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Make It Easy for People to Make a Difference

May 24, 2017

Consumers appreciate the chance to marry commerce with charity, especially when brands make it seamless. Loyalty program members can turn their points into donations to nonprofits that have great meaning to them.

By Alan Goldstein, CEO Kula

Sometimes companies and consumers alike have the opportunity to do well while also doing good. Meaningful cause marketing can provide just such an opportunity.

One area that's ripe for this marriage of great business sense with important charitable impact is the consumer loyalty program. In fact, such programs could use the injection of new energy that a charitable-giving option could instill, as lackluster redemption is consistently a problem. The 2015 COLLOQUY Loyalty Census found that one-third of loyalty rewards go unredeemed every year, with 20% of program members having never made a redemption. This is bad news for program operators, as non-redeemers are more than twice as likely to leave a program as those who use their points or miles.

One thing consumers say they appreciate, however, is brands that support good causes. Indeed, a recent survey of 1,000 consumers by marketing research firm Toluna found that 46% of people think brand support of charitable causes is “a great way to bring attention to different national or global issues.” Savvy and social-minded companies would be wise to heed that; one that created a new charitable outreach is ride-sharing service Lyft, which recently debuted a “Round Up & Donate” feature that lets riders round up their fee to the nearest dollar for a nonprofit donation.

Giving members a chance to donate their points to the charity of their choice is a great engagement tool that allows both the brand and the consumer to feel good about making a difference. But the key is “charity of their choice.” Some programs do offer a charitable-giving option, but the list of nonprofits to which people can give their rewards is typically very limited.

Consumers are much more likely to choose this option if they can turn their loyalty points into donations for a nonprofit that means something to them – their alma mater, a grassroots group in their neighborhood, a medical charity that addresses a disease that has affected a family member, the church they’ve attended since childhood, their child’s school, and so on. But too few loyalty programs even offer the option to donate points, and even fewer give members the chance to make a difference with a nonprofit that has a personal connection for them.

Kula works with popular brand loyalty programs to allow members to choose from hundreds or even thousands of charities. Program members choose a school or nonprofit and make a designation – either of all their accrued points, a portion or a provided option to give “leftover” points when they use another portion for redemption. “Giving Codes” offer brands another way to leverage the power of giving to the consumer’s cause of choice. They’re added to redemption catalogs, as well as awarded to consumers for actions such as taking a test drive, sampling a product or filling out a survey. Program operators can engage with Kula in three ways: on the earn side, shaping how members accrue rewards; through a promotional campaign for a specified time period; or by fully integrating Kula’s efforts into their loyalty program.

Major brands recognize the wisdom of cause marketing, both inside their loyalty programs and beyond. Among those creatively marrying charity and commerce are Red Robin, with its Burgers for Better Schools initiative; My Coke Rewards; Kellogg’s Family Rewards; and Amazon Smile. Hilton Hotels & Resorts’ Honors program lets members donate points to a variety of charitable partners, while most airlines allow people to gift their frequent-flyer miles to charities, which use them to fly program recipients to destinations (such as getting children and families to Make-A-Wish Foundation locations and delivering doctors and scientists to global areas in need).

Adding a charitable-giving option can benefit a loyalty program in a variety of ways, including encouraging redemption; building better engagement with consumers; raising the brand’s social profile; and connecting with social-minded members, particularly millennials. A smartly designed charitable-giving option also tends to increase spending by consumers, so it can be seen in-house as a sales function and not “merely” a donation/charity program.

Brands are likely to benefit, too, from a halo effect, with consumers and observers experiencing an overall more positive view of the brand thanks to the charitable-giving efforts. In fact, by offering a highly personalized giving option, brands can demonstrate their loyalty and connection with consumers. Allowing them to donate their points to the cause of their choice communicates that the brand cares about the things that matter to the consumer – which is a great way to stand out from the same-old, same-old pack.

With the right program in place, it can be easy for both companies and consumers to make a difference in their community and beyond. The trick is to provide lots of choices, so that every member of a loyalty program can turn points into donations for a nonprofit that matters to them.

 

Alan Goldstein is CEO of Kula. He can be reached at (404) 946-1783 or alan@kula.com.