Loyalty Programs for a Good Cause in a Time of Social Justice
In the immortal words of Bob Dylan, “the times they are a-changin”. This comes both as an immense relief and as a rally cry. Concerned citizens across the country are doubling-down to end systemic injustices while strategizing on how to maintain the forward momentum of recent weeks. And the loyalty world has responded to this state of the nation with ardent enthusiasm; many brands are now building social justice activism opportunities directly into their programs by letting customers donate a portion of their points to support the causes they admire.
Loyalty program strategies like these that support the bettering of society can also be known as "Cause Marketing". It was a topic that came up in one of our recent conversations. These programs can be good for both customers, brands, and society itself. It’s no surprise that emotional affinities are deeply intertwined with purchase decisions and loyalty inclinations. It turns out the charity-specific tactics are associated with specific, highly desirable performance metrics:
“Brands empowering their consumers to donate to a cause they love can expect to create greater emotional engagement and loyalty as they tap into something their consumers already care about — their charity of choice,” said Wendy Martin, CMO at For Good Causes — a company that enables consumers to donate their loyalty points, cash back and air miles to over 20,000 charities via brands like Vodafone, BP, Quidco and Rakuten. “Emotional connection translates into a better share of consumer spending, with customers typically spending twice as much with brands they are loyal to and having a 300% higher lifetime value, according to data from Motista. Right now we are seeing a surge in community spirit with consumers and brands keen to support societal, environmental and community activity more than ever.”
For those needing a dose of positive inspiration amidst restless times, here are a few empowered programs with their finger on the pulse right now.
Sephora Allows Customer Donations to National Black Justice Coalition
In a move that reflects societal attitudes towards stemming racial injustices, Sephora has updated its Beauty Insider Rewards Bazaar program, establishing a feature for customers to redeem their points for a donation to the National Black Justice Coalition in place of a cosmetic sample. Redeeming 500 points will give the American civil rights organization $10 while 1,000 points will give $20 and 1,500 points will give $30. Sephora has tapped into social media to communicate the new feature, and to re-iterate that it has partnered with pivotal organizations such as the National Black Justice Coalition.
American Express Reinforces Charity via JustGiving
While American Express recently made the news after donating $1 million to the NAACP Legal Defense and Education Fund and the National Urban League, they have had charitable utility built into their program for some time. The organization leverages JustGiving, a search platform for fundraising pages that have been created by stakeholders and concerned parties. Non-profit organizations available to select AmEx card holders include Black Lives Matter, the Innocence Project, the NAACP, the National Urban League, and various chapters of the ACLU. AmEx Membership Rewards points are worth roughly 0.7 cents apiece when you donate them through the platform, which is consistent with cash back redemptions or Amazon purchase valuations.
Kroger Community Rewards Helps Customers Give Back
Kroger makes it clear that it is committed to community engagement, positive social impact and charitable giving. The brand embraces community diversity, with an emphasis on local institutions and smaller geographic regions – a great way of transcending its status as one of the largest grocers in the US. The Kroger Community Rewards program is a standalone feature of its expansive Shopper’s Card loyalty program, and allows customers to engage in ongoing charity donations to the institution of their choice by linking fundraising directly to their shopping habits.
Will More Programs Get Charitable?
It’s almost certain that as customer impulses for good grow, programs will be there to intercept their tendencies and provide a channel for fundraising and institutional support. But these types of program features aren’t without their challenges — the costs associated with them can stack up and can create cash flow concerns for some brands that adopt them.
“If you convert points to a donation, someone actually has to give the donation,” explains retail analyst Sucharita Kodali. “…points and miles have a monetary value. If you use those points and miles to make a donation, the company holding them needs to convert them to actual cash from their balance sheet. The airlines and hotels would prefer you use your points for plane tickets or hotel rooms, since the variable cost — especially now — is relatively low.”
But for those hungry for justice, charitable donation integrations — and the loyalty programs that embrace them — can speak volumes.