How green loyalty programmes are influencing customer loyalty

Coldplay is the name on everyone's lips for their ongoing tour. As it was in 2021 when they made headlines not for recurring reasons like a new album or song, Coldplay pledged and committed to sustainability and released a 12-point action plan to ensure that all their concerts did not leave a negative footprint on this planet. The band aligned to the values it adhered to the most and brought its plan into execution.

Their plan was simple, yet grand in scale. They partnered with renewable energy providers, cut their carbon footprint by 50%, and planted a tree for every ticket sold. For fans new and old, this action and commitment built a lifelong trust and a heartfelt relationship with the band.

Today, these efforts are no longer limited to concerts or events. We have seen a seismic shift in how industries and brands view sustainability. It is no longer a lip service or a compliance narrative. The philosophy of how businesses should be run has evolved for the greater good. While the effort was to drive a positive impact on the environment, it also brought consumers closer to the brand and increased their affinity and loyalty.

Why sustainability is becoming a key driver

Responsible decision-making and consumption are the way forward for the majority of consumers as their expectations around sustainability shift. This decision-making is not limited to buying brands but also revolves around the overall lifestyle, including food. Consumers today resonate with brands that not only offer good deals but also share their values.

Recent surveys show that a significant percentage of GenZ and millennials are willing to pay more for sustainable products—73% and 62%, respectively. They’re actively seeking out environmentally responsible companies, and they’re likely to stick with those brands long-term.

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Evolving loyalty programmes

While the age-old loyalty programmes, which offer consumers points for their transactions and purchases and try to incentivize through discounts, still exist and are also effective for a section of the audience, their disconnect with sustainability is creeping into their longevity.

Green loyalty programmes are the next stage of evolution. Brands today reward consumers not only for their purchases but also for their environmentally conscious decisions. These could be decisions such as eco-friendly packaging, recycling, or even standard shipping, which allows logistics providers to bundle packages to reduce the number of trips. These evolved programmes induce a sense of pride within the consumer as it is viewed as a step in the right direction towards being planet-first.

American footwear and apparel brand Timberland allows customers to use their earned loyalty points in support of reforestation efforts. Airlines, which are perhaps one of the leading contributors to emissions, are also offering their customers a chance to offset their carbon emissions through loyalty points.

Small actions, big results

So, why did Coldplay, one of the greatest and most beloved bands of their generation, decide to adopt sustainability? The answer lies in the numbers. A typical large event generates around 2 tons of CO2 per attendee, including emissions related to transit and stay. A minimum of 50 trees per attendee needs to be planted to offset this damage.

Not every brand can afford to plant thousands of trees; they can certainly adopt green loyalty programmes. When customers see that their preferred brands are attempting to make tangible and sustainable changes, such as sustainable packaging, the positive sentiment and the image of the brand can only go up.

Building trust in a sceptical market

The change in customer buying behaviour and high focus on environmentally conscious decisions have also led to an increase in the practice of “greenwashing,” i.e., exaggerating or falsely claiming environmentally friendly practices by brands. Consumers are becoming increasingly cautious, and fact-checking data is being shared on measures, impacts, and steps taken to get there.

Brands have seen their customer retention rates increase by as much as 20-30% thanks to a well-defined, clear, and purpose-driven loyalty programme. The programmes backed by actionable data have been the backbone of building trust. Whether it is regarding trees planted or emissions controlled through sustainable practices, data transparency has been the make or break of green loyalty programmes.

Looking ahead: The potential of green credit

The concept of green credit (loyalty points for sustainable choices), which allows customers to use it for discounts or even donate to environmental causes, is on a significant upward trajectory.

The appeal of such a system lies in its flexibility. It could allow customers to redeem credits not just with one brand but across multiple companies, encouraging wider participation in sustainability efforts.

Loyalty for the long run

Green loyalty programmes aren’t just a new way to engage customers—they’re a reflection of how consumer values are changing. By integrating sustainability into their loyalty strategies, brands can foster stronger, longer-lasting relationships with their customers.

The key isn’t in grand gestures but in offering customers the opportunity to make a difference, no matter how small. When customers feel that their everyday choices are contributing to a larger cause, they’re more likely to remain loyal.

(Abhinav Jain is the CEO and Co-founder of Almonds AI.)