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, and The Loyalty Academy program 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: Hello everyone, I’m Aaron Dauphinee.
Aaron: Welcome back to The Wiser Loyalty podcast series, which is a production of Let’s Talk Loyalty and The Wise Marketer Group.
Aaron: In this series, we take our executive faculty members from The Loyalty Academy, myself and Bill Hanifin, our CEO.
Aaron: And we dig deep into topics based on our course curriculum for The Loyalty Academy’s Certified Loyalty Marketing Professional Program.
Aaron: So it’s good to be back here with you, Bill.
Aaron: Welcome.
Aaron: How’s your week been?
Bill: It’s been fantastic.
Bill: We had American Thanksgiving.
Bill: We’re in the middle of the giving season, getting started, holiday season.
Bill: So here we are.
Bill: Perfect.
Aaron: That’s a nice segue into today’s topic, because in this month’s topic for December, we’ve been focusing on Loyalty Academy course number 212, which is the Introduction to Sustainability in Loyalty.
Aaron: And in our last part of this two-part discussion, we defined what sustainable loyalty was and then packed three principal elements of how brands really need to define this in regards to customer loyalty marketing.
Aaron: So if you’ve missed that, what we did is we explained why creating sustainable loyalty can be one of three things essentially.
Aaron: So the first is maintaining the financial consistency of your operation.
Aaron: It can be number 2, incorporating cause-related marketing into your loyalty program.
Aaron: And then of course, it can be as a third to bring it home.
Aaron: It’s simply a euphemism for long-term success in some regard.
Aaron: So really breaking it across those three components.
Aaron: But today, we’re going to shift and talk about how brands that have evolved in their approach to charitable giving and cause-related marketing, have done so and give you a few hints about what the future may hold.
Aaron: So Bill, maybe I’ll kick off first with a little bit of a story.
Aaron: So I remember when giving felt rather forced in the workplace way back early in my career, and this is not a bad thing.
Aaron: I think it’s just been a commentary on the evolution of how far we’ve come.
Aaron: But you’d get these kind of annual announcements of annual giving campaigns, particularly if it was, the United Way comes to mind on that at this time of year.
Aaron: But throughout the entire year, one of the organizations that I was at in my early careers, Airmiles and Lultee One here in Canada, they were really good at focusing on charitable giving and giving back to the community.
Aaron: It was strong within the leadership.
Aaron: But I think that’s the key is it was defined by the leadership.
Aaron: So I know I got involved a lot with a motion ball, which was an offshoot of Special Olympics Canada here.
Aaron: That was one of the key charities that they focused and contributed a lot of time and resource as well as dollars that came from the organization, which was really successful in educating and letting people know about the capabilities of individuals in the Special Olympics movement.
Aaron: And then the other one was Sick Kids Canada that we also contribute a lot to.
Aaron: And then later down the road as I was starting to part ways with that organization, Brian Pearson, the CEO, very, very strong advocate for green initiatives and sustainability.
Aaron: Bringing that in and really creating a strong positive culture and air miles around those topics.
Aaron: But by and large, those were dictated from the top down as opposed to me as an individual in the organization thinking about the things that mattered to me most.
Aaron: If I wanted to get involved from the organization involved, it was by and large dictated in terms of those three buckets or funnels versus me leaving the organization.
Aaron: I actually went out west to Vancouver and joined an organization that was taking the Coalition Rewards Construct and starting to apply that in the US market.
Aaron: But the difference was that we were redeeming for points all through to our actual hard cash donations to charities of choice.
Aaron: We had registered the entire US database where an individual who would join the coalition would earn the rewards and then could redeem for any local charity through to national charity that they wanted.
Aaron: So that idea was back in 2007.
Aaron: We got snubbed out.
Aaron: We did not make it at the one card later to be called Affinity One.
Aaron: But here we are, fast forward some almost 20 years, just shy of it.
Aaron: It’s certainly over 15.
Aaron: We’re seeing a lot of this choice base coming into the decision-making for programs that are out there.
Aaron: So the consumers are really leading the charge in terms of how they’re giving back and using Loyalty to do that.
Aaron: But maybe I’ll turn it over to you.
Aaron: I’ve probably rambled on enough to open this up for you.
Aaron: What are your thoughts on this?
Bill: Well, my experience in the workplace is very much parallel to yours, so I’m going to turn it a little bit and give you an answer based in the context of Loyalty programs.
Bill: Perfect.
Bill: It’s almost the same sort of thing.
Bill: You were told to donate to the United Way.
Bill: Well, I remember the first strategy session, I think, where somebody first brought up this really great idea of having a charitable option within the reward mix.
Bill: I think probably the whole idea was to add options, because people at that time, believe it or not, we’re still focused on travel, gift card and merch.
Bill: And so we’ve got to do more or something different.
Bill: So people said, charitable option would be great.
Bill: It would give you a chance to express what your brand is all about, get people more involved.
Bill: And nobody said it back then, or there wasn’t even the hint of what we talk about today is emotional loyalty and trying to add an element of programs that went beyond the transactional.
Bill: But I think that’s really where the origins were.
Bill: The companies were looking for something innovative to create a halo effect over the loyalty program.
Bill: So charitable option it was.
Bill: The problem with it was, Aaron, I think that usually when those strategies are put into place in the early days that I saw is, once again, we’re going to pick the charity for you and you can donate your points to that charity.
Bill: Or maybe if we’re, oh, super innovative, was we had three options, so now you had three choices.
Bill: So, you know, the kind of that dirty secret that eventually came out as we looked at the redemption patterns was that less than 5% of any of these programs were seeing redemption for charitable option.
Bill: It was kind of sad, you know, we’re wondering, like, how do we get more engagement?
Bill: So, I mean, the lesson that we got out of it at the time was that the charitable giving idea was a great idea, but it just seemed like there was some element of the execution that we were doing then that it was, it was much more brand-centric than it was customer-centric, right?
Aaron: That’s a great way to describe it.
Aaron: I think there’s no doubt about that.
Aaron: I mean, you talked about less than 5% of the redemptions in charitable choice.
Aaron: We were in the throes of doing a new research element, and I just want to talk about purpose because we’ve used that term, which is related to this topic.
Aaron: It was in and around the reasons why someone would join a loyalty program was less than 5%.
Aaron: It was in and around 4% as well too.
Aaron: So as a time capsule of then versus now, those things haven’t really changed.
Aaron: I know we’re using different terminology in this regard, but the idea or the construct of giving back, whether you call it as alignment to values and purpose or through to actually the redemptions and giving of points to give back to a community, if you bucket all that up, it’s really been stagnant.
Aaron: It hasn’t really evolved.
Aaron: And so if that first wave of innovation, a fortuitable loyalty was really, if you can call it that even, was brought on by companies that more or less sought to tap into charity aggregators to give program membership mass choice, right?
Aaron: Like that movement to choice and did it on mass.
Aaron: And I’m thinking off the top of my head of Kula Choices, right?
Aaron: K-U-L-A, for those who are not familiar with that.
Aaron: And there were several others that were built on that aggregator charity model, but the idea was essentially to attract members to the charity option by giving them that choice.
Aaron: And so by and large, then you could even make a micro donation to buy supplies for your child’s classroom.
Aaron: And that was kind of evolves to what I was talking about when I went out west, that we started to see that.
Aaron: But what else is happening?
Bill: Well, that’s what I’m wondering.
Bill: So those things didn’t really take off there, did they?
Bill: I mean, I was involved in a couple of them.
Bill: They didn’t change the business and it really didn’t happen.
Aaron: No, you’re absolutely right.
Aaron: Like the mechanism worked in the model was solid, but there were still companies like GuideStar and Charity Navigator who would aggregate charity organizations and provide a very comprehensive database of non-profit organizations to offer detailed insights into a charity’s financial health and operations, but essentially acting as the biggest source of information on non-profit organizations globally.
Aaron: But all the loyalty provider had to do was to sell into the brand.
Aaron: So they weren’t the one and the same, they couldn’t really compete with that, if you will.
Aaron: I think that was the problem.
Aaron: In my memory, most brands supported the idea, more or less up until the time that they then had to realize that activating their membership would mean they’re writing lots of checks and paying out cash to third parties.
Aaron: So it could hurt them in the pocket.
Aaron: While the idea was of benevolence and giving, when push came to shove and cash was coming out on that long tail, starting to do those in-kind redemptions, it started to cost them.
Aaron: So then there was less activation against this.
Aaron: Not to mention the whole idea of essentially possibly activating, as I said, that long tail could really turn on a spigot of marketing expenses, not just the redemption side, but also marketing expenses to be able to do that.
Aaron: So it’s no wonder, quite frankly, that they failed or weren’t as successful.
Aaron: Let’s not say failed, let’s be the more successful as they could be, maybe a bit ahead of their time, perhaps.
Bill: Yeah, so I wonder if they failed in that sense for the reasons you’re talking about, or maybe the market just wasn’t ready.
Bill: Was it too early?
Bill: Because the longer we get away from COVID and the pandemic, the more I think about how resoundly it changed our entire world and how we look at things.
Bill: And we’ve seen research after research that has shown that people care more about how they spend their money, with what brands they spend their money.
Bill: They want their personal values to align more with the brand.
Bill: So we’ve seen that.
Bill: We’ve also done so much work in the psychology of loyalty area.
Bill: We’re in that self-determination theory that we mention often.
Bill: There’s an element of self-direction that people want to be able to say, I choose how to spend my money and I’m going to spend it with somebody that kind of aligns with me.
Bill: So we’ve told the Patagonian story and all that.
Bill: And I mean, the DEI movement, call it, really came out strong.
Bill: This was a priority for corporate America, if not corporate globally.
Aaron: I think corporate globally, yeah, for sure.
Bill: It was partially before the pandemic happening, but it really, by the time the pandemic was retired and gone away, this was really important.
Bill: And so I think it became much more an issue of, even though companies we know don’t like to write those checks, since they don’t have to, that they had to care.
Bill: They, in capital letters, they must care a bit more than they did in the past.
Bill: And so that means that they, you know, maybe a little bit of the choice was taken away from them and it was given to the consumer.
Bill: And I think, hey, that’s a shift that we can all acknowledge.
Bill: Haven’t we been writing a lot about the consumers in control, right?
Bill: And so if you look at like brands saying they want to be customer centric, consumers saying, you know, I do have the control, guess what?
Bill: You want my data, you want my money.
Bill: So it’s maybe a little bit of a sad commentary that all this was forced on the corporate brands out there.
Bill: But at the same time, you know what, sometimes these kind of like tectonic shifts end up in a good place for everybody.
Aaron: So if that’s where we’re at, like, you know, we pointed out some of the flaws and things that haven’t quite gone perfectly.
Aaron: So what, in your opinion, is the optimal approach today, Bill?
Bill: Optimal approach sitting here today on Giving Tuesday, right?
Bill: At the end of this big kickoff weekend of the shopping season, it’s different than I might have thought of it in the past.
Bill: And today is also World Loyalty Giving Day.
Bill: So for the first time ever, we created an opportunity for brands and consumers and the entire industry to come together around the idea of discovering another wallet of value.
Bill: So the consumers on Giving Tuesday are encouraged to donate cash or some other kind of currency.
Bill: And so now World Loyalty Giving Day gives people the opportunity to give away some of their points, miles, stars, et cetera.
Bill: So it’s a great day in that regard.
Bill: And I think it’s maybe bringing more of a social consciousness into this whole picture.
Bill: So choice has got to be key.
Bill: So we’re always, I think we’ve proven in our discussion so far that choice is probably the central aspect.
Bill: If you want people to participate, you must give them choice.
Bill: But I think also there’s got to be this absolute authenticity that brands participate because they want to, that they support a cause that they really, truly believe in, or maybe it’s in the fabric of their brand promises from the very beginning.
Bill: Like we’ve talked about brands like Tom and Ben and Jerry’s or Tom Shoes, things like that, Patagonia.
Bill: Brands that are just absolutely authentic.
Bill: You cannot question.
Bill: There’s no, you can’t accuse any of those of greenwashing, right?
Bill: So I think when there’s choice given to the consumer and when there is a real brand authenticity at play, then there’s an opportunity for brands to communicate to customers about what they really, truly find meaningful.
Bill: And guess what?
Bill: You know what?
Bill: It’s a solid antidote for this wave of critique that we’re hearing about things, these habits like the mileage run and travel loyalty, things like that.
Bill: Right.
Aaron: Oh my gosh.
Aaron: Yeah, you’re smiling at me here because you know, that’s something that I think about doing on an annual basis and I agree.
Bill: Go ahead and it’s the world that you’re a mileage runner.
Aaron: Yeah.
Aaron: No, the words I would, I think well before this particular episode or this podcast, but to your point, that’s something that needs to be addressed because it’s not authentic in that regard, because you’ve got people trying to get to the next tier to get to the super elite value for Canada here in Canada, and they’re literally getting on planes just for the sake of getting the last couple of segments or getting those miles.
Aaron: While that’s good for the organization and the consumer because it sets them for the stage of how they want to be treated in the following year, it really isn’t aligned with carbon offset printing or carbon footprint credits that you can get with the organization.
Aaron: How guilty do people really feel?
Aaron: I’d love to know the stats on how many people are doing these mild runs at the end of the year that actually select the carbon footprint offset, or if they just let it go by, I don’t know.
Aaron: That’s just one of those puzzling metrics that would be in my mind.
Aaron: But frequent travelers, they do a lot of damage.
Aaron: That’s one of the areas where we add to this system on that front.
Aaron: Certainly, airlines and hotels take steps.
Aaron: Like I said, with the carbon offsets that they have, it certainly isn’t just enough.
Aaron: I think it’s still something that needs to be addressed, particularly in light of how regulators and governmental officials are starting to look at frequent flyer programs and other loyalty programs now, right?
Bill: They are.
Bill: Absolutely.
Bill: The Department of Justice opened an investigation, as you know, in the US, looking into frequent flyer programs so that they’re getting much more attention.
Bill: But it even goes beyond that, I think.
Bill: How about concerns about packaging, waste and packaging and shipping, the return policies that impact some of that?
Bill: We’ve had discussion about whether plastic membership cards and welcome kits and all these kind of traditional direct mail initiatives are appropriate in loyalty programs anymore.
Bill: We know they have impact in some ways, but I think the brands have to start thinking about the overtones that come along with that.
Bill: It’s inviting a much broader conversation about everything that you do and how it impacts the world.
Aaron: Yeah, I love that.
Aaron: What a great way to set tie up in terms of today’s conversation because you’re absolutely right.
Aaron: I think it’s wise of all of us or it’s beholden on all of us who are in this industry and particularly operators of programs to really take stock of your program in a holistic way and through the lens of sustainability for the planet and in support of good causes.
Aaron: We’re not being naive in saying, hey, that’s the major reason why you do it because we know you still have to make money at the end of the day because that’s what we’re in the business of doing.
Aaron: But if you look at the processes as an opportunity to improve and to make stronger connections with your customers and it’s authentic like you were describing, then it can yield really great benefits.
Aaron: I think that’s probably the big takeaway is to take a hard look and do something about in the way that you can for the customer mindset.
Aaron: Perfect.
Bill: That’s a good place to wrap it.
Bill: Like most of these topics, Aaron, that you and I embraced there, we could go on for quite a while, but staying true to the format, that’s a good place to wrap.
Bill: For anyone interested in joining our community of loyalty marketing professionals, you can learn more at the loyaltyacademy.org and determine how you can earn your designation of a certified loyalty marketing professional.
Bill: That’ll lead you to join a community that’s now well over 1,000 people globally in more than 54 countries around the world.
Bill: And if you want to dig in to previous podcasts, look more into the sustainability topic for this month, or all the topics that we’ve covered throughout the year, you can find them at letstalkloyalty.com.
Bill: And also, of course, at thewisemarketer.com.
Bill: So with that, we wish you all a great week.
Bill: Happy holidays coming up for a lot of people in the world.
Bill: Don’t over shop.
Bill: Don’t over consume.
Aaron: Sounds great, Bill.
Bill: Be well.
Aaron: We’ll talk with you soon.
Aaron: As always, everyone, stay loyal.
Bill: Thank you.
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 thewisemarketer.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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