At For Good Causes we could see the trend toward brands being increasingly keen to add social impact to the customer facing activities and programmes – especially in response to the increasing demands of the millennial generation.
But our key insight was that although in the UK the public are amongst the most generous nation on earth when it comes to giving to charity, the individual causes that people care about are very personal to them – based on their life experiences and those of their loved ones. In other words you can’t tell people what to care about.
So rather than a brand or loyalty programme choosing just a few charities that they think are important, we believe the model needs to be turned on its head. Let the customer decide which charity they want to support with the value of their points, miles or cashback.
After all, it’s the customer who has earned those rewards, so they should be able to donate them to the cause that is closest to their hearts – whether local, national or international or relating to health, children, the elderly or animals or whatever it is that the customer is motivated by. There are over 200,000 charities in the UK – covering international aid, health, hospices, children, schools and pre-schools, animal welfare, veterans,
the homeless etc etc – and each one has a loyal supporter group who care deeply about their cause. That’s a wonderfully rich emotional attachment for brands to be able to tap into. And it has great positive social impact too!
For Good Causes is currently live as a redemption option with a number of UK retailers including the largest cashback site, Quidco, with over 7.5 million customers, but we envisage establishing this new CSR service widely across the loyalty industry in the UK and internationally.
We’re having great engagement with some of the largest brands and loyalty programme operators in the UK – and are very open for further discussions now. Our simple API integration means the implementation can be straight forward, swift and low cost. And after all, enabling your customer to donate their points to the causes they love has got to be better than upsetting them by allowing those points to expire.
Unused points breakage
But will retailers and other brands operating loyalty programmes not be concerned about missing out on the breakage of unused points, which allows them to credit back liabilities onthe balance sheet?
Well it would be an odd approach for brands to operate loyalty schemes in the hope that consumers won’t use their points so they can save money! That’s a bit like dangling the carrot in front of the proverbial donkey to get them to do their bidding but never allowing them to get their reward. People don’t like being treated like donkeys! And our research confirms what you might expect – that they don’t like having their points expired. Over half of customers are experiencing having their points or miles expired – and 70% of those claim to be either ‘annoyed’ or ‘outraged’ at the experience. That isn’t creating loyalty to the brand – quite the opposite
But I do understand the argument and having run programmes I know the short term pressures to find ways to save on costs.
However, there’s also a positive, financial reason for brands to encourage redemption and especially redemption that creates real, emotional engagement. If my experience of loyalty programmes all over the world over 20 years teaches me one thing it is that customers who redeem their points are massively more loyal to the brand than those who just collect or have their points expire. What do I mean by more loyal? Well, in my experience on every customer measure you can think of, customers who redeem their points significantly out-perform non-redeemers. They buy more overall from the brand, they buy more each time, they attrite less (ie. lapse from purchasing) and they think better of the brand and would be more likely to recommend it.
So it makes good business sense for brands to encourage and welcome redemption – quite apart from it being the fair and right thing to do for the customer, of course.
But is there still a risk that the relationship between brand and redeeming customer becomes transactional, such that the loyalty reward is essentially a pricing surrogate and customers ‘play the system’ with any brand in the sector that offers rewards?
I do think that is a risk for loyalty schemes today, yes. We can count about 200 programmes in the UK and with the average UK customer participating in about 6 programmes, you can imagine that the top quartile of those customers have a great many loyalty cards in their wallets and purses. So the savvy shopper knows that they might as well get the card and collect the points even if they are not really engaging in the programme or preferring to purchase at that brand as a result.
Attending conferences around the world I have very often heard the theme debated about how brands can extend their customer engagement beyond this ‘transactional’ relationship. I’ve also seen some imaginative attempts to identify ways to establish a more emotional connection with consumers.
But at For Good Causes we’re saying there is no need to invent some spurious emotional connection that the consumers may or may not connect to. Rather, start with what your customer already cares about deeply – the cause or causes that, for whatever personal reasons, the customer has passion for. And enabling the customer to donate their loyalty points, miles or cashback to the charity of their choice not only delivers a loyal and engaged customer – it also delivers a positive social impact on the communities in which we live. That’s a great thing for brands to get behind – but is also very fulfilling for the individual loyalty practitioners involved in bringing this to their programme.
Recent research confirms the appeal of enabling consumers to donate the value of their unused Loyalty rewards to charity
(For Good Causes, UK, SmartSurvey Feb 2018, 502 respondents)
- 94% of people had one or more loyalty cards
- Only 49% of people claim always to redeem their rewards – over half people do not
- 52% had experienced having their points expired
- Of those 18% were disappointed, 52% annoyed and 17% outraged
- 70% give to charity
- Of those 37% prefer health charities, 24% children’s, 21% animal, 5% international, 4% environment, 3% arts and culture (and the rest other such as homelessness etc)
- And 68% said they supported national charities, 62% local charities and 27% international (again showing how important local charities are rather than just the large international charities that large brands tend to pick themselves)
- 76% love or like the idea of being able to give the value of their rewards to the charity of their choice
- 66% say they would participate in donating their rewards to the charity of their choice – and millennials are even more keen with 78% saying they would participate