Sustainable practices, which range from minimising a brand's environmental footprint to advancing sustainability goals, have helped create and cultivate authentic brands that resonate with consumer values and strengthen brand image. Sustainable loyalty programmes can be an effective means of boosting customer engagement with eco-friendly practices. These schemes can not only help educate and communicate the company's sustainability efforts but also enhance customer retention and foster brand advocacy. However, many brands continue to encounter challenges such as high costs and a lack of customer awareness about the true impact of eco-friendly practices promoted through loyalty programmes.
The sustainability dilemma
Sustainability is undoubtedly a priority for businesses, with most viewing corporate climate action as essential. They're committed to adopting sustainable strategies and products, yet struggle to transition from intent to action. According to Euromonitor’s Voice of the Industry Survey 2024, less than half of business respondents are incorporating sustainability into new product development, with 44% citing consumers' unwillingness to pay more as a major hurdle. The most significant challenge, however, is effectively communicating sustainability to consumers.
40% of consumers cite high prices as a barrier to making more sustainable purchases
Source: Voice of the Consumer: Sustainability Survey, fielded January to February 2024
They expect companies to offer affordable, sustainable solutions, as the concept of paying a premium for sustainability no longer resonates.
Accelerating purpose-driven strategies with “green” reward opportunities
Sustainability is a value proposition that brands can leverage to better connect with customers. According to 37% of respondents to the Euromonitor Voice of the Consumer: Loyalty Survey, fielded March to April 2024, the biggest obstacle to joining loyalty programmes is the lengthy time required to earn rewards. The key challenge therefore lies in balancing consumers' short-term expectations of benefiting from their loyalty programme membership with the long-term goals of sustainability.
77% of loyalty programmes among the top 100 brands are points-based, while only 17% are community-driven and 23% are value-based
Source: Euromonitor’s Loyalty Brand Tracker 2024
These findings point to a significant opportunity for brands to boost emotional loyalty through more effective sustainable initiatives and rewards as part of their loyalty schemes.
Green loyalty programmes encourage consumers to make environmentally responsible purchases and embrace sustainable behaviours. These initiatives typically reward customers for returning used packaging, choosing greener products, or fostering eco-friendly habits within the community. But is this sufficient to enhance the appeal of sustainable customer loyalty and drive widespread adoption by brands?
Brands, especially in the beauty and apparel sectors, among others, often offer double points for buying refills or sustainable products, provide discounts for returning old packaging as part of a circular economy model, and create platforms for the exclusive resale of used items. They also offer opportunities to donate points to prominent environmental organisations.
Creative approaches to increase green loyalty engagement
Creating engaging experiences and offers to distinguish their value proposition and enhance eco-friendly loyalty strategies has been crucial for market players.
Alaska Airlines encourages the use of sustainable aviation fuel (SAF) as an eco-friendlier substitute for jet fuel, which helps lower travellers’ carbon footprints. In exchange, passengers can achieve elite status more quickly within their Mileage Plan.
In China, Ingka Centres, a major global shopping centre operator, launched the “Livat Green Points” initiative in 2023. This programme encourages consumers to adopt healthier green habits, by walking more, using their own cups, driving electric vehicles, and engaging in educational activities. Points earned through the programme can be redeemed for sustainability-related gifts or donated to environmental organisations.
Sainsbury's in the UK has recently announced that customers who charge their electric vehicles at its fast-charging stations will earn three Nectar points for every pound spent, compared to just one point per pound for other purchases.
What next?
Green loyalty programmes can enhance brand image, foster an emotional connection with consumers, and effectively encourage the purchase of more sustainable products. However, these schemes must offer immediate rewards and lower prices to be truly effective. Companies with loyalty programmes that incentivise sustainable behaviour, reward green actions, and promote reduced consumption proactively will successfully integrate sustainability into their business strategies and ultimately distinguish themselves from the competition.
Read our insights, Points for Purpose: Micro-Donations in Loyalty or Affordable Sustainability, for further analysis on loyalty and sustainability trends.