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Green Loyalty Program: What Is It and How to Apply It?

 

The Impact of Sustainability on Customer and Stakeholder Loyalty

Green Loyalty Programmes are revolutionising how brands create lasting bonds with consumers. They have become a powerful tool for engaging, educating, and rewarding people who promote or maintain habits calibrated to the ethical impact of their choices. Such insights were confirmed by the Global Customer Loyalty Report 2023, a study conducted by Antavo based on the responses of over 260 companies worldwide, and an analytical set of 290 million anonymous actions. The study found that Green Loyalty Programmes are already among the most effective tools used by companies looking to improve customer loyalty and engagement.

Most of today’s loyalty programmes are based on principles of strategic collaboration between entities with similar values and – in the case of the growing green agenda  – the adoption of programmes built around ESG themes. The data collected in Antavo’s study reveals that:

  • 88.5% of respondents stated that their company trusts loyalty programmes and uses them to help overcome concerns about inflation and a potential recession.

  • 67.7% plan to implement or increase their investments in customer loyalty.

  • 80.0% of companies that measure the ROI of their loyalty programmes reported a positive ROI with an average of 4.9 times more revenue compared to expenses.

  • 78.6% of respondents who already have a loyalty programme are likely to update it, with a 7 percentage point increase over the previous year.

  • The average annual spending of members redeeming personalised offers is 4.5 times higher than those who have never used such offers.

 Strategies that focus on customer satisfaction or customer retention alone (in terms of  product satisfaction or need fulfillment) are no longer sufficient. Increasingly, companies are exploring how to activate consumers through engagement linked to the emotional return of a consumption choice. In this way, the customer journey involves a different stimulus, one that triggers a purchase by activating a sense of satisfaction.This is done through cultivating an emotional connection tying a customer’s values to a brand’s. It’s a new, profoundly transformative approach that places the consumer’s ethics as a key indicator of satisfaction and, consequently, affiliation to the brand. As predicted, it is now widely reported and accepted that one of the most important links is between consumers and the ethics of purchase.

Today’s consumers prefer to spend their money on products, services, and experiences with a low environmental impact and full respect for the rights of workers involved in the product’s supply chain. This same data shows favorable outcomes for stakeholders, especially for companies that have chosen to broaden their values and mission to steer towards sustainable policies and Corporate Social Responsibility (CSR).

According to “The Sustainable Consumer,” Deloitte’s 2023 report, one in three people claim to buy only from brands they trust, pay attention to quality certifications, and carefully look for and select products based on sustainability criteria.

It’s easy to imagine how a lasting bond can be established between these well-informed consumers and their favorite brands. But what happens when a less attentive or simply less informed consumer enters the customer journey? In this case, it’s not so obvious how to form  a solid bond, particularly with new consumers who may need more information or simply an added incentive. This is where Green Loyalty Programmes come into play.

What Is a Green Loyalty Programme?

Green Loyalty Programmes are an innovative style of loyalty programme that aims to engage consumers and invite them to make sustainable choices. Their goal is to reward consumers who frequently make low-impact purchasesand adopt environmentally friendly lifestyles. However, this special type of loyalty programme  has another significant advantage: it encourages consumers less knowledgeable about  sustainability to become more aware and implement green best practices.

The post-pandemic digital acceleration has favored the arrival and activation of new touchpoints where consumers can be “met.” These can be smartphone apps or web applications, multimedia content, or simply notifications and alerts that can reach consumers at any given moment. These are contemporary tools that shift the focus from a strategic aspect of rewards to a broader, holistic one, aimed at increasing consumer engagement not only on the loyalty front, but also in brand affinity.

A study published in Nature observed that “Gamification can represent an active strategy to encourage green consumption behaviors, as it provides users with immediate feedback, social recognition, and intrinsic motivation to engage in sustainable behaviors.” Bringing users and companies closer to sustainability through gamification strategies proves to be a winning approach to educating, engaging, and rewarding consumers. Here’s why.
Those who participate in these programmes earn points every time they perform actions that reinforce a culture of sustainability. Through simple gestures such as choosing the most environmentally friendly means of transport or learning to direct purchases towards low CO2 emission products, goods, and services, consumers demonstrate a genuine commitment that strengthens brand loyalty and pushes them to adopt increasingly virtuous behaviors for as long as possible.

From a reputational point of view, adopting a green loyalty programme is a win-win for a company, creating a mutually advantageous situation between the brand and the customer.

What Are the Benefits of a Green Loyalty Programme?

Since the post-pandemic period, a growing number of consumers have been searching for brands intent on having a tangible impact especially those who openly share their values and missions with customers, while focusing on a new, responsible way of doing business. Brands that have prioritised sustainability and responsibility have acquired a motivated and loyal clientele, entering a self-regenerating purchase funnel of ‘reward – motivation,’ which is in part also thanks to their use of  effective green loyalty programmes.

Companies that choose to adopt green loyalty programmes quickly achieve a range of results. This includes:

  • Transforming consumers into brand advocates;
  • Increasing consumer engagement;
  • Strengthening the brand’s identity and the company’s sustainable reputation;
  • Creating a value-based relationship with consumers leading to long-term loyalty;
  • Profiling consumers (to obtain sustainability data);
  • Improving brand perception with stakeholders;
  • Building a community and a sense of belonging;
  • Differentiating from competitors;
  • Reducing the organisation’s overall CO2 emissions and resource use;
  • Improving sustainability education.

The more personalised the user experience, the more effective it is. This means creating content that considers a design and Tone of Voice perfectly tailored to its application’s utility. These are small details that are hugely impactful, making the consumer feel at the centre of the experience and encouraging them to progress through increasingly advanced levels of loyalty.

Among its many advantages, the ease of profiling that results from such loyalty programmes is especially helpful. Users themselves choose to share their consumption habits and preferences related to a product or the brand. This data contains valuable insights that can be used to develop a new product or guide a new marketing campaign that is even more tailored to their clientele, and thus, more effective.

How Do You Create a Green Loyalty Programme?

The keyword: clusterize.  An engagement campaign cannot be effective without an in-depth analysis of the audience that is to be targeted. From advertising and speeches  to gamification and loyalty programmes,  speaking to someone means carefully choosing words and a  Tone of Voice that leave no room for misinterpretation of the message. Creating a green loyalty programme specifically requires consideration of: :

  • User Experience;
  • Customer Loyalty;
  • Consumer Engagement.

If loyalty campaigns historically only responded to rules dictated by the analysis of objective needs, today, the scheme is broader and better articulated. It includes connecting the  common values between brand and consumer as well as focusing on secondary affinities, such as interests, passions, and even hobbies. Knowing your consumer means dynamically profiling the habits of multiple personas belonging to the same cluster, and predicting effective multi-cluster communication that remains consistent across generations. As always, to facilitate this work, a brand’s values guide the way, directing the path to reach their consumers.

With the implementation of increasingly effective user design, we have fully entered the era of user-centric experience. Here, consumers are not just consumers, but  the protagonists of a journey with a brand, and they can be grouped into different buyer personas with nuanced and definitive personality traits. 

In this way, a green loyalty programme becomes a recurring journey that always leads to greater engagement, through enhancing awareness. Like all good journeys, its creation is structured in stages that revolve around a central theme: hyper-personalisation of the user experience. Let’s run through the stages required to build an effective green loyalty programme:

  • There can be no loyalty affinity without brand affinity: More than a stage, it is a prerequisite. One cannot even begin to  build trust with a consumer if the brand does not engage with the emotions it evokes in the consumer. Feelings are the engine that triggers the choice.

  • Analysis of the reference market and desired market: After analysing market data and its variations, it’s time to understand how consumers really behave. Who they are, who they want to be, and why they do what they do. This is called conversational data, often provided by the users themselves. The goal is to value them to create a large brand community. Beyond that, correctly interpreting ng this data is fundamental to creating the most personalised user experience possible, which translates into greater engagement.

  • Analysis of market needs vs. prototype consumer needs: Here is where we find the tools required to answer the questions posed in the previous stage. In short, we have to first  look for the matches, identify and then analyse them. This process also allows us to  sketch the outlines of potential strategic partnerships that can be established with like-minded brands.

  • Seek insight: In other words, what to do with all of the produced analyses. It’s the moment  where intuition creates the foundations for the programme’s coherence and connects to a previously hidden need.

  • Look to the future and anticipate: This next step will follow from gaining insight, provided it is the correct one. In the specific case of green loyalty programmes, it is important to keep a vigilant eye on the trends in the vast world of sustainability in order to know what has already been widely covered and what could become the leading theme of the moment.

  • Align this analysis with the green programme: The goal here is not to involve consumers in a loyalty circuit that is an end in and of itself, but to steer consumption choices towards actions with a positive impact on the Planet and its inhabitants.

  • Review the model and ensure it aligns with the brand’s and consumers’ values: This is more or less the formula to ensure that everything defined so far works. The keyword here: coherence.

  • Insert the pillars: Education and engagement are two of the best pillars contributing to the effectiveness of a green loyalty programme. There are many others, and they should always be evaluated as needed, never forgetting their function and actual application.

  • Identify touchpoints: It’s time to think about the places, physical or digital, with which consumers will come into contact. They can merge, interact, and create a multi-channel path that makes the loyalty programme even more exciting.

  • Prototyping: It’s a valuable tool that allows us to create quick and useful study models to experiment and test ideas. Like a 3D model, prototyping helps us to see cracks or defects  in advance and intervene in time.: How can you do this? Through experimentation, expose the work to criticism, make controlled mistakes, and be sure  to stay open to  alternative ideas. To speed up this phase of the process, A/B testing comes in handy, allowing for the simultaneous launch of two or more similar experiences and comparing the results to monitor trends. These tests are usually subject to a prototype cluster of personas and target users with the final objective. Once it’s confirmed  which of the two, or more, prototypes works best in terms of retention and engagement, the programme model is officially determined.

  • Bring the actual campaign to life: This is the phase of strategic creativity where all of the research done thus far can actually service a sustainability agenda.

  • Regulations: all rewards involving prizes, rankings, and points revolving around a competition need to be managed according to the prevailing regulations in the countries where the programme is held and in any participating foreign countries. All aspects related to privacy and the security of consumers’ sensitive data are almost always the responsibility of the competition organiser. Therefore, the success of the programme involves good legal preparation on current regulations.

According to a survey conducted by Yotpo, over 84% of respondents globally stated that they are more likely to buy from a brand whose values align with their own. The figure rises to 90% when the respondents are Gen Z.

Within this same report, it was found that consumers are still inclined to purchase when other sustainable factors – like labour ethics, social rights, and equality – are considered in addition to strictly environmental themes.

Creating the perfect green loyalty programme means genuinely assessing present needs while anticipating the market trends  of tomorrow’s consumers, and their ethical values.

How Can You Measure the Effectiveness of a Green Loyalty Programme?

Once the programme is set up and tested, all that remains is to measure its effectiveness. To define the ROI (Return on Investment), it is necessary to open a small, albeit necessary, parenthesis on the subtle, though important, difference between customer retention and  a customer loyalty programme. Only then can you set the right indicators.

As is often the case, all good answers start with a good question. In this instance: is consumer trust actually due to the success of the programme, or is it the result of a very strong brand affinity, being the happy outcome  of high customer retention?

To ensure objectivity, one can start by observing some measurement indicators, also called KPIs, such as:

  • Customer Lifetime Value (CLV): This represents the total value a customer brings to a company during the entire duration of their relationship. It is calculated by combining the profits generated by the customer and the expected duration of their loyalty. A high CLV indicates that the customer is highly profitable and allows directing marketing strategies to maximise it.

  • CSAT (Customer Satisfaction Score): This  metric  refers to the level of customer satisfaction with a product, service, or experience. It is often measured by a simple score from 1 to 5. A high CSAT indicates that customers are satisfied and likely to remain loyal.

  • CES (Customer Effort Score): This measures the perceived effort customers experience when interacting with a company, for example, to resolve a problem or complete a purchase. It is often measured by asking customers how easy or difficult it was to complete a task, on a scale from 1 (very difficult) to 5 (very easy). A low CES indicates a simple and smooth experience for the customer.

  • NPS (Net Promoter Score): This metric evaluates the likelihood of customers recommending a company, product, or service. It is calculated by asking customers how likely they are to recommend the company to others, on a scale from 0 to 10. Customers are then divided into three categories: detractors (0-6), neutrals (7-8), and promoters (9-10). NPS is the percentage of promoters minus the percentage of detractors. A high NPS indicates a loyal and satisfied customer base.

How AWorld Supported Conad in Creating a Green Loyalty Programme

Integrating gamification and sustainability elements into a loyalty program can serve as a strategic lever to maximise the initiative’s value. This can lead to greater participation, interaction, and loyalty. Consequently, it is also likely that the most motivated customers will remain connected to the company for a longer period, thus increasing their overall CLV (Customer Lifetime Value). To use gamification as a green loyalty tool, you don’t  necessarily have to rethink a new programme from scratch; sometimes, a good integration is more than enough.

Based on the need to involve consumers in sustainability and communicate the initiative more effectively, Conad, a italian supermarket chain, chose to launch the “Sosteniamo il Futuro” campaign in 2022, an internal loyalty strategy dedicated to its customers.

With their digital loyalty and reward platform already available, Conad chose to integrate a webview in the sustainability section of their app with some functionalities of the AWorld app (a gamification tool relating to the themes of the 2030 Agenda for Sustainable Development). Consumers were offered the entire AWorld navigation experience directly within the Conad app, which customers were already using to participate in reward systems and contests with the supermarket chain.

Within the sustainability section of the Conad App, the banner dedicated to the AWorld webview service engaged users through:

  • Actions and Impact Calculation: a long list of sustainable actions proposed by AWorld, justified and explained to users through the calculation of CO2 impact metrics and benchmark deep dives.

  • Challenges: collective challenges to incentivise users’ sustainable actions, calling them to be part of the global community for positive change.

  • Edutainment: monthly and daily educational paths, in the form of text content, easily readable from a smartphone and optimised to be navigated like stories. These are custom paths on the brand’s key themes and keywords in partnership with or provided by AWorld among the hundreds of thematic paths already available.

The integration of AWorld’s webview in the Conad app, observed over three months, leveraged sustainability learning to earn loyalty points, resulting in an 86% increase in engagement rate and a 30% increase in app downloads for customers. Every recorded action linked to the AWorld App, such as a  completed episode, was converted into a number of loyalty points automatically reported on the Conad App, allowing consumers to “spend” their experience on rewards provided by the supermarket chain’s loyalty programme.

Born from the urgency to encourage sustainable commitment of citizens and companies, AWorld has overturned the usual narrative rules on sustainability. They have used green gamification as a tool to not only engage, educate, and incentivise people to do their part in protecting the Planet, but also to measure users’ positive impact worldwide. Through the gamification of green themes, AWorld contributes to spreading awareness about the 17 goals of the 2030 Agenda for Sustainable Development and its 169 targets, and, crucially, creating a culture around this. Action after action, users learn to reevaluate the emotional and environmental impact of their choices on the planet and redefine the future in a way that is ethical and sustainable for all. 

A catalyst for green culture on a global scale, today AWorld is the only official app chosen by the United Nations for the ACT Now campaign and a partner of the European Climate Pact. Awarded in 2023 by Google as the Best App for Good, it has delivered both  user engagement and concrete results, positively influencing impact culture to transform the way organisations interact with their stakeholders on sustainability issues.

Thanks to AWorld, over 21,000,000 positive actions for the planet have been carried out in just three years.

Learn more about AWorld, the change starts here.

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sustainable company? Engage your employees.

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The key to build a sustainable company? Engage your employees.

Find out now how to engage your employees with AWorld’s FREE GUIDE and boost your company’s sustainable transformation.

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