Sustainability in Loyalty – Three Shades of Green (#622)

Paula:  Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals.

Paula:  I’m Paula Thomas, the founder and CEO of Let’s Talk Loyalty and also Loyalty TV.

Paula:  If you work in loyalty marketing, you can watch our video interviews every Thursday on www.loyalty.tv.

Paula:  And of course, you can listen to our podcasts every Tuesday, every Wednesday and every Thursday to learn the latest ideas from loyalty experts around the world.

Paula:  Today’s episode is part of the Wiser Loyalty Series, which is hosted by our partners, The Wise Marketer Group.

Paula:  The Wise Marketer Group is a media, education and advisory services company, providing resources for loyalty marketeers through the Wise Marketer digital publication.

Paula:  And the Loyalty Academy Programme that offers the Certified Loyalty Marketing Professional, or CLMP, designation.

Paula:  I hope you enjoy this weekly podcast, The Wiser Loyalty Series, brought to you by Let’s Talk Loyalty and The Wise Marketer Group.

Aaron:  Welcome back to The Wiser Loyalty Podcast Series, everyone.

Aaron:  It’s a production of Let’s Talk Loyalty and The Wise Marketer Group.

Aaron:  I’m Aaron Dauphinee, the CMO of The Wise Marketer Group.

Aaron:  In this, executive faculty members from The Loyalty Academy, Bill Hanifin and myself join you each week to dig into deep topics based on courses in The Loyalty Academy Certified Loyalty Marketing Professional Program.

Aaron:  It’s good to be back here with you, Bill.

Aaron:  How are you?

Aaron:  Welcome.

Bill:  I’m doing great.

Bill:  Good to be here.

Bill:  Thanks, Aaron.

Aaron:  Wonderful.

Aaron:  For this month’s topic, we’ve based it on Loyalty Academy course number 212, which is an elective course, and that is the Introduction to Sustainability in Loyalty.

Aaron:  This month’s a very short month for us in December, and so we’re going to have a two-part discussion that will unpack what creating quote-unquote sustainable loyalty really means, why it’s so important for brands to pay attention to in this day and age, and to cover a range of examples where we illustrate who’s doing this well, not so well, and everything in between, so to speak.

Aaron:  For course 212, recorded by Charlie Hills at Mando Connect in the UK, we should also give her credit on this.

Aaron:  It focuses on what sustainability means in the context of loyalty programs, and how to build sustainability into your loyalty strategy and approach.

Aaron:  So since the market is never static, we’ll build on that material.

Aaron:  We’ll challenge a few concepts and introduce some new ideas.

Aaron:  Here we go.

Aaron:  So I think the best way to kick this off, Bill, is really a little bit of a definition or at least a frame up of what we mean by this idea of creating sustainable loyalty, because it can bring one of three things really in terms of how it’s tied to.

Aaron:  And the first is it can maintain the financial consistency of your operation.

Aaron:  We think that that’s the role it has in the world of loyalty.

Aaron:  It can also incorporate cause-related marketing to your loyalty program.

Aaron:  So it’s very specific in terms of that kind of view or lens into it.

Aaron:  And then the last is it can be simply a euphemism for long-term success.

Aaron:  So Bill, I have to put it out there.

Aaron:  Which one of these three items is defined sustainable loyalty for you?

Bill:  It’s great.

Bill:  So don’t label me as a lifelong consultant, but the answer is all the above.

Bill:  I know one person who always said, no matter what question you’re asked them, they said it depends or all the above.

Bill:  But I’m not doing that to be vague.

Bill:  I’m doing it for a specific reason.

Bill:  So if you or your leadership are asking this kind of question about your loyalty program, quote, will it make money with loyalty?

Bill:  Will I make money with loyalty?

Bill:  Will the company, then maybe you’re looking at customers through the wrong lens, and that kind of a very singular profit-oriented, short-term focused thought can lead you away from sustainability.

Bill:  So what I’m thinking is the better question to ask is, can I create better customer experiences?

Bill:  Can I deliver more value while encouraging customer, profitable behavior changes, call it?

Bill:  And can I do all that in a financially sustainable business model?

Bill:  Like that’s the question you should be asking.

Bill:  And if you view your customer loyalty efforts through that kind of a lens, to me, you’re taking more of a long-term view, and it’s one that will lead naturally more towards what I would call sustainability.

Aaron:  Right.

Aaron:  And so, I mean, these kinds of lenses are the three definitions that you have here.

Aaron:  Talk to me a little bit more about the second one.

Aaron:  What’s entailed in that second definition?

Aaron:  Like what are you really trying to get at there?

Bill:  Right.

Bill:  Yeah, it is a bit of a play on words, isn’t it?

Bill:  Right?

Bill:  Because we talk about, we were even having a little conversation about green loyalty and sustainability and things like that.

Bill:  So, whenever you talk about those kind of words, it can mean a lot of different things.

Bill:  But, I mean, for me, taking a long-term view and creating a win-win for both the brand and the customer means that you consider the evolution of not just your strategy, but really how you collect and use your data and what technology you use to support your program delivery.

Bill:  So, it also means maybe in particular creating financial models that anticipate what the future is going to look like and allows you flexibility so that your brand can make changes on the fly without having to fundamentally change the nature of the program.

Bill:  You know, in other words, you can make changes, but it doesn’t disrupt your membership.

Bill:  So that very last point is super important because just think about the waterfall of program devaluations that we’ve seen even in the last year.

Bill:  I mean, I believe we’ve seen Starbucks retool their program at least once, if not twice over maybe the last six or seven years.

Bill:  And we saw Duncan do a devaluation just very, very recently.

Bill:  So, you know, there are a couple of examples there in retail, QSR, dining, but we also have seen like these massive changes in travel loyalty, especially remember there was about this time last year, I think, wasn’t it, when Delta did a devaluation and they just got roundly criticized for some of the changes they were making.

Bill:  Just got they were really beaten up in the press and everything.

Bill:  And it was a PR disaster for Delta, yes.

Bill:  But then they did as much repair as they could.

Bill:  But, you know, what’s interesting to me is that other airlines have had similar experiences.

Bill:  And so so much so that the whole industry has caught the attention of the United States Department of Justice.

Bill:  And they recently announced that they were opening an investigation into the frequent flyer programs that are operated by the major US air carriers.

Bill:  So, you know, when you when you track the government’s attention to look at a whole genre of what some people like to dismiss as just a promotional program, you know, you’ve got something very important and you also know that you made some fundamental errors in the way you’ve been managing it for a while.

Bill:  So that that’s really what I’m talking about in that second definition.

Aaron:  Got it.

Aaron:  Got it.

Aaron:  No, that’s very, very interesting.

Aaron:  All of that, for sure, particularly what’s happening in the US and very valid, I suppose.

Aaron:  But, you know, for me, I kind of thought you were going to say that sustainable loyalty kind of refers to cause-related marketing specifically.

Bill:  Yeah.

Bill:  Well, yeah.

Bill:  And it was that too.

Bill:  It’s funny.

Bill:  I was thinking of both.

Bill:  And two sides of the same coin, I guess.

Bill:  But, you know, there’s, as we both seen, there’s been a lot of research showing the customers want to align their values with those of the brands they shop with.

Bill:  We know it’s important.

Bill:  And you’ve seen as much of the research as I have.

Bill:  So, I mean, I don’t know if you remember any of it, but there’s some really good pointed results.

Aaron:  Yeah, no, I’ve read a report not too recently.

Aaron:  And I guess the watermark that I would put into play is, it’s about 60 percent no matter which type of thing that you seemingly are cutting it on.

Aaron:  So, some of the facts that were in the report that I talked about a little bit, that I read not too recently, trip it in my mouth today, apologies for ever.

Aaron:  It was around three out of five people are prepared to make personal sacrifices to save the planet and take a stand on a political issue that are important to them.

Aaron:  Another three out of five respondents are being the change they want to see in the world, so to speak.

Aaron:  And then another three out of five are starting to change their behaviour to adopt to the environmental pressures that we’re facing.

Aaron:  So it’s all in this 60 percent mark for a lot of things that are happening.

Aaron:  And it’s obvious to us that this is an important topic to consumers.

Aaron:  But then at the same time, we’ve also heard that 72 percent of consumers are tired of brands that are pretending that they want to help society when they just can’t or when they’re just doing to make money, quite frankly.

Aaron:  Even higher, about a little close shy of 80 percent think that companies or brands should be transparent about their commitment and promises.

Aaron:  So brands really do need to consider what worthy causes make sense for them to support.

Aaron:  They need to know that that effort must originate organically.

Aaron:  And it has to make sense for the brand.

Aaron:  There has to be this idea of authenticity behind it because consumers are savvy.

Aaron:  They’ll figure it out very quickly and they’ll quickly identify if a greenwashing is happening and taking place.

Aaron:  And they’ll start to punish those brands who seem insincere for their sustainability efforts.

Aaron:  I’ll give you a few quick examples and then I’d love to hear from you, Bill.

Aaron:  But if you look at brands like, say, Toms or Warby Parker or Ben and Jerry’s Starbucks, you also mentioned earlier, you’ll see very different approaches in all of these strategies around sustainability.

Aaron:  Toms and Warby Parker, they’re among the brands who came into the market with charitable causes having been in their DNA, so to speak, so really is a part of their original value proposition and their brand positioning, as well as their promise in terms of loyalty to their consumers.

Aaron:  Ben and Jerry’s is another one that I mentioned, and they’ve led by example on some topics that have been actively supporting political causes, long standing, they’ve been focused on that.

Aaron:  That can certainly attract a lot of consumers if they’re on side with those positionings, if you will.

Aaron:  But it can then also potentially alienate customers.

Aaron:  And so, that’s one of those bittersweet elements that could be good or could be bad.

Aaron:  And so, it just depends on which side of the coin you land on.

Aaron:  Starbucks, again, very consistent in supporting veterans of the armed forces.

Aaron:  I always like to see this.

Aaron:  This is one that’s personally close to me.

Aaron:  But since 2013, Starbucks has hired more than 40,000 vets and military spouses and continue to provide support for non-profits serving the military community, including things like the Elizabeth Dole Foundation and the Wounded Warrior Project.

Aaron:  You know, this Veterans Day just happened not too long ago, obviously, in the US.

Aaron:  It was remembered to stay up in Canada and land other areas in the world on November 11th, 2024.

Aaron:  And Starbucks on that day, very recently, was showing full support for the veteran community.

Aaron:  They were offering a free, tall, brewed coffee or hotter ice, didn’t matter which it was, whatever the veteran’s preference was.

Aaron:  And to veterans, military service members, military spouses, all of the US.

Aaron:  Starbucks stores across the nation.

Aaron:  So that’s pretty impressive when you think about it.

Aaron:  So Starbucks was donating, I think the number we saw, Bill, was around $200,000 worth was shared evenly with the Elizabeth Dole Foundation and the Wounded Warrior Project.

Aaron:  And that was the one that speaks closely to me.

Aaron:  So I honed in on it.

Aaron:  What are some examples that you might have?

Bill:  There’s so many out there.

Bill:  And in a lot of ways, I think the star of the show for me has to be Patagonia.

Bill:  Not trying to pick one brand over another.

Bill:  It’s not a popularity contest.

Bill:  But we saw that in September 22, this is remarkable, Patagonia made this big announcement where they said they didn’t go quote public.

Bill:  They went purpose.

Bill:  Right.

Bill:  And there’s Yvonne Chouinard is the founder, and he’s written some really interesting books.

Bill:  Let My People Surf.

Bill:  And that’s a worthwhile read if you’ve seen any of that.

Bill:  But the family gave ownership of the Patagonia business to something they called the Patagonia Purpose Trust and Home Fast Collective.

Bill:  And they’ve been working on this for over 10 years.

Bill:  And they decided if we want to be true to the things we believe in, we want to put all the assets, all the future revenue producing capabilities, everything to do with this business that matters in one of these trusts.

Bill:  And they said, you know what?

Bill:  Our new purpose statement is that we’re in business to save the planet.

Bill:  You know, like when you hear people talk about stakeholder capitalism and then you say, give me some examples, best example ever.

Bill:  I mean, the founder at the same time even said that the earth is our only shareholder.

Bill:  Think about that.

Bill:  That’s a big statement.

Bill:  You would put it out there.

Bill:  And so Patagonia, I think, is maybe they were already supporting climate and earth causes.

Bill:  But then to do that meant that they were ensuring they were actually putting the future of their company in trust with purpose in mind, which is absolutely amazing.

Bill:  So if you were already aligned with Patagonia for some of the things they supported, this would reinforce that this will always be preserved.

Bill:  It’s like putting it in a national trust for perpetuity.

Bill:  So it’s important, I think, because we’ve seen other research and we’ve got this in the course of some other places about an Accenture report that was really in-depth.

Bill:  And they talked about over 60 percent of global consumers prefer to purchase from companies that stand for a purpose and it reflects their own values and beliefs.

Bill:  So I mean, it’s there again.

Bill:  Yeah, I mean, you’ve got stats, I’ve got stats, but they’re all pointing to the same thing.

Bill:  And the other thing that’s interesting is we have the psychology of loyalty.

Bill:  We spend a lot of time talking about why people buy and in trying to understand people, the consumer as a human will.

Bill:  We found that there’s this basic human need of autonomy being able to be self-directed in your life.

Bill:  It’s one of the three central concepts of the self-determination theory, which is this leading concept of behavioral psychology.

Bill:  You know, all of that explains people, how they’re motivated as human beings, what brands can expect, you know, in the way that they react to certain things and, you know, why they do what they do.

Bill:  And so, you know, what Patagonia did speaks to that, that autonomous needs.

Bill:  So the people that want to be self-directed in their life, say I choose to be with Patagonia.

Bill:  I will follow them.

Bill:  I will patronize them.

Bill:  And guess what?

Bill:  That can result in life long.

Bill:  You talk about customer lifetime value and you talk about price optimization, things like that, that serves multiple needs for Patagonia, while the customer is absolutely delighted.

Aaron:  Yeah, I think it’s a tie back to, again, as we talked about, the authenticity of really having a loyalty promise that aligns to a brand promise and being very consistent across that.

Aaron:  And so, you know, it really does seem that when we’re thinking and talking about sustainable loyalty, we’re referring to those two main topic points of, you know, number one, maintaining the financial consistency of your operation and having it being tied genuinely to that in a fair way.

Aaron:  But two, it is incorporating those cause related marketing into your loyalty program and not just leaving it at the brand level.

Aaron:  So both feed into obviously third purpose, which is that sustainable loyalty and which I asked you out at the beginning of the show, you know, a euphemism for long term success.

Aaron:  You’ll see this is a very important concept and much more important than just a euphemism.

Aaron:  It goes beyond that.

Aaron:  So why don’t you bring us home, Bill?

Bill:  Yeah, it absolutely does.

Bill:  It’s a good place to wrap it.

Bill:  So as always, I hope everyone’s enjoyed the conversation and talking about sustainable loyalty.

Bill:  It’s a concept that’s pretty important to everyone in this business right now.

Bill:  And please follow World Loyalty Giving Day for the entire industry globally.

Bill:  If you can, you’ll learn more about this whole movement.

Bill:  And as always, for anyone interested in joining the community of loyalty marketing professionals that have earned their CLMP designation, go to loyaltyacademy.org and you can see what the curriculum is all about.

Bill:  You can learn online in different ways.

Bill:  You could join the 1000 plus CLMPs globally that are represented from over 54 countries in the world.

Bill:  And if you want to dig into previous podcasts here, you can access them through thewisemarketer.com, through letstalkloyalty.com.

Bill:  And with that, we will see you back here next week.

Bill:  Thank you for joining us and we’ll see you next time.

Bill:  Thanks, Aaron.

Aaron:  Thanks, Bill.

Aaron:  Stay loyal, everyone.

Paula:  This show is sponsored by Wise Marketer Group, publisher of The Wise Marketer, the premier digital customer loyalty marketing resource for industry relevant news, insights and research.

Paula:  Wise Marketer Group also offers loyalty education and training globally through its Loyalty Academy, which has certified nearly 900 marketeers and executives in 49 countries as certified Loyalty Marketing Professionals.

Paula:  For global coverage of customer engagement and Loyalty, check out thewisemarketeer.com and become a Wiser Marketer or Subscriber.

Paula:  Learn more about Global Loyalty Education for Individuals or Corporate Training Programs at loyaltyacademy.org.

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