Kula Causes turns points into donations
In the US, Kula Causes has unveiled a new online platform that allows consumers to convert unredeemed loyalty rewards points and frequent flyer miles into charitable contributions while simultaneously allowing businesses to target consumers through the specific causes they support.
With more than US$16 billion worth of US loyalty points going unredeemed each year (representing nearly 80% of all loyalty points issued), many of these are what Kula Causes calls 'orphan points', where the consumer simply does not yet have enough points to earn a reward, but the issuing programme operator still has to carry this 'breakage' value on their balance sheet.
Consequently, Kula Causes was designed to allow members of loyalty programme to convert any unused points or miles into donations to any one of millions of charities around the world, opening up a new option for loyalty scheme managers not only to clear unused points but also to reach consumers in an emotionally meaningful way.
"Today's consumer demands more from customer loyalty programmes," said Bill Hanifin, co-founder of the Customer Strategy Network (CSN), an organisation that studies best practices in consumer loyalty programmes. "They want rewards offering choice, liquidity and immediacy."
Although many loyalty programmes offer a small range of charitable donation options, those causes receive less than 1% of all rewards issued annually, which results in a missed opportunity for meaningful engagement through cause-related marketing efforts. Kula Causes therefore aims to how reward programme members support a cause they personally care about from any one of over 2 million non-profit organisations in five countries, with more being added as time goes on.
"More than a decade of work in the non-profit sector made evident to me the massive divide between charitable causes and the power of the business community, and programmes to help close that gap didn't exist," explained Gerrit McGowan, CEO for Kula Causes. "By offering consumers an easy way to support the causes important to them, charities around the world will gain new revenue streams while loyalty programmes can build more meaningful and engaging relationships with their members."
Consumers will be able to sign up online to become beta users of the Kula Causes platform when the system is opened up to the public in October 2011.