Earning consumers’ loyalty can lead to a lifetime of value for brands—but doing so requires significant investment in the issues that matter to them, according to a study from Yotpo.
The e-commerce marketing platform surveyed 3,800 consumers from the U.S., Australia, Germany, France and The U.K. during December 2021, and found that shoppers of all ages now expect more from brands and retailers than traditional, “earn and churn” loyalty program models that trade dollars for special perks. Instead, “shoppers want to buy from brands that make them feel like an individual, not just a transaction,” Yotpo wrote, noting that the new “era of the brand experience” requires a multi-faceted approach that appeals to their values.
Tentree encourages loyalty by demonstrating environmental impact
Sustainability and social responsibility have become compelling issues for shoppers, and more than 84 percent of respondents said they’re more inclined to buy from a brand that shares their values on issues like the environment and worker welfare. Nearly half of surveyed consumers told Yotpo that having supply chain partnerships with factories that mistreat employees would actively discourage loyalty to a brand, while 22 percent said that learning of a company’s heavy ecological impact would dissuade them from making repeat purchases.
On the other hand, a solid brand mission with clearly elucidated goals and demonstrable impact can bring them into the fold—and keep them coming back.
Canada-based basics brand Tentree plants 10 trees for every dollar sold. The business model earned the decade-old brand B Corp certification in 2016, according to Tentree co-founding CEO Derrick Emsley. “There’s a growing awareness of the certification,” he said, along with greater customer recognition in recent years. The B Corp framework has also helped Tentree benchmark progress and augment its goals, Emsley said. Now, a new project is helping to convey those efforts to consumers.
Tentree has eschewed the traditional, linear loyalty program framework, which involves consumers forking over cash or data in exchange for access to rewards. Instead, the company is tapping into shoppers’ drive to do good by giving them access to information about the environmental impact of their purchases.
“We had this idea of making impact more tangible,” Emsley said. The brand created a tree registry program, which allowed shoppers to access details about the trees tied to their purchases through QR codes on the garment tags. “The question became, ‘How can we how can we actually grow the implementation of this and make it more exciting and interesting to the customer?’” Now, that concept has evolved into a gamified interface known as the Impact Wallet, which lives in the Tentree app.
A map allows shoppers to see virtual renderings of the world’s forests, along with insights about global communities and their planting projects. The Impact Wallet contains data like the tons of CO-2 sequestered by each effort, allowing shoppers to visualize the real-world impact of their consumption choices. They can unlock perks by completing tasks on the app, like sharing their personal impact data with friends and family. The app’s insights are generated by a blockchain-driven verification platform dubbed Veritree, which was developed by Tentree to ensure that reforestation projects are permanent and that there is no double-counting of trees.
While the Impact Wallet is still in its pilot phase, Emsley said that Tentree’s insights about the value of sharing data with shoppers are encouraging. “The lifetime value of the customer increases by more than 70 percent if they interact with the tree registry program,” he said. “It means that your existing customers are coming back more because they respond to this.”
With up to 15,000 consumers using the impact wallet already, Emsley said the project has become a driver for customer acquisition as well as an informational resource for decision-making. “We have this tool that we can continue to iterate on, and really improve upon,” he said. “We see the impact each of those small decisions has had on consumer experience and increasing their lifetime value,” he added.
Loyalty programs drive long-term value
Yotpo data underscores the value of loyalty programs in both driving repeat purchases and keep customers around for the long haul. Providing “hyper-relevant, personalized experiences that make them feel valued,” and ensuring that they have “relationship-catalyzing moments” throughout every interaction with a brand will deepen a consumer’s bond with a brand, Yotpo said. Emails, content on a brand’s website and SMS messages are all opportunities for personalization, and digging into loyalty program data can help brands develop messaging to accurately target individuals.
Men’s fashion label Mizzen+Main, for example, incentivizes shoppers to take its style and fit quiz by promising loyalty points. In the process, shoppers hand over valuable data like shirt and pant size, preferred styles, and height, that ultimately allow the brand to curate customer experiences and recommendations more likely to drive conversions.
Shoppers are clear about the influence of loyalty programs on their purchasing decisions, with 83 percent of survey respondents said that belonging to such a program influences their decision to shop with a brand again. Sixty percent said that joining a loyalty program increases their brand affinity.
More than 38 percent said that they considered themselves loyal to a brand after returning to shop more than five times. And more than 67 percent of global shoppers said they preferred to shop directly with brands through their direct-to-consumer channels instead of through retailers like Amazon.