Canadian consumers may belong to more loyalty programs than ever before, but they’re actually using fewer of them, according to research from Bond Brand Loyalty that was released at the Canadian Marketing Association’s Connections conference this week.
Based on the soon to be released Bond Loyalty Report, which was produced in partnership with Visa, Canadian loyalty program membership grew from 9.8 memberships in 2014 to 11.3 in 2016, but the number in which consumers described themselves as active — in terms of collecting and redeeming points — fell from 7.9 to 7.3. The report, now in its sixth year, gathered responses from more than 19,000 Canadians.
To Alison Chick vice-president, loyalty and customer intelligence at Indigo Books & Music, the numbers suggest there are many brands that have launched a “me-too” loyalty program, but failed to make it a priority.
“It’s either core to your business or it’s not,” she said during a panel discussion at the CMA event. “There are programs with low frequency or a low value proposition and it’s not integrated into the business.”
That kind of thinking is a mistake, said Scott Robinson, vice-president, design and strategy at Bond Brand Loyalty. For example, 80% of consumers in the study said loyalty programs make them more likely to continue doing business with brands, and 66% said loyalty programs are more likely to make them recommend a brand to someone they know.
“There’s good affirmation that programs are having an impact on behaviour,” he said.
The one clear path to success is ensuring the top member of the C-suite in a company is supportive, said Matthew Seagrim, managing director of the Cineplex Entertainment and Scotiabank Scene loyalty program. CEOs or CMOs need to make loyalty programs a key factor in decisions around pricing, discounts and many other planks of the marketing strategy.
“There has to be deep-rooted commitment to making sure there is value to the program,” he said. “It’s about shaping consumer but also organizational behaviour.”
Another key is not recognizing that not every consumer is going to walk around with a wallet stuffed full of loyalty cards, Seagrim added. That’s why Cineplex Entertainment has introduced a number of digital tools, such as websites and a mobile app, to access and manage their Scene points balance.
“You have to remove barriers to participation,” he said.
That same flexibility needs to be built into the back end of loyalty programs, said Gayle Murdoch, senior director, payments, travel cards and value added services at CIBC. For example, social media may be a better channel to interact with some loyalty program members rather than relying solely on a call centre.
“Managing the cost doesn’t have to come at the expense of client experience. I think you can do [well at] both,” she said.
The Canadian Loyalty Report indicated one out of two consumers liked the idea of personalization in a loyalty program, but only 12% said they were getting value from the degree of personalization brands are offering today. Murdoch suggested that may be because companies are still trying to strike a balance between collecting useful data and not using it in a way that would be “creepy” to their customers.
Robinson showed stats that birthday offers were considered “very” personalized by 37% of those surveyed and very or somewhat personalized by 65%. Whatever the tactic, Chick said it was equally important to have a data science team capable of recognizing when customers might begin to start decreasing their engagement or purchases.
“By the time you notice the churn, it’s too late, right?” she said. That’s why Indigo customer representatives have been given some capabilities to add points to customers’ reward balance if those customers are deemed “high value,” or perhaps not spending as much as they could.
The Canadian Loyalty Report also showed that mobile usage is on the rise, but apps aren’t necessarily the way to go about it. For example, 44% of consumers said they wanted to use programs with their mobile phone, but only 17% have downloaded their loyalty program’s app and 58% don’t know if there is an app for their program.
