The Purpose Perception and how it fits with your Loyalty Strategy

By Gregg O'Neill in Blog, General
January 19, 2023 22:00

New Research Shows the Value in Enhancing Loyalty Donation Programs 

Loyalty reward programs are a popular way for brands to incentivize customer loyalty and repeat business. These programs offer a variety of rewards such as discounts, free products, or exclusive access to events and promotions to loyalty customers who accumulate different levels of loyalty points. New research demonstrates that in addition to these personal loyalty rewards, a significant number of loyalty members desire to donate loyalty currency to causes they care about most. 

Loyalty currency donation is not a new concept. The concept has been around for decades. However, our research shows that in most programs, “Donate Your Loyalty Currency” is an afterthought at best. It is buried deep in a mobile app, website, or catalog, has limited charities, and obscures the actual value donated.

Modernize your “Donate Loyalty Currency” component of your Loyalty Program

There is a great opportunity to better connect with your Millennial and Gen Z loyalty members by modernizing your Loyalty Currency Donation component of your Loyalty Program. Various studies show that over 60% of Millennials and Gen Z's prefer to donate their rewards to meaningful causes and 30% already use a third party platform to make donations. Purpose driven brands look to capitalize on this powerful consumer sentiment and unlock the emotional power of consumer giving while deepening customer loyalty.

For customers, loyalty reward donations are a simple and convenient way to make a difference. Many people want to give back and support local charities, but may not have the resources or time to do so. By enabling customers to donate their loyalty currency, brands make it easy for their customers to make a positive impact in their local communities.  

For brands, offering the option to donate loyalty rewards is a great way to showcase their corporate social responsibility impact and how they give back to the communities they serve. It can also improve customer satisfaction and engagement, as customers feel more invested in your brand and its values if they have an opportunity to support a cause they care about with their loyalty rewards.

In a recent Purpose/Perception Survey, Porter-Novelli, a leading Consumer Research firm, reports that consumers are more likely to support a brand, buy products, pay more, and shop more frequently with brands that are present in their communities and that give to charities locally. 

Specifically, Porter Novelli Research shows that when brands lead with purpose, customers are: 

  • 76% More likely to trust that brand
  • 72% More likely to be loyal to that brand
  • 72% more likely to forgive that brand if it makes a misstep

3 Ways to implement a “Donate Your Loyalty Currency” Program

Three common approaches to “Donate Your Loyalty Currency” include:

  1. Partner with a specific non-profit organization and allow customers to donate their rewards directly to that organization.
  2. Offer a curated and vetted range of local charitable causes to donate points, enabling customers to select the cause that resonates most with them and is aligned to your brands values and giving priorities.  Research shows that 67% of consumers prefer to support a local nonprofit and give up to three times more when donating to a local charity
  3. Enable loyalty members to redeem loyalty rewards for charitable donations in the form of gift cards or vouchers. This approach allows customers to use their rewards to donate and give them the flexibility to choose how, when, and where to donate.

Make Your “Donate Your Loyalty Currency” Program Clear and Simple

No matter how your brand chooses to implement a “Donate Your Loyalty Currency” program, the key is to make it easy and convenient for customers to participate. Provide clear information about the donation process and the charities or causes available to support. And offer a variety of donation options and allow customers to track their donations and see the impact they make.

  • Porter-Novelli shows the relevance of “Purpose Perception” in consumer preferences when making purchase decisions. Consumers are:
  • 78% are more likely to remember a brand with a strong purpose
  • 71% purchase from a purpose-driven brand over an alternative, when cost and quality are equal 
  • 66% consider a brand’s purpose when making purchase decisions 
  • 62% believe a brand’s purpose is an important factor when making a quick or impulse purchase

“Donate Loyalty Currency” Drives Bottom Line Results

Loyalty Currency Donation programs drive bottom line results. Our research demonstrates that when a Loyalty Currency Donation program is aligned with a brand’s giving strategy, is simple, and enables consumers to choose a local cause they care about, loyalty members spend more.  

Large retail brands have produced positive results in which loyalty members that donate loyalty currency spend 1% to 3% more than loyalty members that do not donate loyalty currency. 

Time to Refresh Your Donate Loyalty Currency Program

If your “Donate Loyalty Currency” program is outdated or not revelant to today’s purpose conscious consumers, perhaps this is a good time to begin with an audit of your program.  A quick assessment of your program will provide you will a better understanding of how your program compares with other leading brands and a recommendation on how best to update and modernize your program. 

The ongoing tragedy in Ukraine and the recent injury of Damar Hamilin of the Buffalo Bills, provide powerful examples that your loyalty members want to give to causes that move them. Enabling your customers to donate their loyalty currency to causes is a triple win.  It is good for the cause, it is good for your consumer, and it drives bottom line results for your brand.

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