Q: What are the most cost-effective ways to increase brand awareness?

Gaurang Naik, CEO

Dollar Rows

A: You want to have your current customers talking positively about you; telling their friends and acquaintances about your business and why they are repeat customers.

In short, what can you do to reward your current loyal customers and how can you help them tell your story? In today’s terms, you want your current customers to “go viral” with your story.

Now to do that, you have to do two things: first, give your current customers something to talk about, and second, give your customers something to talk about that you can afford. In other words, you have to give your customers a “deal” that you can afford to give them. American Airlines and Subway are probably the best examples of what you are looking for.

Both Subway and American Airlines successfully used loyalty programs to cost-effectively increase brand awareness. What they did worked for them at the time they utilized these efforts. You can do the same, but what you have to simultaneously understand your costs of operation and your customer.

American Airlines is generally credited for introducing loyalty programs to the airline industry. American recognized that, consistently, many of their planes flew profitable routes with empty seats. How could they make these “unused’ seats available to their best customers without reducing their revenue? The rest is history. Few businesses understand their “occupancy” as well as the airlines — and this knowledge allowed them to give free travel to people who want to travel.

For years, Subway gave free sandwiches to customers who collected stamps at participating franchise restaurants. The sandwiches were not without cost to Subway; however, most people would purchase a drink and other items with a sandwich, so transaction value increased. Think back — remember when a friend would “suggest” Subway and then asked for your stamp if you did not have a card?

American and Subway gave their current customers something they wanted — free travel and free food — in a form that was both valued by their customers and cost the companies very little. Both programs were not free; but they certainly were effective and they were self-sustaining, and that is what you are looking for.

 

Jon Seltzer is a professor of marketing at the University of St. Thomas Opus College of Business.