Do you earn Loyalty points on your credit card spends?
Do you know your loyalty points balance?
Did you know your points can help a social cause?
A random sample of cardholders reveal that a majority of credit card holders cannot answer 2 of the 3 questions in the affirmative. Credit card companies issue an annual value upwards of Rs. 1500 Crores and a majority of which goes unused or expires. Loyalty programs including retail, airlines, and hotel programs are estimated to have upwards of Rs. 15,000 crores in member accounts as reward points.
Imagine if even 1% of this were channelized annually towards doing social good or if 10 million members donated 100 points. We could plant a lot of trees, save a lot of plastic from reaching the oceans, or send several children to school. Your reward could be your gift to the next generation.
Loyalty program reward catalogues historically have been designed as a ‘thank you for your custom’ catalogues and not seen as an incentive to influence the future.
In fact, loyalty programs should not only be about rewards, but more importantly, it should be about changing behavior. This change of behavior can motivate members as they start to see the impact their points can make.
Today’s consumers are more about saving our environment and increasingly want the brands they purchase to do the same. An increasing majority of customers are interested in buying from brands that are socially conscious and environment friendly. Our World can become a sustainable world, if we can use programs and points to incentivize behavior change.
Research published indicates that a small percentage of Frequent Flyers are driving obscene levels of global emissions. Aggregation across research indicates about 1% of the world population is responsible for 50% of emissions from all air travel.
How to Create More Sustainable Loyalty Programs
I urge that airlines and all brands proactively address these issues to improve loyalty program attractiveness for younger generations. In today’s world of climate consciousness and environment protection, the customer who consumes too much is seen as doing damage to the environment and is anathema to the socially conscious next generation. Loyalty programs and in particular FFPs need to recognize this emerging trend and design to ensure its top tier (by value) still remains the aspiration for their best customers and not seen as a group of inconsiderate consumerists.
Practical suggestions to address the issue, like simple design tweaks can change behaviour and be the trend setter for programs, this can be both on the earnings as well as redemption side. Members can be incentivized for traveling light, paperless travel, low carbon routing, opt for plastic free consumption, exchanging old products, as well as options to redeem points or miles to donate to local charities and support environmental issues, plant a tree, promote plastic free consumption, or uplift a lesser privileged child. It’s time to re-position platinum and black tiers as human friendly tiers of concerned humans rather than be seen as consumerists depleting our ozone layers.
Redemption options and higher point earnings incentives for energy saving models of air conditioners, refrigerators, TV’s, and energy consumption devices, for booking green mobility vehicles, use of public transport, refill packs, recyclable packaging, environment safe products.
Loyalty programs can offer solutions to almost every consumption category, provided we approach it with the right design philosophy and objectives. Instead of tiers based just on value you could create tiers based on building communities. A Green community focused on eco-friendly warriors, a Blue community based on protecting our oceans, a pink community focused on inclusivity, our world and program can become more colourful than the standard Blue, Silver Gold, Platinum we have attributed to value.
In the hospitality space, The LaLiT hotel group has designed their program for members to participate in their existing social initiatives of creating sustainability and inclusivity. Smita Khot CEO ‘Points for Good’ says “It’s a matter of time before more brands and loyalty programs come on board and create solutions for sustainability.”
Emotional Bond With Consumers Work Better
Whether you agree with forecasts of climate change or not, the issue will remain in the public eye for the foreseeable future, and it is wise for retail brands of all types to consider how they manage their business. Loyalty programs are the home of trusted communication with frequent customers. Shouldn’t brands communicate their concerns and propose solutions through the medium of the loyalty program and continue to cement brand “fandom” in the process.?
Credit Card programs can create change behavior by offering customers their carbon footprint and incentives for reducing this. Creating truly loyal customers needs brands to create deep emotional bonds. Research is clearly indicating that loyalty is not built only with points but by creating emotional bonds with customers. Consumers and in particular GenZ cares deeply about sustainability, social responsibility, and diversity, seeking brands that share their values and contribute to positive societal impact.
Today ‘Points for Good’ is a platform conceived with the objective of helping brands connect with consumers through a common purpose. A belief that donating points for a cause that consumers are passionate about resonate with them and create true emotional bonds. With that belief the platform has been built with an alignment with the 17 UN Sustainable Development Goals (SDGs) and now cover 9.
Different brands and programs cater to different segments of consumers each with their own passion and causes that are close to the heart, ‘Points for Good’ places this choice in the hands of the consumer with 40 projects through its 18 NGO partners. These range from educating children, empowering the girl child, planting trees, helping animals off the street, supporting the elderly, promoting sports, health and livelihood benefits.
There has been a great response from consumers and an instant connection with this way of using their points to do some good. Today ‘Points for Good’ has enabled almost every bank in the country to donate their points to any of the causes listed. With over 75 million points already donated towards charity, this is hopefully just the beginning.
The Pandemic was a period of reckoning for many, the realization and understanding that life was about caring for each other, for helping those who did not have the means, and just reaching out to other humans. With no other options for redeeming points, members of American Express and HDFC came forward to donate a large number of points to provide medical support and food to those in need.
We have miles to go. If members of frequent flyer programs, frequent guest programs, retail loyalty programs and even market place loyalty programs join the platform, we can truly make everyday giving a culture with members through their points. Our promise to brands is that your customers will become even more loyal when they can donate their points to a cause that is close to their heart.
Making giving easy is an objective with ‘Points for Good’ so individuals do not feel the pinch on the wallet. Members can give the points they earn in their everyday spends. “Whether it’s a dinner, or a holiday, the points you earn can help a child go to school, or provide support to someone fighting cancer, you just don’t need to dip into your wallet for that” says Smita Khot CEO ‘Points for Good’. You just need to remember that you can #makeeverypointcount by just donating some of those points.
