The effects of a loyalty program in achieving corporate social responsibility - A South African retail banking firm perspective

Abstract

With the increasing prominence of corporate sustainability, corporate social responsibility and social activism in the corporate environment, the perceived notion of being a responsible and authentic corporate citizen is critical to business survival. Stakeholder theory posits that business stakeholders are an essential component to their success and longevity, and with an added consumer focus on social activities in all its forms, firms are to be purposeful around their value add to their socially conscious consumers. Loyalty programs (LPs) have become an essential tool to manage consumer expectations and collaboration. Historically, LPs have been highly commercially focused by encouraging commercial behaviours for customer fiscal gain. The South African retail banking firm landscape is well known, and market share is dominated by the five large banking groups. A recent development is the incorporation of firm social or sustainability targets into LPs. This study leveraged the concepts of stakeholder theory to determine the consumer attitudes, motivators and deterrents of having social causes embedded into bank LPs for customer reward donation. Further, to uncover the associated effects on brand perception. This study adopted a qualitative, exploratory research methodology underpinned by stakeholder theory. Semi-structured interviews were conducted with SA retail banking customers to understand the abovementioned phenomena. The primary research outcomes were that SA retail banks are required to play a more purposeful role in engaging their consumers to enhance participation and contribution to social causes embedded into their LPs. Even though SA retail banks have the platforms for consumers to participate and contribute, consumer preferences, involvement, and more importantly, awareness was lacking. Customer engagement was considered one dimensional and therefore, was in conflict with stakeholder theory as consumers were not aware of social benefits.