LoyaltyOne tries to influence positive “green” choices by dangling Air Miles in front of consumers — and it works

My Clean Break column this week takes a closer look at Air Miles for Social Change, a new division within LoyaltyOne, which runs the popular billion-dollar Air Miles rewards program. This new business division has spent the past 18 months partnering with government agencies, utilities and environmental groups on programs that get consumers to buy greener products, take transit, consume less energy, reduce their waste and embrace healthier diets and lifestyles. Normally I’m skeptical of anything having to do with loyalty programs, but here’s the thing: it seems to work, and work really well.

For some reason, a large percentage of the population really dig getting Air Miles. There’s trophy value to them, and while they’re worth much less than cash itself, members of the Air Miles program seem to treasure these rewards more than cash. An odd phenomenon, but a good one. That’s because for government agencies and utilities and transit authorities, handing out Air Miles in exchange for good behaviour is much cheaper than handing out cash in the form of discounts and rebates. And because they’re partnered up with LoyaltyGroup, which has direct access to and detailed information on nearly three-quarters of Canadian households (i.e. about 10 million), it gives them a less expensive yet highly more targeted way to reach out to consumers — at least when compared to that relatively ineffective and expensive medium called advertising. The Ontario Power Authority, the first agency to work with Air Miles on such a program to encourage energy conservation, found that it spent two-thirds less but got seven times the results compared to its advertising- and rebates-based approach a year earlier. You’ll get more details on that if you read the column.

Since working with the OPA, Air Miles for Social Change has run with the concept and now has about 25 similar programs on the go across Canada. It’s catching on.

It’s not that issuing rewards for good behaviour is an entirely new thing. It’s what Toronto’s Lowfoot.com is doing, as well as New York City-based Efficiency 2.0 — both focused on energy management for consumers. But what Air Miles brings to the equation, at least in Canada, is unmatched reach into households. And with that comes the power to influence positive change with carrots instead of sticks — not that we don’t need both.

11 thoughts on “LoyaltyOne tries to influence positive “green” choices by dangling Air Miles in front of consumers — and it works”

  1. There’s a massive mixed message: If you cut enough carbon emissions, we’ll treat you to a free plane ride- which will completely erase any carbon savings you might made by riding mass transit, etc.

  2. That’s a good point, Tom. I did ask them about this, and the company is frank in acknowledging this mixed message. From what I was told, the minority of Air Miles redeemed go toward flights, unlike other rewards programs such as Aeroplan. But nothing prevents someone from using it toward flights. In fact, the Air Miles logo specifically shows an airplane in it. Air Miles for Social Changes, I’m told, will soon be changing its use of that logo by eliminating the plane image. Doesn’t entirely solve the issue, but they recognize the conflict.

  3. Not sure Airmiles is being crystal clear on their math here. While most Airmiles “rewards” are other than air travel it is certain that the majority of total Airmiles redeemed go towards flights or hotels or car rentals that either directly or indirectly involve air travel. And let us not forget how those Airmiles were earned in the first place – consuming stuff. And further let us not forget that they have been doing this for 20 odd years and that when they first started air travel was the only way to go so all of that carbon for 20 years of this program is still up in the atmosphere keeping the polar ice cap toasty warm.

    Is a company that solely exists to promote consumption of their sponsor company’s goods and to reward those doing so with air travel (that isn’t even free after the boatload of taxes they dump on you) and then proceed to call themselves green – might this be an early favourite for greenwasher of the year??

    Oh they are changing the logo – oh well I guess that’s OK then ?!?!?

  4. Good to hear that actual users aren’t buying many flights.

    I did a quick guesstimation, and I think that 1 tom of CO2 is emitted on average for every 30,000 Air miles redeemed for flights (give or take a factor of 2 or 3) … any idea how many Air Miles you might get for reducing your footprint by about a ton?

  5. Actually a study from the European Aviation Authority states that a commercial airplane at 70% of its passenger capacity or higher has lower emissions per passenger than train or traveling on a large car. So if this program causes planes to travel at full capacity then it’s a good thing

  6. I find the best reward for collecting Air Miles (greatest amount of dollars reward per air mile) is buying Shell gasoline gift certificates. So I guess the conflict continues.

  7. FULL DISCLOSURE: I am a PR professional and Air Miles is a client. Now that that’s out of the way…

    Tom makes an astute point, indeed. And Tyler is right that the majority of Air Miles are redeemed for goods and services vs. flights. Another thing that somewhat mitigates the impact of Air Miles redemptions are the 100+ MyPlanet rewards available through the program (www.myplanet.ca). These are products that are either made using sustainable processes or materials (e.g. hemp sheets, Bullfrog Power discounts) or they encourage responsible behavior (e.g. public transit passes, electric scooters, WWF-Canada donations). Similarly, some Air Miles sponsors issue “bonus” MyPlanet miles when you puchase green products, so they are also helping encourage better consumer habits in this respect.

  8. Is it possible to transfer Airmiles points from one family member to another?. . I need to redeem a reward but I’m short a few points. I’d like to have another family member transfer her points to my account so I have enough to redeem the product..

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