A Rewarding Partnership

In the broader economy, companies from airlines to automakers are enticing customers to spend their money with them by offering reward programs. The waste management industry is also banking on people’s desire to be rewarded for what they’re already doing. Additionally, waste management companies, such as Phoenix-based Allied Waste Industries Inc., are looking to increase curbside recycling participation rates in the communities they serve.

In an effort to increase recovery of recyclables, Allied approached New York-based RecycleBank, the developer of an incentive program for curbside recycling programs, with the intention of taking its program nationwide.

While RecycleBank has partnerships with municipalities and local haulers, the Allied partnership is the company’s first nationwide partnership. It’s also Allied’s first time using an incentive-based recycling program. "We see it as an opportunity to strengthen our customer bases and demonstrate our commitment to environmental practices," says Dan Jameson, vice president of government relations and municipal services for Allied.

Jay Leyden, senior vice president of customer development for Allied, adds, "As an added benefit, we hope to be able to increase our diversion rates by increasing the rate of recycling material going into our material recovery facilities (MRFs)."

The partnership also opens the door for RecycleBank to increase its national presence and to gain access to Allied’s more than 6 million residential customers, says Ron Gonen, RecycleBank’s CEO.

But before either Allied or RecycleBank can benefit from this partnership, they must move the program from concept to curb.

Rolling out a RecycleBank program on the scale Allied requires will be a challenge. Although RecycleBank has set up similar programs in the past, a rollout of this magnitude is a first. "We’ve built our business to scale so we are confident we can replicate the success we have had at a local level to a national level," Gonen says.

Working with Allied’s large client base is new for RecycleBank, but working with haulers and municipalities is not. RecycleBank does business with more than 40 municipalities in 10 states and has contracts with Waste Management in New Jersey and Pennsylvania, Republic Services in Virginia, Waste Connections and a number of independent waste haulers. "We have a fair amount of experience creating significant value for a variety of haulers," Gonen says. With the addition of Allied Waste, he says RecycleBank hopes to serve communities in more than 20 states by 2010.

Going into the partnership, Allied says it is most concerned about the effects the program will have on its customers. "Our goals are to ensure our customers’ needs are met and that we are offering the right incentives to encourage recycling," Jameson says. In response to these concerns, Gonen says RecycleBank serves as a way to help Allied increase customer loyalty and profitable market share.

RecycleBank also gives Allied the opportunity to switch its customers to single-stream recycling. "One of the requirements of RecycleBank is that the program has to be single stream," Jameson says. "Currently, not every Allied customer does that." Today, Allied has converted 15 percent of its operations to single-stream recycling and is considering which regional markets in which to next invest in single-stream processing equipment.

The new partnership also has additional benefits for RecycleBank. For one, Allied’s massive footprint will give RecycleBank access to more than 6 million residential customers. "The partnership will also help RecycleBank gain entry into municipalities that may have had an existing contract," Gonen says.

Allied is rolling out pilot programs in Minneapolis, Dallas/Fort Worth and the state of California. "We looked at where our infrastructure was in those areas as well as where we were getting a lot of enthusiasm for our recycling initiatives," Jameson says.

For example, in the Dallas market, Allied uses seminars to educate customers on the program’s components, Jameson says. Allied invited residents to a two-hour off-site seminar that was more focused on educating, not selling, the program to customers, Jameson says. "Within a three-week period we added 70,000 new homes to the program," he says.

Bryan Zimmerman, a market vice president for Allied, is responsible for the implementation of the program into his Minnesota territory this fall.

Zimmerman is part of a team made up of RecycleBank and Allied representatives that meets regularly to discuss communication and the technology associated with RecycleBank within this particular market. "We also spend quality time working with local customers to help educate them as well as finding local business partners for the rewards program," he says.

On the corporate level, Allied and RecycleBank established a planning group that created the "master plan" for the implementation process.

"The most important component of the plan is to make sure it’s repeatable and scaleable," Jameson says.

For example, it is important that all of Allied’s trucks can be retrofitted with RecycleBank’s RFID (radio-frequency identification) reading equipment. "Retrofitting our trucks was the biggest challenge," Zimmerman says. "We solved the problem by having the technology designed to fit each type of truck."

The Minneapolis market is retrofitting six trucks to start and plans to increase this number as the program takes off.

RecycleBank’s program is designed so customers earn points based on the weight of the material they recycle each week. Since RecycleBank’s inception in 2005, it has recruited more than 450 local and national reward partners, including Kraft, Coca-Cola, Evian, CVS Pharmacy and PETCO.

Each Allied customer will receive a cart embedded with a RecycleBank RFID tag. During collection the carts are scanned and the household’s information is downloaded into the computer system on the truck. At the end of the route the material is brought to a recycling facility and loaded onto a scale. The combined weight is then converted into points that are distributed evenly among the participating households. As for non-participating households on that route, Jameson says they are earning more credits for their neighbors who are participating in the RecycleBank program.

Speaking from past experience, Gonen says households participating in such a program recycle 23 pounds of material per week on average. He adds that this number varies from community to community and that prior to RecycleBank’s program these households were probably recycling from 3 to 13 pounds per week.

He says Allied can expect to see a 25 percent to 100 percent increase in the amount of material each home recycles.

Gonen says a household that fills its recycling container to capacity every week can earn approximately $400 worth of reward points per year.

So far, the Allied and RecycleBank relationship has been smooth, and both partners have high expectations for the program’s future.

Last year, Gonen says, more than $1 million worth of RecycleBank points were spent in local economies and he says he expects this number to increase as the Allied rollout continues.

Allied Waste remains focused on its long-term goals, which include gaining customer loyalty, increasing profitability and providing customers with a valuable service. Allied aims to add 1 million customers to the program by the end of 2009, with a projected 18 percent to 20 percent increase in the volume of material recovered, Jameson says.

"Allied also expects to see an increase of about 20 percent in recyclables coming into the company’s facilities," Jameson says. "We have a good start. Now we need to exceed these goals going forward."