A whopping 91% of consumers agree that many loyalty programs feel similar and are not that differentiated from other programs1. We are drowning in the sea of sameness. You spend $1 and you get a point. Then you redeem that point for discounts on your next purchase. Rinse and repeat. It’s no wonder that we are seeing ho-hum results and engagement.
How do you make your loyalty program stand out? How do you connect with customers on an emotional level? How do you build attachment, alignment, and dare I say it, emotional loyalty?
In my review of best-in-class programs worldwide, the programs that stand out are the ones that lean into its values and bring out what the brand and the company stand for in the loyalty program mechanics. ESG (Environmental, Social, and Governance) criteria within the design of loyalty program rewards and incentives promote sustainable and responsible behaviour among customers and align the company together with its members toward a common good.
Research supports this approach:
- 63% of respondents agree they are more likely to do business with brands/ companies whose purpose aligns with their values2.
- When the brand purpose aligns with customer values, consumers are2:
- 4× as likely to recommend your brand.
- 8× as likely to go out of their way to do business with your brand.
- 9× as likely to spend more with your brand.
REI Co-Op Membership does a particularly amazing job at aligning its values with its program by selling and buying used gear and pledging $5 off each membership toward the REI Action Fund.
How would you incorporate ESG initiatives into your program?
The first and most important step is to align the program with the cause that is important to the brand and the company overall. A loyalty program is always a part of and supports the overall strategy. It is one of the marketing toolkits and the more closely aligned it is with brand expectations, the better the customer satisfaction and business outcomes will be.
Next, here are some examples of how you can bring ESG loyalty initiatives to life:
- Offer rewards for eco-friendly actions, such as recycling, reducing energy consumption, or using public transportation, encouraging customers to adopt more sustainable habits.
- Collaborate with environmentally conscious partners and suppliers to offer exclusive rewards and benefits to customers who choose sustainable products or services.
- Allocate a portion of the loyalty program’s revenue or points to support environmental initiatives or social causes, such as reforestation projects, clean water initiatives, or local community development programs.
- Provide customers with the option to donate their loyalty program points to charitable organizations aligned with ESG principles, fostering a sense of social responsibility and collective impact.
- Offer personalized recommendations and rewards based on customers’ preferences for ethically sourced or socially responsible products, thereby promoting conscious consumerism.
- Establish transparent communication channels to educate customers about the ESG initiatives the loyalty program supports, including progress updates, impact reports, and success stories, fostering trust and engagement.
- Collaborate with local communities and NGOs to organize volunteer activities and give customers the opportunity to participate, earning additional loyalty program benefits while contributing to social or environmental causes.
- Implement ESG performance metrics and targets within the loyalty program to track and measure the impact of sustainable behaviors and initiatives, enabling continuous improvement and accountability.
- Establish partnerships with ESG rating agencies or organizations to obtain third-party verification or certification of the loyalty program’s adherence to ESG principles, enhancing credibility and attracting socially conscious customers.
- Ebbo 2023 Loyalty Program Data Study, US.
- Bond Brand Loyalty, being published in The Loyalty Report™, 2022, USA, in partnership with Visa.