Is Sustainability in Loyalty Programs Crucial to Retain Customers in 2023?

Along with the rapid digital revolution, the awareness of customers towards the environment has substantially increased. Gartner predicts that sustainability’s role in business will accelerate in 2023 and beyond. Customers’ growing awareness of green earth is a sign of behavioral evolution for marketers.

More than 63% of respondents agreed that sustainability is crucial for staying loyal to any brand. With access to information about everything, customers want brands to commit to shared values in achieving sustainable goals. 2 out of 3 customers are belief-driven buyers, making sustainability a top priority for brands.

Blending sustainability with loyalty is the key!

66% of customers are ready to pay extra for brands aligned with sustainable goals. For example, Madewell offers a $20 discount for its loyalty members when they return old jeans to their partner stores. Brands stepping up with rewards for sustainable goals are reaping benefits.

Carbon dioxide emission is a top concern for customers around the globe. As a result, brands with carbon offsetting programs are attracting more customers. For example, Shell Go+ has a CO2 offsetting program where loyalty members can join and continue fuel shopping. Brand purchases carbon credits matching the amount of fuel bought by program members.

To win customer loyalty, brands must acknowledge the role of a holistic approach toward loyalty programs. Customers chase sustainability, but brands should make it easy for members to give back to the environment and society. Recent years have embraced empathy among customers.

Brands are winning customer loyalty with sustainability.

1. Patagonia – 100% commitment to the environment.

The well-known brand has environmental sustainability at the core of its business. It’s loyalty program – Patagonia Pro is a premium program that has pledged 1% of its sales towards the restoration of forests and the preservation of the natural environment. The brand has acted strongly on its promise of safe practices in manufacturing products and enabling the environment to improve simultaneously.

2. IKEA – inspiring sustainable actions

IKEA’s loyalty program members get exclusive discounts for shopping sustainable products across dining, textile, furniture, and other categories. The brand couples sustainability firmly with a loyalty program. It runs contests for its loyalty platform members aimed at inspiring sustainability initiatives.

With robust technology infrastructure at the backend, the brand knows customer expectations and offers customized rewards. Also, integrating gamification in rewards for sustainable rewards ensures higher engagement rates. Furthermore, with more than 180 million loyalty program members, the holistic loyalty approach ensures consistent growth of the loyalty program.

3. Costa Coffee – sustainability comes first.

Following the pandemic, the brand revamped its loyalty program leaning towards sustainability. Even as a business, producing reusable cups and partnering with charitable organizations has proven the brand’s affinity towards sustainability.

With its loyalty program, it encourages people to take sustainable actions. Members can get a free coffee cup when they use 4 reusable cups, whereas regular cups need to buy 8. The loyalty program is accessible through a mobile app with educative content about the sustainability initiatives of Costa Coffee.

Sustainability in action = Sustainable revenue growth

The need to go sustainable is for more than just meeting customer expectations. The brands mentioned above have increased their sales significantly after deploying sustainability-driven campaigns. Patagonia, for example, experienced a 30% growth in sales when they launched their “Don’t buy this jacket” campaign. They focused on reduce, reuse, and recycle messaging.

Similarly, more than 16% of brands are introducing rewards for sustainability in their loyalty programs.

Following are benefits that brands can see beyond increased sales.

  • Increase in physical store visits: With the promotion of returning used products, packets, and clothes, retail brands are experiencing a surge in in-store visits. It allows retail brands to engage customers easily and boost their revenue.
  • Increase in brand affinity: Nearly 75% of millennials prefer connecting with brands with sustainability as their core messaging. Growing global environmental awareness highlights brands that align with a climate-friendly vision. Such brands are celebrated and earn brand recognition without investment. Additionally, it boosts the brand’s presence in social communities opening the gate for referrals and more loyal customers.
  • Loyalty partnerships: To achieve sustainable goals, brands partner with charitable organizations and carbon-offsetting companies that expand the potential member base. Partnerships allow members to use their points and give back to the community in multiple ways.

Shifting to a sustainable perspective demands steadfast commitment from brands. Brands need a holistic approach to include sustainable practices in their loyalty programs. At the same time, through consistent marketing and communication, marketers need to put their brand as the first choice.

Bonus strategies for implementing sustainable behavior

  • Reward customers with coupons for sustainable-first brands.
  • Partner with charitable & environmentally friendly organizations to allow members to donate their points to desired organizations.
  • Replace physical loyalty cards with digital cards.
  • Offer them loyalty points for returning used products using reusable shopping bags.
  • Give them discounts when they donate their points for carbon offsetting initiatives.

Sustainability is not a brand constraint but a catalyst for brand awareness and growth. Integrating sustainability in loyalty software demands a modern tech stack that is future-ready. Successful brands have seamlessly advanced in loyalty platform infrastructure to make it easy for customers.

Furthermore, a data-driven rewards program has allowed brands like IKEA to customize sustainable offerings, resulting in better customer engagement. It’s time to be ready for the future. It’s time to adopt a holistic approach.