Companies Should Reward Responsible Behavior Post Coronavirus

Coronavirus has Shined a Spotlight on Sustainability

I am sad to report that the images many of us were delighted to see of dolphins frolicking in the traffic-free canals of Venice and off the coast of Mumbai were fake news. There is some news about the positive impact that COVID-19 has had on the environment that is real. Cities with the most air pollution have the cleanest air in decades and normally busy waterways are the cleanest they have been in years. Humans are getting a glimpse of what would happen to the Earth if we simply weren’t here, and sadly, it looks a lot more beautiful.

LinkedIn is cluttered with predictions about how consumer behavior is going to change when the world and the economy recover from Coronavirus. Some predict that consumers will be more conscious about the brands they choose. Some suggest that travelers will stay local and spend more time in one destination. People will be more conscious about their carbon footprint. The truth is that nobody can predict how consumer behavior will shift, for how long, or if at all, once this is all over. What if companies use their marketing power and loyalty programs to proactively influence consumer behavior going forward? How can we reward responsible and sustainable behavior?

The Conflict Between Sustainability and Profitability

Until today, businesses have applied their creativity and invested time and money to figure out how to increase the quantity and frequency of consumption. The assumption is that more frequent engagement will result in greater profitability. The result is an obscene amount of waste and over-consumption.

-      Excessive packaging for online orders: Physical gift cards on Amazon arrive bubble wrapped and in a box.

-      A culture of winning no matter the cost drives us to travel 20 hours for a 1 hour meeting.

-      Loyalty programs are designed to reward frequent consumption of goods and services.

Can Loyalty Programs be Used to Reward Good Behavior?

Airlines

Reducing the drastic gap in customer experience between classes of service on airlines would encourage more responsible behavior. Frequent business travelers will do whatever it takes to achieve the highest elite status possible because having to fly without any status is so painful. This encourages people to fly unnecessarily and to game the loyalty program system. Airlines must recognize that the incredibly rapid adoption of video conferencing during the Coronavirus pandemic will have a permanent effect on frivolous business travel in the future. Programs should be adjusted to reward travelers who always choose the same airline for the times they must travel, but should no longer entice people to travel more frequently if not needed.

Supermarkets

Supermarkets could have a very powerful impact on climate change. Perhaps points should be doubled for any products that do not include any animal products. What if point values were increased based on the quantity that one purchases in one visit? This would discourage people running to the store for just one item. Some supermarket chains like Kroger have very effectively incorporate fuel credits into their loyalty programs. Perhaps these credits should be more valuable if people drive more fuel-efficient cars.

Retail

Apparel companies are coming under intense scrutiny as consumers more conscious about their purchasing behavior and their impact on the environment. The apparel industry is one of the most heavily polluting industries. H&M has responded by creating more sustainable materials. Nordstrom recently opened a new second-hand clothing line within its department stores. The demand for circular fashion is on the rise as new online entrants like Poshmark are increasing the awareness and adoption of second-hand clothing. Loyalty programs from apparel brands should reward consumers who purchase second-hand clothing or items made with more sustainable materials.

In 2019, major retailers like Target launched same day in-store pick-up and delivery services. The current environment provides a perfect opportunity to increase the adoption of these services to get an upper hand on Amazon that is notorious for wasteful packaging. The recently launched Target Circle loyalty program could be tied into this effort to drive behavior that is more environmentally friendly than the more popular alternative.

Hotels

We stay at hotels for both business and leisure. Similar to airlines, hotels will face a new reality after Coronavirus. Business hotels could offer higher point rewards per night for longer lengths of stay. This would discourage business travelers from traveling just for one night and would encourage making better use of each trip. This is good for the employer, for the hotel, and for the environment. Hotels could also collect better data on loyalty members and their likelihood of eating meals in the hotel. If hotels had a better sense of how many guests would show up to the breakfast buffet, this would significantly reduce food waste.

In 2019, we saw companies like Tripadvisor and Virgin Holidays stop promoting and selling tickets to parks that use captive dolphins or whales for human entertainment. I find it a bit strange that this policy was not extended to the multiple resorts that still offer “Swim with Dolphins” programs. There are even many resorts that still have captive dolphin programs on site. Perhaps all the recent news, both real and fake, will breed a more conscious consumer and demand for these activities will fall once and for all.

Before its acquisition by Expedia, Travelocity had launched a program called "Travel for Good" which encouraged travelers to combine their holidays with some form of community service. The program was relaunched in 2015. Education and giving back to the local communities where hotels operate is probably where the hospitality industry can make its strongest impact. Hotel companies could implement a significant point bonus for guests that do something during their stay to give back to local communities. Set up local education programs and allow guests to participate with opportunities to earn points and elite status with each donation of time.

Let’s Make Loyalty Programs a Force for Good

Credit scores were created to give lenders a universal measurement of a consumer’s likelihood of paying back a loan. Scores are impacted by a variety of factors from how punctual a consumer is with their loan payments to the ratio of borrowing to earnings. What if a new score was created to measure each consumers’ social and environmental consciousness, or carbon footprint? If you buy the box of cookies that has each one individually wrapped, have one single item shipped to your house, or fly across the ocean for one night, this all would negatively impact your carbon footprint score. Perhaps companies could offer benefits to those that have better scores. Maybe consumers could earn a tax credit, or earn higher loyalty status. Travel more responsibly and earn miles and points faster.

The Coronavirus pandemic has generated serious discussions about what the world has learned, and how the world will be different when it’s all over. Will we all just go back to our routines of overconsumption, waste of natural resources and polluting the air we breathe? Maybe. But companies have a responsibility to become more introspective and adjust business practices to be more sustainable. Some loyalty programs have created a powerful mechanism for rewarding behavior, and the opportunity exists for those programs to start rewarding sustainable and responsible behavior.