 'growth hacking'. If done well, it creates a chain-reaction of quality interactions between people who like, trust and listen to each other. It works because it offers a win-win situation for all concerned. Brands that run referral programs typically experience between 10 to 30% increase in customer acquisition.

Uses & Benefits of Referral Marketing

• Referral marketing is a high level of targeted marketing that you are unlikely to achieve on your own. After all, your evangelists have more intimate knowledge of their friends and family and can likely target them much better than you can.  
• The use of influencers is a form of referral program. It allows you to give your product or service extensive targeted marketing. These influencers may include YouTubers and other similar sources.
• Your target market already trusts the influencer more than you. A Nielson survey on trust and advertising suggests that referral marketing scored the highest across every single consumer demographic (and even B2B customers). Also, the digital natives show very little trust in conventional advertising. 
• When marketers combine the approval of one's social circle with a reward, they maximize the potential power of referral programs.
• B2B referrals have a 70% higher conversion rate and 69% faster close time on sales (Nielson survey).
• Referral marketing can easily make your brand become viral within short periods of time, especially when using social media.

Rewards

Rewards vary from rewards points in a loyalty / rewards program to a free portion of the inventory (products or service), early access (a scarce resource), exclusively available products, discounts, cash, branded swag, content and so on. However, the arguably most exciting rewards are those that involve 2-way incentives, ie that reward both the advocate and recipient / referred individual. 

Referral Program Case Studies

Case Study: Drop Box has one of the most famous referral marketing programs (as well as one of the best examples of 'growth hacking'). The company offers online storage. Their referral program was based on the 2-way incentive / 'give-&-get' design. Specifically, they offered the advocate (ie the pre-existing referring customer) and the referred both a reward of 500 MB of free storage. The company saw massive increases in signups, that multiplied many times over every several months. They suggested the referral proposal immediately, ie during the customer onboarding process. One very commendable aspect of this case is the expansion of an expandable user-type product that is already the key product. This resulted in very happy customers. Examples of other expandable products may include extra services, extra access to a facility. 

Case Study: Robinhood offers a free mobile app for stock trading. Their referral program is a good case example of growth hacking from the pre-launch stages as they amassed an impressive 1 million plus subscribers within 1 year during the pre-launch period of the beta version of a new software product. Today, they continue adding roughly 140,000 new users every month. ... Their Referral Priority Program (ie ranking) used the power of scarcity and exclusivity marketing and gamification. Many people were eager to try the product. However, Robinhood limited the number of applicants who would be able to access the early version. This is how it worked. You join Robinhood’s waiting list and start off at the end of the line. However, if you invite a friend to also join the waiting list behind you, you automatically get moved up in line a few spots. In short, you move further up in line the more people you referred to join the waiting list. This program continued even after launch. This referral program used the powerful psychological motivation to advance. Apart from the use of one's references, there was no cost for winning something of perceived value; a better position. Some have likened this to pulling the lever of a slot machine. After the launch, the program continued but, since the product had been launched, the reward was stocks. Happy users who won stocks became evangelists. Specifically, even though the gifted stocks were not the most valuable or prestigious, they happily went onto other platforms to discuss the benefits of earning stocks and, in turn, motivated other pre-existing users to continue referring and to remain firmly loyal within the relationship end of the sales funnel.This approach has a high success rate, especially for pre-launch campaigns.

Case Study:  AirBNB's 2-way incentive design offers another case of growth hacking from the use of referral marketing. Within a few years, they grew from under 50,000 to over 80 million guests. Using a referral program was arguably necessary for their long term success because it would have been an otherwise arguably hard sell concept of allowing traveling strangers to stay in one's private residence or staying in a stranger's home. Consequently, references helped tremendously with the abovementioned element of trust that referral programs provide. The way in which it worked was that, both the advocate and guest got a $25 credit for successfully completing an upcoming trip. Furthermore, if the recipient / referral person listed their property, you could earn $75.  

Case study: FreeAgent offers accounting software for a price that is charged at intervals. The design of their referral program has a special in-built anti-attrition / anti-churn feature that goes above and beyond many other brands. Specifically, it encourages advocates to not only find referrals but to more carefully recruit and select referrals most likely to remain subscribed to the brand. It accomplished this by providing 10% free use of the software for as long as both the advocate and referrer remained as as active users. In fact, the program even allows advocates to stack rewards, ie to add up all the 10% discounts to have free use of the product after 10 successful referrals. Furthermore, in addition to enjoying free use of the product, advocates can even earn money; a 20% share of  new referral subscriptions. This approach is a good fit when products and services are used and paid for on an ongoing / continuous basis.

Case Study: A personal care brand offered levels or tiers of rewards. For 5 successful rewards, a company gave away a free jar of their product. For 10, they gave something a little more expensive, for 25, they gave a premium product. For 50, they gave free personal care equipment for 1 year.

DOs & DON'Ts

• Ensure that all stakeholders perceive value, ie the advocate, referee and the marketer's brand. Consider the case of DropBox that gave people precisely what they wanted, space, ie not 10% something else or points leading up eventually to what they wanted but immediate access to the actual product. Outside of this, they then offered real-time collaboration tools (similar to Google Docs) because they knew their market sufficiently well to know that that would be of particular interest to them.
• Introduce the referral program at a stage in the customer - brand relationship that is appropriate evangelism. In some cases like Robinhood which likely has a target market of very competent customers who already understand what they will get and can hit the ground running with your product, incorporate the referral program as early as into your customer onboarding program as they tend to gain lots of traction when introduced at that point. This may likely apply for pre-existing customers for a special edition of a brand with which your customers are already accustomed. Otherwise, there are some circumstances in which new customers will want to feel more competent with the product before referring to others. In such cases, wait until that customer has already begun to settle in.
• Design your program to generate only high quality and trustworthy advocacy (ie over hard sales pitching that lacks true interest or understanding of the product). 

• Implement a customer review system and facility for handing complaints (which I call 'reverse referrals'). The psychology of influence / persuasion shows that social proof is very influential (because leads believe much less about claims otherwise). Consequently, these systems provide trustworthy social proof.

• Remove the burden of sales from most advocates. Offer to send the invitation to their contact on their behalf. This ensures that the advocate does not have a difficult time. Research shows that only a small percentage, often as low as 3% of the average person is not a competent sales person, even for a brand they like. However, when you observe members of your 3% hyper-social and influential person, pay special attention to him or her. If (s)he is not on YouTube already, you may need to groom him or her accordingly, along with rewards. Otherwise, this 3% within your industry may include social media influencers. Seek them out when you sufficiently established to deal with the potential influx of orders.
• Simplify the process as much as possible for all. Make the referral program as easy to share as possible (for advocates) and the entry barriers as low as possible (for referees). One way of achieving this is providing different social media options for sharing. 
• Improve the quality of referrals with an intelligently designed referral program. Consider the FreeAgent case above in which advocates can potentially earn 10% discount if their referee remains subscribed. The implication this is that advocates are likely to consider who they will refer more seriously than otherwise.
• Integrate your referral program into your loyalty / rewards program. While a business needs to retain customers (which is the raison d'etre of loyalty rewards programs and can be likened to blocking the holes of a leaky bucket whose outflowing water represents churn), referral programs help on the front end , ie to acquire new customers (like water being poured into the bucket). After all, even the best businesses generally lose 10% of its customer base yearly. 

• Emotional marketing, especially as it relates to deeply personal emotional marketing, is particularly suitable for referral programs. Stress human social ideals of togetherness, sharing, friendship, intimacy and so on.

Example: Starbucks used 2 cups in the header of their referral part of their rewards program to emphasize the idea of a shared experience and suggests a sense of friendship one may gain from the experience.

Example: Klova dovetailed the concepts of sleeping soundly with and the idea of togetherness to show a very intimate scene of a happy couple waking up together.    

• Cater to the human desire for (higher) status. In some cases, that may look like the Robinhood case above. In others, it may be more like Starbucks' attractive header with gold trim to lend an air of prestige and elegance to the program. Every element, including the frosted gold against black and font contribute to the sense of prestige. Marketers continue to notice that people care a lot about status, even more than money. 

• Previously, I discussed explainer pages as they relate to loyalty rewards programs. However, use very digestible explainer pages for referral programs which may or may not be part of your loyalty rewards program. Present the program as simply as possible. This may require you to ensure that the program is truly simple. If there are too many complicated moving parts, you can too easily lose people and their interest. If you absolutely must have a complex program, focus your message on the most important aspect to sell the idea and drip feed useful options at relevant stages.

• Tell the advocate how he or she will benefit. To this end, use taglines and emphasize how far the rewards goes within the context of your program. This might involve including links to your rewards catalog or other list(s) of rewards. 
  
  
  
  Case: Klova's 'Make money in your sleep' is an attractive proposition. 

• When you analyze the success of your loyalty rewards program, use the AOV for creating future success. For instance, if you can afford it, consider using the AOV as the basis for establishing the value of rewards / reward points to offer advocating customers for referring friends. Ideally however, offer this reward to new referred customers only AFTER they have made purchases to ensure that you break even. In other words, the AOV will not only be the reward but also the minimum purchase value required of a new customer for earning the reward.

• Immediately after a positive shopping experience, encourage customers to refer others. 83% of customers are willing to refer after a positive shopping experience. Apart from after feeling positive about purchases, I wonder whether those positive experiences include winning rewards,

• Place a CTA on your post-purchase page. Customers are 16 times more likely to share at this point.

• Integrate the refer / share CTA into current customer experiences (like the post purchase page) and NOT tucked away on other landing pages. This is when customers are four times more likely to share.

• Integrate referral marketing throughout your organization. Tell staff and all stakeholders how it works. Education and re-education at all turns is very important to ensure success.
• Psychology suggests that customers are more likely to repeat a spontaneous action (of referring new customers) if you reward them as a surprise, ie over when you reward them as motivated and advertised beforehand. In that case, also give surprise rewards for informal referrals that are not already part of your program and or to persons who you may wish to invite into the program. Another approach is to surprise the unsuspecting new customer by telling them that you have credited their account because their friend referred them. Encourage that new customer to thank the advocate, which may inspire both of them further in the way of making referrals as they see that your system truly works.
• Absolutely do NOT forget to give promised rewards. Set up your system so that the customer is credited as soon as their referee converts. 
• Encourage customers to share referral links over social media like Twitter. Example: After Starbucks did this, apparently thousands of customers their shared referral links.   
• In whatever way possible, incorporate an element of prestige. Marketers are finding that prestige is more appealing (than money) to leads.
• Get your customer experience CRX in order beforehand running a referral program. The ill fate of inviting guests to your home while you are building or otherwise ill-prepared to treat them well also applies to any referral program.
• Design onboarding and thank you correspondence that simply reiterates how the program works. Ensure all parties are clear on what they should expect re what they will get, how and when. As per usual, include a call to action (for advocates to invite more referrals).

Here is Starbucks' response to advocates. 

Here is Starbucks' response to referrals of the same program. 

• Offer several options for your customers to reach out to their circle of influence that may include submitting a friend's email address, sending a social media or Whatsapp link to the friend. The links carry codes that are embedded with ways of identifying the advocate.
• Analyze and adjust your program's performance. This includes paying attention to your analytics, managerial statistics, product reviews, surveys and so on.

CONTENT RELATED TO REFERRAL MARKETING

• Why the old 'earn and burn' loyalty program model is failing and a new approach for modern consumers.
• Tiered loyalty programs
• Use spend-based loyalty rewards programs to give greater rewards to customers with the highest customer lifetime value (CLV) ... and reduce costs while you are at it. 
• A great loyalty rewards program can not help your business if customers can not understand it sufficiently well to sign up. Create a loyalty rewards program explainer page.
• Brief overview of loyalty and evangelism as they relate to the sales funnel.
• Analyze how well your rewards catalog has been curated.
• Gift card programs may be designed to be stand alone or an integrated component of your current referral program. 
• The psychology of influence / persuasion suggests that using the principle of social proof is particularly useful when attempting customer acquisition.
• One way of acquiring new customers is to shout-out strategic alliances, ie other businesses with non-competing offerings but the same market. You may use tools like Instagram @tags. 
• Using brand storytelling for evangelism
• Case studies
• AirBNB
• Drop Box
• FreeAgent
• Robinhood
• Starbucks

Loyalty Programs for Modern Customers

Contrary to the belief of a few people, loyalty programs have not outgrown their usefulness, well, ie if you know how to redesign the old model to keep the interest of modern consumers. Well designed loyalty programs use emotional marketing and have the potential to channel unqualified leads through the sales funnel, all the way to being evangelists, especially if these programs make the journey fun. 

Why Conventional Loyalty Programs Are Failing  

Conventional loyalty programs that offered points for purchases in exchange for price discount are based on the old transactional approach to customer relations. This old way of exchange can expect as much loyalty as someone who attracts a marital partner only with money. As soon as the competition offers bigger financial rewards or you falter on that offer, the marriage of convenience ends and it becomes clear that the partner's stay was never through loyalty after all. An 'earn and burn' loyalty program typically rewards customers after a specified number of visits or amount spent. For instance, after 9 health shakes, the program rewards the 10th free. Such program designs are sometimes financially counterproductive when customers receiving those rewards would have likely made the Nth purchase on their own, ie even without the costly incentive.

How to run successful brand  loyalty programs

If companies considered their customer relationships as being similar to courtships and marriages, they will re-think their approach to loyalty in business. True loyalty occurs through emotional connection. Consequently, successful loyalty programs include strong elements of emotional marketing. Although emotional marketing driven loyalty programs still have some system of incentivizing for rewards, they encourage customers to engage more deeply with the brand. The types of incentives and rewards are very different. Here are 5 ways you can still run a successful loyalty program.

1. Give customers incentives to engage with the brand (not simply to spend money in order to get the reward of price discounts or free gifts). The ideal is to encourage an emotional investment whose cost rises, thereby making it unattractive to lose, as per the theory of loss aversion. Specifically, in cognitive psychology, decision theory and behavioral economics, 'loss aversion' refers to someone's tendency to prefer avoiding losses to acquiring (equivalent) gains. For instance, it was found that people will often act in a way to prevent losing $100 than to find $100. This theory is at play when people find it hard to leave relationships into which they have invested a lot of emotional energy, time and effort, even if that relationship is toxic and there are other similar or arguably better people available.

Example: If your currently overarching objective is to raise brand awareness, encourage customers to comment on your Facebook page about the aspect of your brand they like the most. You can request that they get a minimum of x persons to like their comments from their circles of influence.

Example: If your currently overarching objective is to raise brand awareness, get to the point and tell them that you invite customers to make referrals via social media. Actively encourage this as opposed to waiting and hoping someone will be kind enough to do it. Provide incentives, like even a percentage of sales to referrals. To avert bad reviews, make yourself available if there are any questions or problems.   

Example: Encourage customers to interact with your published content (like blog posts). Not only should they publicly support posts whose content appeals to them but customers should also share these posts on social media and receive at least x likes. 

Example: Encourage customers to create touch-points between the brand and their friends, simply by discussing the brand. Consider the friends' stage within the sales funnel to establish the objective of that promotion. Consequently, if the brand is new and needs to generate brand awareness, you may specifically encourage the customers to discuss matters related to the brand, like the brand's core values as  you should have already clearly described in the brand's social or other mission statements with which his circle of influence can most relate. If part of your unique value proposition relates to offering products that are healthier and more environmentally friendly because they do not have petroleum products, ask your customers to discuss their views on the dangers of petroleum products. Don't be shy to 'casually prompt' them with some helpful information in a blog post that includes the type of information you want them to say. Stand back and allow the customer to take the credit and admiration of his / her hopefully newly engaged friends. As usual for any form of customer communication / promotion, ensure the message to the third parties carries a Call to Action (CTA) that meets your overarching strategic objective (or current marketing mission statement).

Example: The company Predator Nutrition used '360-degree customer engagement' by rewarding points to its loyalty members not only for purchases but also for reviewing products, referring friends and following on multiple social media networks like Facebook, Twitter, Instagram and so on. 

2. Reward customers to meet their needs. Maslow's 'Hierarchy of Needs' suggests that a human needs motivate his or her behavior. However, if you recognize that modern consumers are complex with ever higher expectations of businesses, price discounts alone will not stoke the type of emotional connection you need in order to get the customer's loyalty. In Maslow's hierarchy, the higher human needs to which you ought to target include: level 3 needs of love and belonging, level 4 needs of esteem and level 5 needs of self actualization. (Lower level needs 1 and 2 relate to physiological needs (like food and shelter) and then safety. This is not to say that the lower needs are completely irrelevant. After all, Herzberg's 'Hygiene Factors Theory' posits that some factors are true motivators of behavior and therefore rightly named 'motivation factors' while other factors may be likened to hygiene as it relates to physical health, ie it is nice to have but will not make any significant difference in health. In other words, factors that provide your customer with physiological needs like price discounts are likely to be only nice-to-have but will not motivate their true loyalty. Conversely, other rewards that target higher needs will actually motivate true and lasting loyalty.

Example: Give customers an exclusive add-on product on service to your main product that adds the customer's overall value perception like free shipping, personalization options at a reduced rate. Your customer already has an intrinsic interest in your product. So keep his interest by exceeding his / her expectations with something extra!

Example: Give customers an exclusive invitation to an enjoyable tour of your workplace for a behind-the-scenes tour and maybe a souvenir that is also scarce (somehow through being relative difficulty to get). (See how scarcity and exclusivity and urgency marketing are powerful emotional marketing motivators) An exclusive invitation, which is essentially offering membership (albeit short-lived) to a special group, satisfies the 3rd level need for belonging. Such meetings might occur only once or twice yearly for a limited number of customers. Stoke that emotional connection! If you can get the most out of the situation by taking photos that the customer can share on social media, all the better.

3. Encourage customers to showcase your stated core values. Your core values consist of beliefs that are fundamental to your brand's and or customer's identity. They are the ethos and essence of your brand and or your customer to the extent that they dictate your behavior and determine how you decide on what is right or wrong. They should NOT be aspirational, lofty or single ambiguous words. Instead, they are sufficiently clear to be measurable. Examples of well written core values include: To promote sustainability, promote social responsibility, do more with less, minimize our impact on the environment, respect local cultures. As mentioned previously when discussing how to build a brand for modern consumers, you must be willing and able to walk the talk. That way, your core values make great yardstick against which you can determine whether your company's actual behavior or other choices are compliant with its desired brand identity. In short, core values are the essence, heart and mind of who your brand is.

Encourage customers to behave in ways that reflect the brand's values. See them as ambassadors of sort. Encouraging these behaviors may be integrated into challenges and rewards within your loyalty program. Notice that your company's product need not even be the focus of your challenges, rewards or advertising. A case in point is how Coca Cola's Christmas advertising barely discusses the drink. Rather, they focus on the value of sharing and togetherness. This Coca Cola example illustrates a very useful opportunity if your product is arguably boring, like a commodity or very similar to that of your competition and needs some means of differentiation. 

Example: If one of your brand's core values is to respect all other life, a challenge might involve them discussing animal rights. 

Example: If one of your brand's core values is to respect all life, a challenge might involve trivia over why 'All Lives Matter' and the trend to favor animals over minorities is offensive. 

Example: If one of your brand's core values is to minimize your impact on the environment, a reward might be a branded reusable shopping bag. In fact, that reward can then be transformed into the challenge in which customers must use those bags when shopping at your establishment ... to qualify for some other reward(s). 

Example: Reward customers for meeting personal goals that correlate with your brand. See how AARP (ie the American Association of Retired Persons is an interest group that focuses on issues affecting the elderly) rewarded customers for taking steps towards promoting their health. A more commercial approach is if your brand involves makeup remover, not only encourage customers to use the remover every day but also reward achievements of a clear complexion that may have resulted from using the remover.

The AARP encourages members to exercise to increase physical fitness and prevent falls, which by the way, is something that might reduce the rate of claims covered by the association's insurance program. In other words, the beauty of this is that it is mutually beneficial to the member and AARP. Members get rewarded $1 per day that they complete exercises within each month. 

4. Make it fun, like a game. Making the experience fun elevates the customer experience. The gaming industry made many otherwise productive men addicted to playing games for numerous hours on end each day. After having been one such man, Yu-kai Chou, the founder of 'gamification' did an analysis he called the 'octalysis' on the 8 core motivators for this type of behavior.  

  

"Gamification is the craft of deriving all the fun and engaging elements found in games and applying them to real-world or productive activities.” Yu-kai Chou

Imagine, if your loyalty program can transcend its boring past to resemble a board game, it is likely to far better engage the interest of your customers. Here is a quick summary of the 8 main core "drivers" Chou highlighted.

The letters after each motivator 'R' for right brain and 'L' for left brain relate to Chou's non-scientific, "symbolic" classification of the 8 to help in program rewards design. Right brain motivators are more emotional and relate to creativity, self-expression and social aspects. Conversely, left brain motivators are more logical and relate more to logic, calculation and ownership.

Right brain (emotional and "intrinsic"). These forms of motivation derive from within the customer. Rewarding through these means is essentially letting your customers be themselves. The reward is the way you honor who they are; their creativity, self expression and social life, as one would in a lasting and loving marriage.

Conversely, left brain (logical and "extrinsic") rewards like goals and gifts are closer to the old paradigm. These rewards are extrinsic to the emotional essence of your customers and do not allow customers to be truly present.

Chou highlighted that "many studies" have shown a danger of focusing on external rewards as a means of motivation. Specifically, when you stop, customers' motivation drops markedly, even to its original level at the introduction. Consequently, you can better motivate continuous motivation with greater focus on right brain motivators.    

i. Epic Meaning & Calling - 'L & R'This motivator relates to arguably the highest human need of self-actualization. It posits that people become driven to do some action that is greater than them and gives reason to their lives, and for which they believe they had been chosen and therefore received a calling. He highlights examples of people freely donating their time to maintain forums and communities like Wikipedia and other Open source projects simply because they want to see the advancement of mankind. 

Example: Reward your customers' successful challenge with a symbol of the way in which he or she feels chosen. Symbols may be a microphone so (s)he can select one of your several topics (about your core value) from which to speak.

ii. Development & Accomplishment - 'L'This is the inner human drive to progress, develop skills and eventually overcome challenges. He stresses the need for rewards (badges, trophies, points, etc) to be given only after a challenge in order for the reward to be worthwhile.

iii. Empowerment of Creativity & Feedback - 'R'

This motivator occurs when a creative process forces customers to repeatedly figure things out and try different combinations and, at the same time, allows them to see the emerging results of their creativity, receive feedback, and respond in turn. He gave the example of how Legos become 'Evergreen Mechanics', because the game's designer no longer needs to continuously add more content to maintain the process.

Example: If one of your brand's core values is concerned with health and safety, the aim of your loyalty program may be to re-arrange the elements of a given situation in order to make it safe and healthy.   

iv. Ownership & Possession - 'L'People are motivated not only to accumulate things but then to take care of and further develop those possessions. Possessions include rewards participants actually keep as their own. This personal ownership provides some level of emotional connection that contrasts with the conventional 'earn & burn' loyalty programs in which nothing is ever owned. Rather, earnings quickly were used up or became expired before there was a chance to use them. Other examples of game possessions include exclusive branded souvenir, avatar and virtual objects. I am reminded of the Monopoly board game in which players try to accumulate real estate that needed to be taken care of. Furthermore, one's level of investment of time and other resources deepens players' sense of ownership, even for extrinsically related possessions like the making of one's avatar.

v. Social Influence & Relatedness - 'R'Research has shown that social motivators are are also significant. Examples include competition, envy, belonging and so on. By understanding your customer's social drivers, you can motivate him accordingly. For instance, I previously mentioned how the airline industry uses exclusivity marketing techniques to intentionally stirs emotions of jealousy and possibly aspiration among economy class passengers who are forced to observe the more privileged treatment of first class passengers. The intention is to inspire economy passengers to want to get the same privileged treatment. Social relatedness is a matter of using props with which customers can relate emotionally as a means of motivating their action. An example Chou offered was a product that reminds people of a happy childhood and is more likely to motivate a purchase than products unable to have this type of effect. Local cultures are therefore noteworthy. For instance, if you are targeting vegans, it is counterproductive to offer hamburger rewards. 

vi. Scarcity & Impatience - 'L'As per my earlier, more detailed discussion of scarcity marketing, scarcity relates to something that your customers cannot have or at least not without great effort. Making customers wait for something they look forward to intensifies their impatience and desire for it.

Example: Robinhood used gamification in their referral program to encourage over 1 million members during the pre-launch of new beta version of software that only a few souls would qualify to use. Advocates referring the most new leads were pushed forward on the scoreboard and closer to being among the few able to try the software..

vii. Unpredictability & Curiosity - 'R'People become emotionally engaged by curiosity when an outcome is not yet known. Otherwise, engagement over a known outcome is due because of #1, ie needing to achieve something, to finish the current process.

viii. Loss & Avoidance - 'L&R'This powerful motivation is responsible for people doing anything possible to avoid the pain of losing something. The sunk cost fallacy illustrates the power of this emotional motivator. Specifically, the sunk cost fallacy occurs when people remain committed to something that has already proven itself lacking in its desired potential, only to avoid the pain of loss of investment in time and other resources.

Example: If customers do not complete a certain task, they can lose their status entirely and need to start over again.

5. Use data science. Data mining from each touch point helps to inform how to improve the loyalty program. Customer relationship management (CRM) is a great way to start.

Example: Analysis might show that giving external rewards like price discounts at certain stages might be more harmful than good for your bottom line because certain more valuable customers would proceed without that type of reward. They might prefer experience over financial rewards. 

CONTENT RELATED TO LOYALTY PROGRAMS FOR MODERN CONSUMERS

• Tiered loyalty programs and paid subscriptions
• Brand awareness strategies
• Onboarding new customers for best customer lifetime value (CLV)
• A loyalty / rewards  program explainer page is ideal for attracting customers. If your customers do not understand a great program, it is very unlikely to attract and keep customers.
• Benefits of repeat customers, especially as they relate to loyalty programs.
• Keeping existing customers is roughly 5 to 25 times cheaper than acquiring new ones.
• Loyalty programs can help to raise a customer's average order value / AOV by as much as 33% (often 20%)
• Loyal customers spend roughly 67% more than new ones.
• Loyalty programs should ideally have an inbuilt referral program in which customers gain rewards for referring their circle of influence. This is ideal because leads are 7 times more likely to buy when referred by a friend, thereby increasing new customer acquisition by roughly 25%. (Conversion of referrals to buying customers can be 25%). 
• Stats: Loyalty programs can help to increase the repeat purchase rate by as much as 80% (often 70%).
• 360 degree engagement is often included in the design of a successful modern loyalty program. It refers to the use of every possible contact point to have greater reach for new and existing customers. The single most effective contact point is social media mostly because customers remain constantly connected with their mobile devices and easily share content. Other contact points include email, physical meetups, YouTube videos, blogs with lead magnets and birthday surprise rewards. Rewarding customers for as many contact points as possible also encourage engagement like for signing up to email list, for signing up, etc. See the case below of how Jelly Belly awards points in 6 main ways and allows customers to use the points as currency for 3 packages.

CONTENT RELATED TO LOYALTY REWARD PROGRAMS FOR MODERN CUSTOMERS

• Tiered loyalty programs
• Use spend-based loyalty rewards programs to give greater rewards to customers with the highest customer lifetime value (CLV) ... and reduce costs while you are at it. 
• A great loyalty rewards program can not help your business if customers can not understand it sufficiently well to sign up. Create a loyalty rewards program explainer page
• Brand mascots are a helpful shortcut to building brand recognition and, in turn, loyalty 
• Emotional advertising; deeply personal emotional triggers
• Measure the success of your loyalty rewards program.

• Incorporate a referral program into your loyalty rewards program. These 2 types of program complement each other. While the loyalty rewards program seeks to retain customers, referral programs seek to acquire new customers.
• Brief overview of loyalty and evangelism as they relate to the sales funnel.
• Analyze how well your rewards catalog has been curated
• Gift card programs may be designed to be stand alone or an integrated component of your current referral and or loyalty rewards programs.
• Using brand storytelling for evangelism