25 January 2022 The last few weeks have seen several programs push forward green initiatives in their loyalty programs. We examine them and ask the question how green loyalty programs should become (if at all) and what is behind these moves. Much of the headline news went to Qantas for announcing its Green tier level in its loyalty program (to be launched in February) and Etihad with the launch of its Conscious Choices. But they were definitely other lower profile green initiatives before, although not necessarily called like that. Sustainability as new topic But why this dynamic in the space all of a sudden? It is no secret that sustainability has emerged as new society topic worldwide – including in markets like China, which one might not have considered the most sensitive one in such questions not so long ago -, impacting also the view on the travel industry. However you turn it, travel has the issue of not being sustainable. Yes, it might have only a minor contribution to emissions etc., but it has shifted to a bad light because a big part of the population views travelling – unlike heating or driving cars – as unnecessary activity. And as a matter of fact, they might even be right to a big extent in the same way you could think about any other leisure-type of activity. If you stayed at home, you’d probably produce less emissions. While new technologies might reduce the problem a bit in a few years’ time, the question for the industry is how to bridge that time gap and improve the awareness by the general public. The general idea is that travellers should not feel guilty when using services of travel companies – and that is how loyalty programs got involved as primary B2C communication channel. Three different approaches Thereby, three different approaches can be observed.
- Redemptions: Using the currency for donations to green causes or to offset carbon emissions or finance other sustainable actions. This is actually nothing new and has been practiced by several programs, such as Lufthansa’s Miles & More, for years.
- Accrual: Incentivising green behaviour by a mileage accrual. For instance, SAS’ EuroBonus members can opt to pay a surcharge to use sustainable fuel and earn loyalty points for that – by the way at the same rate as if they purchased points straight away.
- Recognition: Both Etihad and Qantas take the concept to the recognition level, where members are rewarded for sustainable behaviour during their travels (e.g. by travelling light), but also in their everyday life (e.g. by installing solar panels). In the case of Etihad, they earn qualifying tier points, in the case of Qantas, they can attain a new (parallel) tier level, called Green (benefits have not yet been communicated as I am writing).