Marketers used to believe that discounts were the fastest way to their customers’ hearts. Today, it’s becoming increasingly clear that the only thing those offers were getting access to was their wallets.
To win customers’ affection and long-term loyalty, you’re better off helping them support causes they care about. Instead of offering, say, $20 off every $100 spent, give the customer the option of donating that to charity.
It sounds counterintuitive: people love discounts! Who hasn’t felt their pulse quicken at the prospect of a bargain?
But in a market where your brand identity and what you stand for matters more than ever, making charitable donations part of your business model doesn’t just feel good: it can boost your performance.
Andrew Forman, Givz founder, described how in an interview on the eCommerce Fastlane podcast.
Discounts are a double-edged sword. A flashy 20% off coupon can score you a quick sale. But the customer is loyal to the discount, not your brand — and you can’t keep giving money off forever. In contrast, offering customers the chance to send a charitable donation in lieu of receiving a discount makes them feel good, and connects that positivity to your brand.
There’s a constant strategic debate between bringing in as many customers as possible with offers and low prices, or investing upfront in building brand loyalty over time.
One major issue with taking the discount approach is that it sets expectations around your prices that are very hard to change. If cutting prices is your main strategy for boosting sales, customers will wait for your next offer and never pay full price. This approach also encourages your competitors to slash their prices, which makes it even harder to get out of the discount cycle. At that point, you’re all just racing to the bottom.
Also consider that as well as costing you on the bottom line, being seen as a “discount brand” — while successful for some — can dilute messaging, especially if you want to be known for high quality products.
More than ever, people want the brands they buy from to have a mission that’s about more than adding a lot of zeros to the end of your net worth. They want companies to have altruistic values, and put their money where their mouth is.
That’s why the one thing customers like even more than a bargain is feeling good about their purchase. Offering them the chance to give a charitable donation instead of a discount tells them that your brand values people and community and sees them as more than the content of their wallets.
It also sends your customers a message: you see them as generous, caring people — which is flattering to even the most astute coupon-cutter.
There’s tangible evidence to show that the pull of this story is stronger than saving a few bucks. Givz has found that marketing emails touting the opportunity to make a donation with a purchase convert at the same rate — or even higher — as emails with discount codes.
And unlike discounts, this opportunity deepens the customer’s connection to your brand. Instead of associating you with offers (and waiting until they’re valid to purchase), people will see your brand as one that’s willing to help them invest in causes they believe in. That close association means they’re more likely to choose you again in the future, even over a competitor offering a discount.
Beyond building one-on-one brand loyalty, seeing which charities people support gives you additional insights your business can use to find more customers.
For example, if your Givz report is showing that 75% of your customers chose to donate to a tiger protection charity, compared to 25% who gave to a children’s charity, you know that you should be targeting animal lovers in your social media campaigns. If one charity in particular is attracting the most donations, consider reaching out to them about a partnership.
Speaking of social media campaigns, don’t be shy about promoting all the giving you’re supporting. Statistics like how much you and your customers have donated, and lists of the charities you’ve supported, make great eye-catching marketing content.
Once you’ve decided to enable charitable donations, Givz streamlines the process of getting the money from customer to charity, and recording those transactions: all you have to do is make some key decisions.
There are a lot of charities to choose from, some more aligned with your company’s values than others. When you’ve decided to make the step to offer donations, you have two options:
Provide a shortlist of charities your customers can choose from.
Allow your customers to choose whichever charity they want.
If you decide to provide a shortlist, don’t make it too long. Even the best-intentioned people will not scroll through descriptions of 10 charities, meaning the ones at the end of the list won’t get any donations — bad for them and for your metrics.
Another thought: Research has shown that when customers were allowed to choose which charity they donated to, they spent three times as much, compared to when they were offered a shortlist. Good for the charities, and for you.
The concept of combining business with charity isn’t new, but it hasn’t always generated a positive response.
People have been burned by brands that promised to, say, plant 1,000 trees for every pencil case sold and then… didn’t. They want to know that their donation is actually going where you say it’s going.
Make the giving experience clear and interactive. On Givz, customers are presented with a screen during checkout on which they choose their charity.
This process moves charitable donations tied to a purchase from some vague promise buried in the home screen or on a Facebook ad to something the customer does themselves and sees go through. It proves your brand really is living up to its promises, while also making donating as easy as possible.
Yes, it is better to give than to receive Instagram likes, as the old saying (sort of) goes. But it’s also true that we, humans, love to show off how generous we can be.
Making it easy for people to share their donation to their social media accounts not only is a way for people to give themselves a pat on the back, it has the added benefit of promoting your company and the charity supported.
And you didn’t even need to give them a discount!
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Givz discounts cost 75% less than traditional discounts on average