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By: Mark Dority, Director of Marketing

Imagine a consumer named Cynthia.

Cynthia, as a customer of Airline XYZ’s frequent-flyer program (FFP), has racked up enough miles to buy herself a plane ticket to Paris, where she plans on spending two weeks museum-hopping, delicacy-sampling and people-watching.

She has miles left over after redeeming her rewards—but not enough to get her anywhere she’d like to go.

These unused miles are “orphans,” like most of the $16 billion in loyalty points, miles and rewards that go unredeemed every year.

Airline XYZ, however, has partnered with a company that allows Cynthia to turn those unused miles into a donation to a cause that she actually cares about, and one that she chooses. So Cynthia takes her unused miles and turns them into a donation for a cash-strapped orphanage in Africa, or an animal welfare group in Nicaragua, or even to a nonprofit right in her hometown of Boulder, Colorado, like the Boulder Ballet, where she can actually see how her miles-turned-donations make a difference in her community.

That’s what KULA calls “Cause-Related Loyalty Marketing”—taking the principles behind cause-related and loyalty marketing and enmeshing them in a way that rewards brands, consumers and nonprofits around the globe.

Cause Marketing + Loyalty = More Engagement for Brands By Sharing Consumers’ Values

The marriage of cause marketing and loyalty programs has come a long way from the early days of, say, Box Tops 4 Education, a no-tech initiative from General Mills that allows consumers to send in tops or lids from its breakfast cereals, cake mixes and other products. For each box top it receives, General Mills sends a dime to a participating school—with nearly a half-billion dollars going to over 90,000 schools since the program’s 1996 launch. This initiative was groundbreaking at the time it came on the scene—it set the benchmark for collecting loyalty points for causes.

It’s clear how the cause marketing and loyalty mix benefits consumers: after all, there’s research suggesting that helping others can make us happier than helping ourselves. Giving to causes we care about makes us feel good, and that positive feeling can serve as powerful fuel that ends up benefiting others—including brands and nonprofits.

Plus, a growing mindfulness among consumers means they take more time to discover if a brand shares their values before making a purchase. And when a brand does seem to share a consumer’s values, it stands to profit from the repeat business of a customer experiencing the psychological rewards of aiding a cause that matters to them, personally.

It’s All About Paying It Forward – For Consumers, Brands and Nonprofits Alike

Loyalty programs that allow consumers to “pay it forward” by donating the value of their unredeemed miles and points help brands to build lasting, more meaningful and deeply engaged relationships with those customers. That’s because businesses that use the Cause-Related Loyalty Marketing approach get to know their customers better—not just through their purchasing habits, but through the personal values that inform their charitable choices.

That’s not all. In this hyper-connected age of social media, charitable giving through platforms such as Twitter and Facebook has boomed, and social media users aren’t the type to keep their philanthropic donations to themselves. Sharing of charitable efforts on social sites turns these consumers into online brand ambassadors—helping not just the nonprofits they contribute to, but also creating visibility for the companies that enable such donations.

And then we have the nonprofits themselves. In the wake of the recent economic crisis, donations to even the largest charities dropped off precipitously, and they’ve yet to recover.

When there are so many organizations working to fill a never-ending need for food, clean water, education, health care and animal rights—just to name a few causes—the fact that $16 billion of rewards goes unredeemed every year means there is a whole lot more we can do with a loyalty program’s rewards. For a struggling yet worthy nonprofit organization, those untouched rewards could mean the difference between swimming and sinking, just as the same rewards represent opportunities for stronger connections between brands and their customers.

The emerging mix of cause marketing, loyalty programs and technology summed up in platforms like our Cause-Related Loyalty Marketing (CLM) solution is providing both parties in the brand/consumer relationship, not to mention the nonprofits who they contribute to, the opportunity to benefit each other—while helping to make the world, simply put, better.

Image credit: josemanuelerre