Fix. Loyalty. Now. More than half of Canadian consumers will leave your brand over unsatisfying rewards.
The Canadian loyalty market is changing in profound ways, and brands and retailers need new approaches to adapt. Evidence of this shift is pervasive: legacy loyalty programs like Air Canada and Aeroplan are fragmenting, and major retailers like Loblaws and Shoppers Drug Mart are countering this trend by consolidating their loyalty programs. Above all, the Canadian consumer is redefining its relationship to brand engagement in unexpected ways. In this environment, getting loyalty right is of paramount importance for brands and retailers – as is avoiding the pitfalls of poorly-executed loyalty initiatives.
According to results from our survey of 2,000 Canadian consumers and discussed in our new purple paper, Shifting Loyalties, 87% currently belong to just five loyalty programs or fewer, hinting at an “out of sight, out of mind” paradigm… and makes being in that “top 5” an absolute imperative.
What else did the findings show? Some major implications for Canadian brands and retailers, including:
1. There is opportunity in limited loyalty engagement – with the right approaches
Nearly half of Canadian consumers have quit a program that is unsatisfying and among those, 57% will abandon the brand altogether. But for those brands and retailers who get loyalty right, the reward is deeper brand engagement and ultimately higher revenues.
Solution: Reassess your loyalty program and your rewards and incentives structures. Are you creating different strategies for different customer segments or do you have a one-size-fits-all approach?
2. Data is more valuable than ever, and key to successful loyalty programs:
“Top 5” loyalty programs are built on data, which can be leveraged to drive personalization, targeting, geolocated campaigns and day-to-day digital interactions, as well as offers and promotions. Moreover, in exchange for sharing personal data, 45% of consumers expect personalized offers and communications, indicating that the perceived value of consumers’ data is rising. Solution: Be creative and give customers incentives to share more data – personalized communications, relevant rewards, improved omnichannel customer service, and geolocated mobile offers.
3. Channel preference is important across generations (and mobile is dominant):
Millennials have the highest expectations for mobile loyalty engagement, but in Canada, all demographics expect mobile capabilities from their loyalty programs. Millennials (83%), Gen X (64%) and Boomers (34%) all want to access information about their rewards status, points and offers on their mobile devices. Solution: Commit to offering loyalty seamlessly across all channels and platforms – online, offline, digital, mobile, in-app, and social media.
4. Loyalty requires new earning and redemption experiences:
Consumers’ expectations suggest that retailers need to provide omnichannel redemption experiences and personalized communications at each point in the customer journey. Thirty-seven percent (37%) of Millennials, 30% of Gen X and 21% of Boomers say they prefer instant rewards over longer earn-and-burn cycles.
Solution: Embed loyalty throughout all customer interactions and transactions, and offer rewards for non-purchase activities or experiences, such as taking a survey or referring a friend.
To learn more download our new purple paper “Shifting Loyalties”.