How Nectar360 Builds Purpose-Driven Loyalty Through Sustainable Partnerships

1. What factors should be considered when extending collaborations to ensure mutual benefit and continued impact?

The key is to ensure that all parties can see continued value in the partnership. In a sense, it is like a triangle of three questions: 1) what do customers need, want and value? 2) what is your brand partner trying to achieve? 3) what are you [Nectar360] trying to achieve? 

When designing any programme, it's important to address these three questions. By doing so, we can deliver mutual benefit and increase the likelihood of the partnership’s success.

2. Nectar360 recently announced the partnership between the Nectar loyalty scheme and the Woodland Trust has been extended to 2027. What metrics should be used to evaluate the success of conservation-focused loyalty initiatives in particular?

There's no one-size-fits-all metric, all partnerships are unique. In sustainability partnerships, the success metric might be raising awareness of a specific cause or driving meaningful change on an issue. 

For instance, conservation-focused loyalty initiatives aim to change customer behaviour to help drive change for the environment, encouraging actions such as planting trees, donating to food initiatives, or reducing water usage.

With our Woodland Trust partnership, Woodland Trust members who’ve lined their Nectar account can earn additional Nectar points by purchasing their favourites, including apples, eggs, chicken, turkey, reusable bags, and cards from Sainsbury's. Customers can also donate points to support environmental efforts like sowing wildflower meadows, planting trees, and protecting woods.

In our Severn Trent Water partnership, the goal of the trial is to encourage customers to use less water. Success is measured by how well the loyalty scheme's incentives, like extra Nectar points coupled with lower water and energy bills, promote and sustain this behaviour. An increase in Nectar membership numbers would also be a positive metric for evaluating the impact of such collaborations.

3. How can loyalty programmes effectively align with broader sustainability initiatives?

The most important thing is to ensure the value exchange and outcomes are clear to the people that engage with them. Whether they're buying something or redeeming points, they need to know not only what the initiative is supporting but also how it contributes to the sustainability or environmental measures behind it.

4. How can companies ensure transparency in reporting the environmental impact of such programmes?

Companies can ensure transparency in reporting the environmental impact of their programmes by leveraging the scale and marketing reach of partnerships like Nectar. This approach drives engagement and heightens awareness of the outcomes delivered. Additionally, publishing comprehensive CSR reports that outline sustainability goals, priority areas of focus, key commitments, and progress is crucial. Aligning these goals with the UN Sustainable Development Goals ensures that the company is making a significant impact and playing a leading role in building a more sustainable food system.

Sainsbury's Plan for Better exemplifies this approach, with its three interlocking pillars: Better for you, Better for the planet, and Better for everyone. This ensures that stakeholders and customers are informed about the company's efforts and achievements in sustainability, thereby maintaining transparency and accountability.

5. What are the challenges in aligning corporate sustainability goals with customer reward systems?

Traditional programmes focus on straightforward transactions, whereas aligning sustainability and rewards is more complex as it requires us to impact customer behaviour for a specific cause.

Evolving beyond this requires creative thinking and advanced insights. Understanding the impacts of behaviour, whether related to sustainability or commercial goals, can be complex. Without advanced insights capabilities and the ability to engage customers creatively, it becomes challenging for marketers to determine the appropriate level of loyalty for a given behaviour.

6. How can similar models be adapted to address other sustainability challenges?

Just as with the Severn Trent example, which incentivises reduction in water usage, or the donation of accumulated Nectar points to fund the Woodland Trust’s conservation activities, there is scope for adaptation within this model to support other sustainability objectives. That could be switching the type of energy someone uses to a greener option or rewarding for the use of electric car charging e.g., customers are rewarded through Nectar for using Sainsbury’s Smart Charge facilities.  

The principle of getting value back for changing your behaviour is the basis of loyalty programmes. So, as well as - or instead of - giving financial value back to members, these schemes can absolutely be used to drive positive actions that support the planet, with consumers incentivised by a new type of currency: the knowledge they are doing good.

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