How to Deliver Sustainable Customer Incentive Schemes
Sustainability is setting the agenda for the way organisations win and retain customers today.
As an increasing number of businesses accelerate their plans to mitigate their impact on planet and people, consumers are also prioritising sustainability in their purchasing habits.
Research from CapGemini found 79% of consumers are changing buying preferences based on the ethical or environmental impact while 77% of executives in retail and consumer sector said sustainability leads to increased customer loyalty.
According to another study by Deloitte, this is resulting in consumers rejecting single use plastic (61%), buying more locally produced goods (45%) and ceasing to purchase certain brands or products due to ethical or sustainability concerns (28%).
Sustainable customer incentives
Sustainability is increasingly a consideration in the design of customer incentive schemes too.
While saving money (83%) and getting treats for themselves (53%) are the top ‘wants’ from reward schemes, just over a quarter of consumers polled by YouGov in 2020 said they wanted rewards which help charities and the environment.
So, what actions can brands take to deliver on those expectations? Based on the work we are doing with our clients here are four areas to consider:
- 1 Let consumers give reward to causes
A simple first option for organisations is to allow reward to be donated in full or in part to good causes. This might be a cause which is aligned what you do a business – conservation, food poverty or support for communities overseas - or one which is aligned to the interests of consumers in their local area. Both options speak to the increasing consumer desire to put reward to work for good causes and the aggregate reward given can make a significant difference to a cause.
- 2 Create sustainable reward catalogues
A second area for action is to solely offer reward or incentives from sustainability-strong partners. In world of consumer scrutiny and cynicism about greenwashing, the process for selecting and checking reward partners is critical. The only credible way of doing this is to set your own criteria for the environmental, social impact and governance you expect of your partners and have an assurance process in place to ensuring their claims and reporting are credible. It may not be a quick action to take but such ESG reporting and assurance will become the norm.
- 3 Reward sustainable behaviour/ choices
While it is clear from consumer research that not every consumer is ready to commit to sustainable choices, brands can nudge more people to do so by rewarding sustainable choices. Indeed, in the long term, the circular business models built on reuse, recycling, minimising waste and environmental impact will be the only ones which escape taxes and punitive regulation. Incentives can play a number of roles in this context: sharing the benefit of any cost savings such as not using a disposable coffee cup, weighting the best reward for the most sustainable products or services or rewarding a long term shift to a sustainable purchase through a loyalty programme.
- 4 Design incentive programmes which minimise waste
We have come a long way from the time when incentive programmes relied on paper catalogues, vouchers and letters. However, the digitisation of incentives and the marketing programmes they support still have some way to go and many organisations can still benefit from moving away from reward cards and postage to e-gift cards, and catalogues with fully digital fulfilment, and an enhanced user experience for reward recipients as a result.
Some may question whether focusing sustainability is the right priority right now, a luxury in the face of the cost-of-living crisis. The reality is that it will outlive the current economic shock we face and, as it takes time for organisations to reorient themselves to a higher standard of sustainability, it will be the ones who act now who reap the reward of better consumer loyalty and a truly sustainable business.
