Ethical Consumption Meets Membership Programs: Building Loyalty Through Sustainability

The effects of climate change are increasingly visible worldwide, whether that is in terms of rising temperatures, growing issues of air pollution in many parts of the world, or waste disposal. In this sense, many have begun to question the potential impact of unfettered consumption. Likewise, businesses that become implicated in human rights abuses, such as forced labor and child labor, face backlash from consumers in the form of boycotts or campaigns. 

How to Appeal to Consumers on Ethical Grounds

How, then, can businesses appeal to consumers in a way that is conscious of these global challenges? That is a question that many ask themselves at present. To this extent, customers are increasingly unlikely to want to be part of membership programs run by businesses that are seen as environmental polluters, or violators of human rights. This is what has led to the growing trend of ethical consumption. 

Ethical consumption points toward how consumers are more likely to buy from brands that they perceive as socially responsible. Furthermore, brands that have built up reputations for themselves as having a strong identity emphasizing not only corporate social responsibility, but socially conscious values distinguish themselves from the competition–American ice cream brand Ben and Jerry’s is one example. 

For one, customers hope for transparency from companies. This is particularly clear in that consumers do not want to buy goods with supply chains implicated in questionable labor practices that violate human rights. In this sense, companies need to be conscious of who they source from and the optics of sourcing.

Fair Trade and Sustainability

Fair trade is one framework for ethical sourcing, in linking farmers to consumers in a way that cuts out exploitative middleman practices, which may otherwise result in small-scale local farmers not receiving their rightful cut of profits. Though the framework has been most successfully applied with regards to fair trade coffee, or other agricultural products, perhaps this can apply to other goods and services as well. Indeed, at present, one also sees a strong push from global tech companies such as Apple toward ethical supply chains and green supply chains, which use green energy and source from suppliers that adhere to globally recognized human rights standards. 

Moreover, it has increasingly become a universal demand for companies to take on sustainable goals. Customers hope for companies to play their part in mitigating or working against climate change, avoiding waste and environmental damage, and seeking net zero goals. 

Customers also hope for durable products which last long and are recyclable when not, something that they likely want not only because it is environmentally friendly, but because it is a good value for themselves. In this sense, the rise of thinking along the lines of a “circular economy” has environmental goals in mind, but is also because customers hope for what is economical for themselves.  

Keeping Ahead of New Trends

How to integrate this with membership businesses, then? Some successful examples of companies that have managed to combine ethical consumption trends with membership programs include IKEA, which offers sustainability classes to memberships. 

One can offer sustainability rewards to members who are willing. Otherwise, one can provide incentives as a reward for sustainability. 

Emerging technologies such as AI allow one to further understand how customers have embraced new trends regarding ethical consumption. Big data allows one to leverage and analyze an enormous amount of data about one’s customers. 

Broadly speaking, what customers hope for from businesses is transparency. Customers want to see businesses be open about their practices and aim for avoiding harm, rather than seeking to conceal who they work with, and what practices they are implicated in.  

More than anything though, to succeed in integrating ethical consumer trends into one’s membership program, you will need to build a brand identity that emphasizes ethical business practices in a way that appeals to members. This can become the bedrock of a strong bond between you and your customers, in that your customers will identify with your business and trust on the basis of what they see as shared values. 

It is important to remember that this can serve as a means of distinguishing yourself from the competition and fostering loyalty from your members. Customers are also more willing to spend on ethically sourced products. What you offer as rewards, classes, or other incentives should be tailored toward strengthening that sense of shared values in terms of a commitment to ethical business practices. 

At Engagement Lab, we also explore evolving ESG trends and sustainable business practices.

Discover more insights to shape a responsible and forward-thinking strategy HERE.

To learn more about how you can monetize your loyalty program, get in touch with our consultants today!