Sustainability. A word on the lips of our youngest, captured in the imaginations of our brightest, and the next best way to nurture customer loyalty. In this blog post we’ll look at:
The importance of aligning your brand to customers’ values to build emotional connections and how that benefits your business
Five ways you can incorporate sustainable business practices
Examples of businesses who practise or promote sustainability
Importance of brands having shared valued with customers
How can brands incorporate sustainability and build customer loyalty?
Examples of brands using loyalty programmes to reward sustainability
Importance of brands having shared valued with customers
The conscious consumer is a growing demographic.
Up to 75% of Brits in recent years switched to ethical shopping.
Consumers are increasingly buying from brands whose products are sustainably sourced, manufactured through non exploitative means, and corporately governed in a way that reflects their own values.
The question is, do you have sustainably aligned practices in place that you can leverage? If not, you might be wondering…
Is sustainability relevant in your industry?
It’s a fair question but make no mistake, conscious consumerism is on the rise. As a result, sustainability will inevitably play a crucial role in how customers become loyal to a brand regardless of the industry you operate in.
It’s true that certain industries right now are looked upon more negatively than others when it comes to sustainability. Especially those whose operational procedures, production and transport harmfully impact the environment.
Take this list for example. Top polluters vary from the fuel industry (which is expected) and technology (perhaps relatively unexpected). The point we’re making; your assumptions of just how green your business is may misalign with customer expectations. That could be a real problem later on down the line for acquiring and retaining more customers.
It’s best to consider what impact poor sustainability practices have in terms of customer loyalty for businesses now, so your long term sustainability strategies are more informed and successful in the future.
ESG & Greenwashing
In fact, it’s all the more important for self-titled sustainable brands to demonstrate true eco-friendly practices. As conveying inaccurate ESG (environmental, social and governance) frameworks in brand messaging has unsurprisingly made consumers more cynical. Making up porkies about sustainability is so commonplace now there’s even a word for it; greenwashing.
A survey by Google Cloud found that 58% of executives exaggerated their sustainability efforts when asked about them.
The negative fallout resulted in 9 in 10 consumers disbelieving brands who claim they’re sustainable.
Lack of belief in brands walks hand in hand with low consumer trust. Nurturing an emotional connection without trust is next to impossible. And without an emotional connection, building loyalty is challenging. Therefore it’s important for brands to make sure outward claims reflect internal culture and governance.
However, it’s definitely worth mentioning, accidental greenwashing also happens. In the same survey by Google, 65% of businesses across various industries agreed that they didn’t know how to implement sustainability efforts which had a positive environmental impact.
Perhaps this sounds familiar to you? Just remember, if that’s the case, everyone starts from somewhere. Below we’ve put together easy-to-implement sustainability strategies which may help you go green…or greener.
How can brands incorporate sustainability and build customer loyalty
We’re not kidding when we say sustainability and customer loyalty are not mutually exclusive. Adopting eco-friendly practices demonstrates beneficial outcomes for your business in numerous ways. Here’s just a couple to get you started:
Reduce the cost of your operations
Enhances customer experience
Improves the value of your products
Offers opportunities to differentiate from competitors
Let’s dive into each of these points and look at some strategies to get you there!
1) Green Deliveries
Green deliveries are a great way for businesses to cut down delivery carbon emissions. Accomplished by filling trucks to full capacity, delivering goods to customers who live closer together, all the while finding the best route. Green routes optimise your supply chain to reduce its environmental impact.
A study by the University of Washington showed green deliveries actually cut carbon emissions down by half! Compared to personal vehicles which emitted double the amount of carbon levels.
The study also ran a test case in Seattle. The results of which looked even more promising. Trucks were shown to produce 20-75% less carbon dioxide than shoppers driving to grocery stores.
Tide is turning
Arguments against green deliveries focus on longer delivery times. At one time this might’ve been a problem for businesses. However, we’ve seen how the tide is turning.
Over half consumers surveyed said they’d be happy to wait longer for their order if it meant environmentally-friendly home deliveries were the cause. With even 20% stating they’d be happy to pay more to support sustainability efforts. As we know, the willingness to pay to more is an example of customer loyalty.
Another huge benefit to your business is fuel savings. The study by Washington University noted that by optimising delivery routes around clusters of customers, the journey is cut shorter, less fuel is used and more money is saved.
2) Pick Up Points & Drop Offs
Pick up points are prearranged destinations for customers to collect their order. Their versatility allows for customers to pick the most convenient destination at a time which suits them. Instead of waiting home all day for a package or having to pick it up from a post depot after work. Not really ideal….
Here lies the great benefits of pick up points. Not only are they kinder to the environment, they’re super convenient! And that makes for an enhanced customer experience. Making these a great candidate for starting your sustainability and customer loyalty strategies.
Sentiments vary across the board
In the UK there’s approximately 43,083 pick up and drop off points (PUDOs). Mass adoption from the Royal Mail, Collect+, Hermes and UPS, shows there’s a growing demand for PUDOs as attitudes towards them change.
Yet, a report in Belgium showed the majority of consumers preferred deliveries at home or the workplace. It showed 72.2% of consumers used PUDOs because they missed a delivery at home. Compared to just 24.4% of consumers who actually preferred to order online and collect at a PUDO.
Those who prefer collection points referred to these main benefits:
Possibility to chain several activities in a single trip (10.6%)
Notice all these points are orientated around convenience? Comes as no surprise when we link the dots between flexibility, convenience and enhanced customer experiences.
Here’s where it gets interesting. Of those who used a PUDO (even people who had no choice), only 1.3% were dissatisfied with the service. Various reports and studies confer the same result that overall customer opinion towards PUDOs is average at worst or slightly positive at best.
Demographics justify PUDOs
Bear in mind that sentiments among your consumer base will begin to drastically change as Millennials and Gen Zers accrue more buying power. It’s good to offer the option of delivering to PUDOs now in order to incentivise those demographics to shop with you in the long term.
3) Sustainability Training
The link between sustainability and customer loyalty is particularly apparent when it comes to eco training. Salesforce conducted research on the Sustainability Talent Gap and found:
8 in 10 global workers want to improve workplace sustainability. Eco training also shows evidence of mitigating scepticism too, albeit employee scepticism.
Employees are customers too!
However, it’s worth remembering that employees are customers too! Their opinions, thoughts and insights often reflect and align with those of your customers. As evidenced by the shared desire of consumers and employees to see more sustainable brands.
Orientate training and hiring of employees around sustainability. That way, you empower your employees and put them in a position to substantiate sustainability credentials. Leverage this on social media channels and your website. Show consumers you’re taking action through eco training and education.
After all, 57% of business executives list eco training employees as top priority right now. It’s better to get on top whilst there’s still time, rather than let the window of opportunity pass you by.
Which leads onto our next point.
4) Communicate your brand’s mission
Sustainability boasts a whole plethora of positive connotations. There’s not much else better for your marketing efforts! What it unlocks in terms of brand loyalty is nothing to scoff at.
A positive brand image converts loyal customers into higher spenders and brand advocates by up to 42%.
How does a brand mission statement factor into this we hear you ask?
Sustainability and customer loyalty are bridged by emotional connection. A mission statement clearly sets out what’s important to your brand. Communicating these values and ethics which are aligned to consumers resonates with them and reassures their purchase decisions.
Higher perceived value drives revenue
Mission statements also improve brand equity. Essentially improving the perception of value of your product or service. As their quality satisfies consumer needs and the way the business operates exceeds expectations. When both of these points are combined, it improves the overall perceived value of your offer.
Cost-of-living crisis outweighs sustainability for some
It’s worth noting however that the cost-of-living crisis diminishes sustainability as a top priority for some consumers now. Only 41% of consumers of consumers are willing to pay more for a sustainable product compared to 57% in 2020.
Still, 41% of consumers is still a healthy number. If anything, you want to do everything you can to keep hold of customers still able to afford premium prices of sustainable products. Even more so if that’s what your business is built around.
5) Differentiate your loyalty programme with sustainable rewards and incentives
Like we said in our previous point, the cost-of-living crisis knocks sustainability off the top perch for people feeling the pinch. We can’t get away from the fact that sustainability is a low priority for many people who are struggling financially.
With this in mind, you also need to consider if proving your eco-credentials is all that important to build customer loyalty in your business? This’ll depend on what you sell, the demographic of your target audience, and truthfully whether you value sustainability too.
If that’s the case, a great way to circumvent the cost-of-living crisis, whilst satisfying eco-credentials is…you’ve guessed it – a customer reward and loyalty programme!
Loyalty programmes are inclusive
Implementing a loyalty programme into your business operations benefits you and your customers in a number of ways.
Firstly, in spite of the CoL crisis, a reward-driven loyalty programme helps you deliver value to customers who might be struggling by offsetting the cost of your product or service. A reward programme offering brand partner discounts and deals related products that aren't linked to spend, can help achieve this.
More consumers than ever want brands to help them become more sustainable. You’ll find countless examples of how businesses go about doing that but most articles miss out loyalty programmes. Ignoring green loyalty schemes is a fundamental flaw particularly in light of economic hardships.
Which suggests many businesses are overlooking the relationships between loyalty programmes and sustainability. Insinuating that there could be space in the market for leveraging sustainable loyalty programmes as a powerful, emotionally evocative point of difference.
In that case you’d net higher value customers through emotional connection and higher perceived value. Whilst simultaneously incentivising customers with lower disposable income to maintain eco-friendly habits in return for valuable offers and rewards. Thereby helping both demographics become more sustainable and meeting their wants and expectations.
What’s more, customer based loyalty programmes open up the way for innovation. For example, sustainable brands could reward customers discounts on their next purchase when they return empty cups. Such initiatives are a great source of word-of-mouth referrals and brand advocacy.
Examples of brands operating sustainable loyalty programmes
Overall, more businesses are switching towards sustainable means of operation Although the cost-of-living crisis deters some businesses from prioritising sustainability higher than they did before.
Still, those who can afford to persist going green and those who built their entire business model around sustainability, stand to gain more growth in the long term.
We’d even go so far to say now is the perfect time for outpacing competitors’ sustainability efforts. And as we’ve already seen, a green loyalty programme gives consumers the chance to be truly sustainable and reap the rewards of eco-friendly habits.
Let’s take a look at a couple of examples of green customer loyalty programmes.
It’s far too easy to roll eyes when industries like airlines launch green initiatives. Like we said earlier, everyone has to start somewhere. When it comes to Etihad, they started on the right course and set new heights for other airlines to follow.
Etihad Guest is the name of their loyalty programme. It boasts an excellent roster of partnered brands. The list of partners range from Montblanc and Joyalukkas, premium lifestyle brands like Live Free and ASMALLWORLD.
The loyalty programme allows members to:
Earn Tier Miles by offsetting emissions from driving and activities like home cooking and cooling homes
Donate Tier Miles to a green cause
Rewarding eco-shoppers and passengers who bring less baggage
Go digital with their membership card to reduce material waste
As a result, Etihad Airways are incorporating sustainable fuel options, using more electric vehicles in supportive roles, and working with other airliners to promote cleaner skies.
They expect to reach net zero by 2050 and aim to halve 2019 emissions by 2035.
High street retailer H&M currently issues £5.00 vouchers to customers who deposit unwanted items of clothing and textile accessories. The fashion industry is synonymous with waste and high emissions.
H&M are looking to close the loop of wasteful production cycles. Unsteady vying for true sustainability via circulatory design – a production process which sees clothing recycled at scale into renewable materials.
In Stockholm there’s also an initiative called Conscious Exclusive collections. This let’s shoppers rent items of clothing for the night.
Since 2020 H&M’s Garment Collection programme has collected 18800 tonnes of unwanted clothing. Which is the equivalent of 94 million T-shirts, reduced into textile material for circulatory production.
A Spanish startup founded in 2017. Liight reward promotes sustainability in the corporate world. (Remember when we said employees are customers too!). The app gives employees the tool to track their sustainability on the go and involves workers in Corporate Social Responsibility strategies.
The app includes:
Discounts with partnered brands in return for sustainable living – including rewards on fashion products, tech and leisure
Includes gamified content which promotes challenges for healthy lifestyle activities
Tools to calculate reduction of emissions, waste and carbon footprint by analysing day to day activities e.g., using public transport, recycling habits and physical activity
Just take a look at their website to see how the fantastic impact this app has on business.
That’s a wrap
So, sustainability is absolutely relevant in your industry. Whether it’s relevant to your business is entirely up to you. Just on the off-chance that it isn’t, you’re missing out on a real good opportunity to build incredible, long lasting loyalty! Whilst also making a positive impact on the world.
Sustainability is a collective social responsibility at the end of the day. One which we’re all expected to shoulder to some degree. Sooner or later a query to your practices could be scrutinised from sustainability customers. People talk with their money and more customers than ever are willing to change the world with their wallets.
Do you really want to miss out?
Before you go, time for a quick chat?
Of course, you know your business better than anyone else. But that shouldn’t stop you from reviewing your business practices, even if you sell sustainable products. We’re always on hand to help out. So why not give us a call or drop a line for more information on green loyalty programmes.