Rewards as a Driver of Green Consumer Engagement

November 27, 2010

I joined RecycleBank for many reasons, one due to an observation regarding the application of rewards in the green space.  Quite simply, rewards 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 RecycleBank to partner with Efficiency 2.0 to launch of two energy platforms this year – 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.

Green marketers continue to be challenged by the notion of changing consumer attitudes in order to expand market appeal. Rewards create a shortcut of sorts by providing a direct incentive to motivate the desired behavior change. As a tool for green marketers, they can be a true game changer.

* “Residential Energy Use Behavior Change Pilot” by Ed Carroll and Eric Hatton of Franklin Energy and Mark Brown of Greenway Insights, commissioned by the Office of Energy Security, Minnesota Department of Commerce, April 20, 2009.

%d bloggers like this: