The global and digital nature of modern commerce means consumers have more choices than ever. Almost no brand can count on a clear playing field—each enters a crowded field, jostling for market share among dozens or even hundreds of other brands.
To win customers and keep them, a company needs to stand out. Brands traditionally did this with value- or need-based messaging — e.g., “Our product is better!” — and transactional loyalty programs — e.g., “Buy nine sandwiches, get the 10th free!” or “Earn cashback rewards! Free money!”
Today, however, brands are realizing the growing importance of purpose messaging. Consumers, especially from crucial younger demographics, show increased loyalty to brands that resonate with their personal values. A purpose-driven brand can solidify that resonance by bringing its loyalty program into alignment with its purpose, forming an emotional, value-based connection that incentivizes shoppers to become repeat customers.
Offering a more purpose-driven loyalty program
From sandwich punch cards to mileage currencies, brands have rewarded loyal customers with perks and savings for more than 100 years. It is, after all, much easier to sell to repeat customers than to new customers.
Accenture discovered that 63% of consumers prefer to purchase from purpose-driven brands and thus suggested that a brand’s loyalty program be brought into harmony with the brand’s purpose. Aligning a loyalty program with its larger brand purpose not only enables the program to reinforce its brand values but to offer more meaning, integrating brand values into a lasting corporate culture while avoiding some short-term risks of a one-time gesture.
Loyalty programs, by design, are customer-facing vehicles for long-term brand relationships. By publicly aligning a loyalty program with a brand’s purpose, a brand puts its values into practice in a way that garners notice without the need for a bullhorn in the public square.
Ready to align your loyalty program with your brand purpose? You can do so in a number of ways:
Extend the brand. Make your brand values clear through the structure of your loyalty program benefits, whether buyers’ purchases contribute to racial justice, sustainability etc.; its core values can be integrated into the loyalty program. For example, Walgreens Balance Rewards incentivizes members to stay healthy by offering points for movement, tracked on a fitness device synched with the Walgreens app.
Offer benefits for greater good. A brand’s loyalty program is an exclusive group and joining is a sign of a member’s values. Yet instead of offering velvet-rope events meant to feed the consumers’ egos, special perks and benefits can bolster the members’ sense of social responsibility. The mission of REI, for example, is to “inspire, educate and outfit people for a lifetime of outdoor adventure and stewardship.” Program members understand that shopping at REI helps “get more people outside, operate more sustainably, and protect and create access to outdoor places.”
Make it compelling. Offer a purpose-driven value proposition that socially conscious shoppers can’t resist. In other words, cash back and VIP perks might be nice, but younger generations like brands that match donations or contribute a portion of their proceeds to causes. TOMS Passport Rewards, for example, empower members to help improve lives. Through earned-point donations, members can help combat racial injustice, support teachers, and boost frontline medical workers combatting Covid-19.
Make it reciprocal. Harness the power of the “buy-one-give-one” ethic to reward loyal customers emotionally as well as economically. Reciprocity involves an exchange of value; brands get value when consumers spend money on the brand’s products, and customers feel good about providing for others, whether it’s a pair of shoes, glasses, etc. One great example is Mealshare, a program that partners with Canadian restaurants. For each meal sold, a restaurant contributes $1 to Mealshare. The donation helps fund partner charities that purchase groceries needed for meals for those less fortunate.
Creating emotional connections while fulfilling your mission
Loyalty programs that only reward consumers with rational benefits may find members jumping ship when a competitor offers more cash back or better perks. Suddenly, the brands are in a price war, a situation no company welcomes.
A brand that lives out its values, however, is more likely to foster repeat business by customers engaged in its mission. Consumers connect intellectually with the idea of cash savings, but they attach emotionally with a sense of purpose.
In the battle between mind and emotion, emotion usually wins. In fact, Deloitte Digital found that 60% of loyal customers described favorite brands in emotional terms — happy, love, trust.
Loyalty itself is driven by emotion — loyalty to family, to loved ones, to a cause, to a nation. In the hierarchy of purchase motivations, purpose is an emotional trigger that has the potential to foster lifelong brand loyalty.
The Lacek Group, a Minneapolis-based data-driven loyalty, experience, and customer engagement agency that has been delivering personalization at scale for its world-class clients for more than 30 years. The Lacek Group is an Ogilvy company.
