Integrating sustainability into your loyalty program is a powerful move in today’s eco-conscious market. Loyalty programs drive customer retention and engagement, while sustainability initiatives address environmental concerns and resonate with conscious consumers.
In this guide, we’ll provide expert insights on how to effectively merge these two powerful tools, promoting both brand growth and environmental responsibility. We’ll walk you through everything you need to know to launch a green loyalty program within a week.
What Is A Green Customer Loyalty Program?
A green loyalty program, or green rewards program, fosters customer loyalty by incentivizing sustainable choices, aligning brand values with environmental responsibility, and offering rewards for those green choices. Customer rewards can include things like points-based discounts, percentage-based discounts, store credit, or free gifts.
Nearly 70% of consumers are already motivated to be loyal to a brand if the brand shares the same values, so a green loyalty program can be just the nudge to be loyal to your brand. Consumers also just want to shop from sustainable brands. More than two-thirds of Americans consider sustainability when making a purchase.
By incorporating environmentally friendly practices into their business model, companies not only reduce their ecological footprint but also resonate with a growing segment of eco-conscious consumers, enhancing brand reputation and fostering long-term customer loyalty. Green loyalty programs give businesses the structure and technology to do this.
Benefits Of Sustainability In Loyalty Programs
Green loyalty programs reward sustainable behaviors, so the environmental benefits of a green rewards program are easy to imagine. Think: carbon neutral shipping, carbon offsetting, and recycling programs.
But green loyalty programs also benefit businesses by increasing customer engagement, retention, and revenue.
Let’s look at the numbers:
- Boosted Customer Retention: 83% of consumers say that a loyalty program influences their decision to buy from the brand again. Brands emphasizing sustainability see 4% higher annual repeat rates compared to brands with fewer sustainability claims, hinting that strong sustainability engagement might boost brand loyalty more than a loyalty program by itself.
- Enhanced Brand Image: 80% of consumers favor sustainable brands and 62% of consumers want you to take a stand on green values. Highlighting your green initiatives through your loyalty program can have a positive impact on reputation.
- Higher Profit Margins: 60% of customers are willing to pay more for green products and loyalty programs boost revenue by 15-25% annually from customers who use the program. Combining sustainability with loyalty marketing can lower your cost-per-acquisition (CPA) and increase your AOV, increasing your profit margins.
- Positive Environmental Impact: Beyond business benefits, these programs contribute tangibly to global sustainability efforts, reducing carbon footprints and promoting eco-friendly consumer behaviors.
Sixty percent of Americans think that climate change is a major concern and the majority of consumers want to shop with brands that are making environmentally responsible business choices. Green loyalty programs provide a nicely automated and measured way to align brand values with consumer demand.
Here’s how to create one for your business.
How To Build A Green Loyalty Program
Here’s how to integrate your sustainability initiatives with your loyalty program as an ecommerce business.
Step 1: Choose loyalty program software
Loyalty program software automates the entire process of building your loyalty program. Ideally, you’ll choose software that allows you to do the following:
- Customize which actions you can reward (i.e. carbon neutral checkout)
- Define what your reward is (i.e. 20% off)
- Select what the conditions are for distributing the reward (i.e. apply at checkout)
- Integrate with your existing marketing tech stack (i.e. post-purchase email notifications about loyalty points earned)
The following two brands integrate with EcoCart, making them the ideal choice when integrating sustainable actions in a loyalty program:
- Loyalty Lion (integration coming soon)
Since EcoCart can integrate seamlessly into LoyaltyLion and Yotpo, it allows you to incentivize eco-conscious behavior among your customers through multiple touchpoints.
Step 2: Choose sustainable actions you want to reward
While it would be nice to choose whatever sustainable actions you’d like, it really comes down to these two factors:
- Is your chosen loyalty program software capable of this?
- Will rewarding this action significantly increase your cost-per-acquisition (CPA)? (If yes, then re-evaluate.)
We’ll go through the three ways you can seamlessly integrate sustainability into your loyalty program, now.
1. Carbon Neutral or Climate Positive order for more loyalty points
Carbon neutral shipping apps, like EcoCart, allow customers to offset the carbon emissions produced by their order.
Face the Future (FTF) uses the Loyalty Lion-EcoCart integration to reward customers for offsetting their orders with 100 loyalty points.
These loyalty points can be used for a variety of products, all based on how many points you have:
Through its rewards program, the brand can encourage customers to both make sustainable choices and try key products that are important to the business.
So how well did it work for Face the Future?
This resulted in a:
- 130% higher AOV for loyalty members than non-loyalty members,
- 200% increase in the number of purchases per customer,
- 3X more spend than non loyalty members.
Such a simple action, made easy through the Loyalty Lion and EcoCart integration, and FTF was able to significantly increase its revenue generated from loyalty members.
See the full Face the Future Case Study.
2. Use loyalty points to “pay for” Carbon Neutral or Climate Positive order
Since customers technically need to spend money on carbon offsetting in order to earn points, you could instead allow customers to use points to “pay” for carbon neutral shipping during checkout.
This both fosters customer relationships by making environmentally friendly choices more accessible to your customers and supports your sustainability goals.
3. Earn points or discounts for recycling products
Rewarding customers for recycling used products, called branded circularity, is another powerful way to make a sustainable impact through your loyalty program.
For example, Lush’s beauty recycling program rewards customers with $1 off their next purchase when they return either one Lush pot over 45 g or 1.5 oz. If they return five, then they receive a free face mask.
Madewell‘s denim recycling program rewards customers with $20 off a pair of jeans when they bring in an old pair of jeans in exchange.
So how do ecommerce companies offer something similar? Companies like thredUP are offering services through Resale-As-A-Service to online retailers that want to integrate resale into their ecommerce sites. This allows customers to shop secondhand products from the brand right from the ecommerce site, while thredUP manages processing and fulfillment.
These are just a few examples of tried-and-true green rewards programs, but you could potentially reward any consumer action that helps combat climate change.
Step 3: Choose your customer rewards
Once you’ve chosen the actions you want to reward, you’ll need to actually reward your customers. This most often comes in the form of:
- Points for purchases
- Discount coupons
- Free shipping offers
- Exclusive member sales
- Birthday specials
- Referral bonuses
- Free product samples
Your loyalty program software will likely have a few customer rewards ready out of the box, such as points-based rewards and discount-based rewards.
If you need help setting your discounts, this is a pretty helpful guide to discount strategies by Shopify. You can apply similar principles to your rewards. Try this profit margin calculator to make sure you’re not making these offers a little too enticing.
Finally, follow these sustainable marketing practices to let your customers know that you’ve launched a green loyalty program.
Create A Green Loyalty Program For Your Business
With a green loyalty program, you can reward loyal customers not only for their purchases but also for their efforts in reducing their environmental footprint. Your customers benefit from valuable rewards while actively participating in your sustainability journey, reinforcing your brand’s commitment to a greener future.
Effectively strategizing by using loyalty programs and sustainability initiatives in tandem can elevate your brand’s reputation for sustainable practices and resonate with environmentally conscious consumers during the peak season and beyond.
Book a demo with EcoCart and discover how you can make a tangible difference in the ecommerce landscape.