Cause-related loyalty marketing

Cause-related loyalty marketing is a recent trend in cause marketing. As the name implies, CLM is the marriage of cause marketing and loyalty programs. Cause marketing occurs when for-profit companies join forces with nonprofits to promote a cause. Recent examples include Nike, Inc. partnering with Livestrong, athlete Lance Armstrong’s cancer-fighting foundation, and Eastman Kodak teaming with stationery designer Bonnie Marcus in support of Breast Cancer Awareness Month. CLM, however, takes these donations and corporate social responsibility efforts one step further, wedding them to thousands of customer loyalty programs. Rather than requiring the outlay of funds from donors, CLM essentially “recycles” loyalty program members’ unused points or miles. It then converts them into usable currency for a cause of the loyalty members’ choosing.

With consumer spending still depressed following the Great Recession, with an adjusted-for-inflation 2011 uptick of just one-tenth of a percent from 2010, companies are putting more effort into retaining loyal, high price-point customers. While loyalty programs are one way to achieve that aim through traditional points and rewards, CLM taps into increasingly cause-conscious consumers' tendency to patronize companies that support social causes. In an age where the US alone recycles 45 million tons of paper (as of 2010), re-purposing unused loyalty points or miles fits in with that new level of worldwide consciousness.

Today, merging an existing loyalty program with a cause-related marketing campaign requires a business-to-business technology platform that supports a consumer-facing website. For example, KULA Causes Inc., of Boulder, Colorado, operates an online platform that enables companies to manage loyalty-program content and gather customer metrics while allowing loyalty customers to donate unused points, miles or other rewards to any of 2.5 million nonprofit organizations in 50 countries.

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