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Rewards as a Driver of Green Consumer Engagement

I believe that the idea of rewards in the green space have the potential to change consumer behavior without necessarily changing attitudes first. I first wrote about this in a 2007 blog post. Today, it remains a powerful way to expand the appeal of green.

As every marketer knows, it is expensive, time consuming and downright difficult to change consumer attitudes. By contrast, rewards can reframe the dialogue by creating a financial incentive for consumers to engage, regardless of interest or attitude. The result is that rewards can expand the target audience to those motivated less by altruism than by financial gain. Suddenly, consumers that did not make the environment a priority are willing to take action to earn rewards. Marketers should be fine with this as long as it helps achieve business objectives in a cost-effective way.

Interestingly, rewards can be a critical tool for companies looking to enhance their marketing efforts. Rewards can be a tool to:

Motivate Consumer Engagement. Today, marketers are tasked with engaging with consumers in order to increase brand awareness, change sentiment and motivate purchase. Rewards can accelerate this effort by incentivizing consumers to take desired actions in order to earn rewards. Such a cost per engagement model can be particularly relevant for emerging green products with low awareness, as it provides an added incentive for consumers to engage, perhaps tiered based on the type, level or value of the interaction.

Optimize Engagement Experience. Marketers can optimize their efforts by promoting those consumer behaviors or sequence of behaviors that are more aligned with desired outcomes. Here is how it might work: Consumers earn points as they engage with content or tools online or take offline actions. Consumer behaviors are tracked and associated with specific points earned and rewards redeemed. Marketers can then optimize consumer engagement by promoting those behaviors that are most correlated with fulfilling campaign objectives.

Enhance Existing Incentives. Even when financial incentives already exist, they may not be sufficient to grab – and hold – significant consumer mind share. Today, several energy platforms such as OPOWER motivate consumers to save money on their bills by empowering them with personal usage data, comparative feedback and tangible steps on how to reduce their energy use. Indeed, OPOWER has had success in changing consumer behavior, reporting that such passive (one-way) engagement does empower consumers to take action – with participating consumers averaging 1.5% to 3% in energy savings over a control.

Interestingly, the introduction of rewards may be able to accelerate and sustain such energy savings by providing a greater financial incentive (bill savings + rewards earnings) for a consumer to take action. Such a model turns passive consumers into active ones that are more likely to engage with home energy tools, to open ongoing communications and to purchase energy-saving products. Such a hybrid (passive/active) model was first suggested in a study, “Residential Energy Use Behavior Change Pilot”, authored by Carroll, et. al.*

Indeed, this was an impetus for a recent initiative from RecycleBank, an environmental social platform that realizes the collective impact of individual action. Through its digital offerings and partnerships with municipalities, haulers, small businesses and corporate brands, Recyclebank incentivizes green actions with points that can be redeemed for discounts and rewards. This year, RecycleBank partnered with Efficiency 2.0 to launch of two energy platforms – CUB Energy Saver (Commonwealth Edison) and Western Mass Saves (Northeast Utilities). Such platforms provide direct outreach to all consumers while providing the potential to earn rewards by those that actively engage.

David Wigder is a lifelong environmentalist and has worked as a business strategist, environmental engineer and marketer in the space.  He holds an MBA from Columbia Business School, an MSE in environmental engineering from the University of Michigan and a BA from Northwestern University. He recently joined Ogilvy as Senior Director, Marketing Strategy.

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2 thoughts on “Rewards as a Driver of Green Consumer Engagement

  1. Rewards are fine, but the behavior change typically only lasts as long as the rewards do. Studies like Lawrence Berkeley’s Driving Demand http://bit.ly/LBLDrivingDemand and Books like Switch http://bit.ly/erc76a show it takes a more nuanced approach to pair rewards with other behavior change approaches. OPower is much cited but 1 – 3% reduction is pretty paltry; their competitor Grounded Power got 10% reduction because they had a more sophisticated approach. Brands have the power of “social norms” behind them and should wield that instead of the weak power of bribes.

  2. While 1-3% may not be stellar, the notion that environmentally-oriented behavior can be changed without the monumental effort and cost associated with widespread attitude change is interesting. There is something to be said for normalizing better behavior as an expectation for how things are done, both for consumers and for small businesses, which have been lagging behind large corporations in their sustainability efforts. I’ll be looking further into how these models can be applied to SMEs and entrepreneurs.

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