3. Value-based loyalty program
The value-based loyalty program is another common type of loyalty program, but different from others because it does not offer explicit rewards to customers, such as discounts or other benefits. Instead, value-based programs focus on the organization’s values and, ideally, the customers’ values.
Value-based reward systems seek to retain customers by giving back to causes they care about. For example, a company may commit to donating a portion of its revenue to a charity or orphanage after a certain number of items are purchased. While the customer may not receive a direct reward for their purchase, they are likely to repeat their purchase if they feel their sponsorship positively impacts the world.
Value-based programs are great for eCommerce businesses looking to drive sales in an online store. Gen Z, described as the most critical consumer group to date, has a different view of shopping and consumption than previous generations. They are the latest to enter the workforce and have strong purchasing power.
With an increased demand for higher quality items and tighter control over spending, brands must earn their place in Gen Z’s wallet. Generation Z cares deeply about the planet and the future, which presents a huge opportunity for sustainable business growth. They believe the generations before them represent overconsumption, capitalism, and materialism. Thus, a value-based loyalty program can be essential to rally to their values and stimulate more sales from them. For example, the retailer Sephora allows its members to donate their reward points to the National Black Justice Coalition.