IGD’s UK trend report predicts that there will be more loyalty and reward scheme competition in 2023. One stated reason for this is the evolution and recent successes of existing schemes (e.g. Tesco Clubcard) as well as the launch of new schemes such as Asda Rewards, Pret Perks and MyMcDonalds. These are all big businesses making big movements in the loyalty space.
To stay ahead of the curve, retailers need to find ways to differentiate their schemes to incentivise shoppers to shop with them. When you think about a typical loyalty programme, you probably think about transactional “earn” and “burn” schemes where the customer gives their data in order to “earn” something which they can spend or “burn” at a later date. The reason behind the success of this tried and tested strategy is its simplicity. There is a clear value exchange for the customer – they know what they have to “give” in order to “get” something in return.
So, customers understand the foundational principles of transactional loyalty, but these types of schemes have been around for ~30 years now and, unless the value exchange is incredibly rich, just doing points for cash won’t be enough to engage all of your customers. So, retailers need to think beyond the purely transactional, designing and executing a myriad of other tactics to drive engagement in the scheme and ultimately, loyalty.
This is the perfect segue to emotional loyalty. If you want your customers to be loyal, you must also find a way to create an emotional connection. Zhecho Dobrev, a principal consultant at Beyond Philosophy states that “Emotional connection creates preference over the competition, customers don’t just come back out of convenience”, with supporting research determining that emotional attachment was the biggest driver of value, responsible for 43% of perceived business value.
A burn element that strengthens emotional connection is the ability to enable customers to donate their points in your currency, to a cause they care about. A loyalty programme is the perfect place to match up millions of like minded customers to charities who align with their values. A very practical place too.
The reason this is such a timely initiative is because customers, particularly younger generations, now expect retailers to do more than just sell them a product or service. They expect companies to align with their own values and to positively contribute to social issues that they care about. They expect a retailer to be purpose driven and help make the world a better place. This tactic is the perfect way to trigger your corporate purpose and values and enable customers to more deeply engage and emotionally connect with your brand.
There are a few important factors you need to consider when launching an initiative focussed around gifting donations:
- The participating charities/causes must be relevant and meaningful to your loyalty members
- The causes you support must be aligned with you as a business
- The redemption/gifting process must be seamless
By enabling customers to donate to a cause they care about, you can expect to create greater emotional engagement and loyalty. However, if the customer experience of donating is clunky and difficult, there is the possibility it could outweigh the good and a customer may choose not to repeat the process again.
Charity donations made pawsible
One retailer who is doing this well is Pets at Home. Through their VIP Lifelines Scheme, members of their VIP programme are able to raise “Lifelines” – their currency – for their favourite animal charity each time they shop with them. Pets at Home partnered with Eagle Eye, a leading loyalty and promotions provider, to power this element of their scheme.
How it works
- Members of Pets at Home’s VIP loyalty scheme earn Lifelines (points) on every purchase
- Each VIP member can choose which charity they want their Lifelines to be donated to
- Eagle Eye AIR automatically converts the earned value of Lifelines into a voucher which is sent to each charity participating in the scheme
- The charity is able to securely and seamlessly redeem the voucher in-store or online at Pets at Home
The scheme has over 850 participating charities for customers to choose from, based all over the country. This allows customers to choose the most relevant charities to them, not just in a sense of pet passion, but physically too.
In this case, the alignment of selected charities to the audience is obvious, but the numbers are there to back it up that it works:
~£2m donations each year through the scheme
The loyalty programme was voted the number 1 UK loyalty programme of the year by Blackhawk who praised how easy it is to register and select your chosen charity, as well as satisfying the needs of pet lovers across the UK.
Speaking about Eagle Eye, the Pets at Home team said
“Eagle Eye AIR ensures that we can seamlessly send electronic vouchers to our partnered charities, the integration process was very smooth. Without Eagle Eye it would have been impossible to manage our Charity Lifelines scheme.”
Going back to the headline, everyone wins:
Retailers strengthen relationships with their loyalty members and drive emotional loyalty by partnering with causes for good and providing customers with an opportunity for them to contribute to them.
Customers want to feel connected to something greater than themselves, and want ways to contribute to causes that are important to them, with little to no effort.
Charities will receive much needed financial support through the programme to help them better serve their communities. In return they will likely share their gratitude publicly, acknowledging the Retailer and encourage their members and donors to shop with them.
If this is something your organisation would like to explore, please get in touch with Eagle Eye today.
