Greening Loyalty Programs
By Tom Ryan
The number of brands tying their customer loyalty programs to the environment is surging. These include green-focused firms such as Seventh Generation, which sells chlorine-free diapers and recycled trash bags, as well as traditionally non-green companies such as airlines and banks.
According to Colloquy, a loyalty-marketing consultancy in Cincinnati, 34 companies have added green rewards to their loyalty programs in the past year alone. The problem is that many corporations without eco-roots risk being accused of green washing, or adopting eco-friendly practices only for commercial reasons.
“When you see such a flurry of activity in such a short period of time, [companies] risk coming off disingenuous to the consumer,” Kelly Hlavinka, managing partner of Colloquy, told Brandweek. While there may be good intentions behind such efforts, Ms. Hlavinka believes brands need to ask themselves, “What charitable activities do we already support? Does a green rewards program align with those causes?”
Continental Airlines, for instance, launched a green energy program last year that offers OnePass frequent members the chance to earn miles by replacing their utility company with renewable energy provider, Gexa Energy.
“It is a bigger statement for an airline to be offering [green rewards],” Peggy Atkins, president of Imagine Works, an environmental advertising and communications company in Chicago, told the magazine.
According to the Colloquy 2007 Demographic Loyalty Study, green reward programs are most effective when they give back to consumers, as opposed to those that offer the chance to donate points toward green causes, The study found that more than 95 percent of consumers used earned points to reward themselves and showed little interest in using points to reward others or projects.
Wells Fargo launched green rewards last April enabling credit and debit card holders to donate reward points toward renewable energy projects. But it only appealed to a select group of customers. This past Earth Day, the program was enhanced to allow customers to also redeem points for any of 20 eco-friendly products, such as organic pet toys and personal air purifiers. “By putting green options” on the table, Nancy Beaver, Wells Fargo’s vice president of customer marketing, tells Brandweek, “we might be prompting customers to at least think about an eco-friendly choice.”
Discussion Questions: What do you think of green rewards programs? Should corporations without obvious eco-credentials get involved in these loyalty programs? If so, how do they avoid being accused of green washing?
As someone who has tried for decades to be conscious about my and my family’s impact on the earth, and to be environmentally respectful, the “green” overkill of the last year and especially the last week has been downright creepy.
The blatantly obvious commercial nature of the recent advertising and PR campaigns on TV and newspapers and the feeling of “faddishness” being generated tends to trivialize the green movement rather than enhance it in my opinion. It would be interesting to know how many new “green” products were sold as a result of this marketing effort to capitalize on Earth Day. I suspect not a lot. By the way, to commemorate Earth Day 2008 instead of driving my car to go shopping for “green,” I planted an Alder tree and made an online contribution to my local Botanic Garden.
The green movement is important, growing, and getting a lot of attention. That being said–there are many different approaches to “going green” from focusing on reducing carbon print to emphasizing organic products, to making products safer for the environment. Consumers have their own areas of emphasis, their own perspectives, and their own evaluation of how important each of these and many more issues are to them. The companies that have programs lining up with individual beliefs are likely to be supported. However, a one size fits all approach is not likely to be successful. Companies need to better understand the multidimensional lives of their consumers.
We (or at least all of us who lived through the last Green Wave in the 1990s) already know the answer to this. Consumers reject pure “green washing” claims; inferior products marketed as “earth friendly” and higher prices.
Consumers aren’t stupid.
They’ll quickly sort out the difference between real green products and products just going for their green. In the process, a lot of good, genuine products will be rejected but–if history can be counted on as a model–they will only represent a small fraction of the total green product universe.
Please don’t take this as being a political statement because it’s not intended, but Green rewards programs are useful if it’s determined that the environmental concerns are more important than other concerns. It’s strictly a matter of marketing, dollars and sense, and how to divide the consumer’s focus and in how many parts. Neither manufacturers nor retailers can afford to have discounts, rewards, and programs for everything, and every purpose.
The other piece is that consumers need to continue to believe that these actions are making a true difference, or otherwise, these movements will have been at best a passing trend of consciousness.
I think it makes sense to connect loyalty programs to shopper conscience, since consumers act on sustainability with “social behavior” actions, participating in programs with purpose, etc.
I think it’s a mistake to have separate programs for specific groups, it sets up “reactive” behavior for the short term, not relevancy of the program overall for the long term. A long term program should evolve to stay relevant to shoppers!
What’s your “carbon footprint”? mmmmmmmm, how many times have you heard that phrase this week? What the heck exactly is a carbon footprint? All of a sudden, the fact that a big box retailer and grocer has gone green with new “skylights” and electric outlets in the parking lot for electric vehicles (even though only .000001% of all vehicles are electric) is suppose to catapult them to the top of my favorite brands list? Should I use UPS instead of FedEx because UPS is investing in developing alternative fuel delivery trucks, even though it’s $2 more per package per delivery? What else can Brown do for you?
Well, I guess we should care, but at what cost? Can I afford higher food and package delivery prices? And, by the way, will this keep them from crushing my eggs or make their customer service any better than it is now?
Like the overwhelming majority…most of us, I do care about the environment. But are we being guilted/manipulated into caring in return for higher costs and higher corporate profits?
I’d be interested in knowing what these and other companies are doing that’s green and doesn’t need to be advertised like a public relations opportunity. Are they reducing tons of junk mail and saving some trees? Are they allowing employees to telecommute or adjust schedules to carpool? Are they recycling trash in their offices and stores? Are they using green products to clean their own floors? Are their corporate vehicles running on hybrid or other alternative fuels? Do they allow employees a personal day to volunteer to clean up the beach or a park? Do they have a corporate policy to engage with green vendors over non-green vendors? For me personally, the answers to the non-public relations green questions would have a greater impact on my brand loyalty than skylights and outlets.
The difficult subtext of all commerce-based green programs is the message to not merely consume ‘smarter’ but to consume ‘less.’ All traditional selling tied to conservation is a contradiction, and is a strategy best approached subtly, if at all.
I think Jeff Weitzman makes a very good point, that it is best to do something that is green, rather than nothing, even if you are contributing negatively to the environment in another area.
“Just don’t overstate your case,” he says.
Over the last few days we’ve seen all sorts of claims, from advertisers to politicians, tell using how great they are in one aspect of their existence, when we know they are not doing their best in others. Green can also be used as a smokescreen to hide the fact of other ills, by just emphasizing on small part of an company or person’s real profile.
My wallet is full of too many loyalty programs. Most of them have accumulated points that I’ll never redeem. Any company could setup a system to allow me to “spend” my points to enable carbon off-set programs, and in the process appear to have a green initiative.
Even my gasoline company could get me to their website to to good things for the environment as I continue to fill my car with gas. Once at their site I may be lured aware to other offerings.
Here’s one way to judge “green” public relations: does the ad and publicity budget for the green activity exceed the cost of the green activity? How many times do you see a $75,000 newspaper ad touting a $25,000 green activity?
Here’s another way to judge “green success”: what proportion of your customers or staff participate? Does your green activity involve 15 of your 25,000 employees? Does your green customer program engage 569 of your 7 million shoppers? Have you announced the numerical results of your green program? Or do you announce the program but hide the minimal participation rate? Or do you include stuff you’ve done for the past 20 years, but now label it green?
My firm builds loyalty systems and we are currently building out a ‘green loyalty program’ for a client.
Today ‘green’ is an important way to get people to pay attention and to build a ‘handshake’ relationship with your brand. This handshake is important in that great brands today need to work smart insuring that their messages are aligned with their best consumers interests and heart.
That said…be careful. The tide is turning (I am a long-time and involved enviro having followed the various green waves for 25 years). Green is increasingly an assumption and a secondary order benefit. The assumption (shortly) is that most brands try their hardest to be green and rewarding and acknowledging everyone for trying is like giving a medal to every finisher in the race. It’s silly.
Does the world need multiple ‘green loyalty programs’? Probably not. Do marketers need to encourage the right (as defined by society) behaviors? Sure. Where I net out here is that green thinking should be everywhere but if the marketeer today thinks that by primarily promoting green product and green values at the expense of an overall great product product, brand and service experience that she is going to win the hearts and minds of many future customers–she is likely mistaken.
That said–Go Green!
I think it’s harder to “greenwash” today than ever: too many groups are focused on corporate practices and there is a higher level of understanding among consumers about environmental impacts. So programs that position a company as eco-friendly when they are not are likely to fail.
However, there’s nothing wrong with doing what you can. So an airline that consumes tons of fossil fuel an hour and dumps tons of CO2 into the atmosphere, but enables consumers to more easily buy wind power for their homes is doing good–as long as they don’t overstate their case. If they do that, combined with genuine efforts to reduce emissions and other problems, then they will enhance their brand and be seen in a positive light.
A key difference between the current “green” movement and earlier efforts, IMHO, is that sustainable change is now the watchword. The movement is far broader because it doesn’t ask consumers to make drastic changes in lifestyle, it asks them to make smart choices, and demand products and services that make sustainability a top priority. That gives businesses room to make eco-improvements within the context of business demands and still garner consumer good will.
Consumers are justifiably skeptical when corporations trumpet their acts of corporate citizenship. BP, for instance, has worked hard to lead development of alternative and clean fuels, while at the same time they’re defending themselves against lawsuits brought by victims of a refinery explosion blamed on having neglected process safety. You can’t talk your way out of trouble that you behave yourself into.
I admire Wal-Mart’s approach to energy savings and sustainable development. They were among the first to launch internal green initiatives, and did so out of a sense of responsibility. Until recently few consumers realized how much Wal-Mart has accomplished in this area.
When a company or brand has proven to consumers that they “walk the walk,” they’ll be quite receptive to a green loyalty program. If, however, companies approach this as a marketing investment with an ROI, they’re missing the point and won’t succeed. At worst, they may even diminish the brand loyalty that they now enjoy.
Marketers should consider green loyalty programs with the greatest care. Consumers are sincere in their intentions to purchase products and services they believe are better for the environment, but are also quickly disillusioned if claims are not perceived as credible. Transparency is key in talking with consumers about sustainability.