Canadians Are One Loyal Bunch

Admin July 25, 2012 0

 

Canadians are one loyal bunch, survey says.

“Everybody belongs to at least one program and it affects how most shop”

Canadian consumers aren’t the only ones who love loyalty points and rewards.

Retailers – from airlines and banks to grocery stores and hotels – love the sticky habits that keep their best customers coming back for more, new research shows.

A whopping 92 per cent of Canadians belong to at least one loyalty program.

The technical term for that sky-high participation rate is “everybody,” quips Rob Daniel, vice-president of loyalty and research at Maritz Canada, a consulting firm that specializes in reward programs.

“The main reason why people love points and loyalty programs is really simple,” he says. “They love the idea they’re getting something in return for behaviours they would do anyway.” Each Canadian carries an average of six loyalty cards, although those who earn more than $125,000 per year have double that number.

Here’s the part that businesses love: affluent consumers are most likely to change their shopping patterns to accommodate loyalty programs.

That’s according to a year-long survey commissioned by Maritz that spoke to more than 6,600 Canadians and covered 59 loyalty programs. It was released in February.

About two-thirds of those surveyed said they are more likely to continue doing business with a company that has a loyalty program.

And just over one-third, 35 per cent, have driven past one retailer to get to another one where they can earn more points.

“Participation in loyalty programs is universal,” Daniel says. “What’s surprising is that 62 per cent were willing to raise their hand and say it’s a marketing scheme that actually pushes them to continue doing business with one brand over another.”

That compares to just 10 per cent who will admit traditional marketing, such as advertising in newspapers, flyers or on TV, influences their shopping pattern.

“Consumers told us they are particularly loyal to programs that make them feel special, offer non-monetary privileges for members only, and communicate often in ways that consumers find personally relevant and interesting, ” Daniel adds.

Surprisingly, nearly half of those surveyed said they would switch credit cards if it weren’t for the loyalty program.

That’s because points are now the most important factor in how people choose a credit card. Interest rates, card features and annual fees are way down on the list, Daniel says.

“If you’re one of the big six banks in Canada and you’re in the credit-card business, you’re really in the loyalty business, ” he says. “We’ve gotten to a state where loyalty programs on credit cards are the only differentiator that consumers can recognize.”

A survey by the Bank of Montreal found that travel is still the most popular redemption choice, with 60 per cent of collectors choosing this option.

Just over half plan to redeem for travel within two years. Flights outside North America are the most popular choice.

“People are getting more comfortable with the economic situation, and the Canadian dollar has held in to be pretty strong,” says David Heatherly, vice-president of payment products at the Bank of Montreal.

Canadians are also becoming more savvy in how they collect and use their points, says Patrick Sojka, founder of Rewards Canada, a website dedicated to providing information about loyalty programs.

He advises collectors to focus on a few programs, such as one travel, one hotel, and one shopping program, to make the most of their points.

“Then those reward flights, nights or merchandise will be within arm’s reach and you won’t be waiting years to get them,” he says.

That constant give-and-take is what helps cement the bond between the collector and the business, experts say.

“A loyalty program won’t make us buy something that is bad, but it will make us more loyal to a brand that we already like,” says Ken Wong, a marketing professor at Queen’s School of Business.

Loyalty programs are often perceived as being free because there is no upfront cost to signing up. But, as with any other marketing program, the cost is folded into the product price.

The difference is that loyalty programs tend to be very efficient because they target a company’s best customers, and those who have indicated they are willing to receive information about special offers, says Wong.

“When loyalty programs show they can be efficient, it allows the supplier to do a bit less marketing than they might otherwise have to do.”

Social media and mobile technology are the next frontier for points, experts say.

Seven-in-10 members say they would be willing to download a loyalty application on their phone that allows them to monitor, earn or use their points. More than half, 58 per cent, of smart-phone users surveyed said they had never downloaded a mobile app, but half of those folks said they would if it was related to a loyalty program.

However, companies also have to be aware of privacy issues, the survey found. Nearly half, 46 per cent, of respondents said the reason they’re wary of participating in more loyalty programs is they know the programs are watching their shopping behaviour and helping marketers tailor their message.

“That number is increasing, rather than decreasing, ” Daniel says. “Consumers need to know why you’re collecting the information, how you intend to use it and how you intend to store it safely and securely.”

CANADIANS REMAIN LOYAL

The Maritz Canada study on loyalty programs also found that: a 38 per cent of those surveyed will purchase a different brand than they normally use in order to maximize loyalty benefits. a 69 per cent said the programs are worth the effort of participating. a 45 per cent get a rush from watching loyalty program balances grow.

KEEPING TRACK

Having trouble keeping track of all your loyalty points?

Here are some online solutions suggested by Patrick Sojka, founder of Rewards Canada. AwardWallet.com: a free service that helps you manage reward balances and travel itineraries. It supports 482 loyalty programs, including most Canadian ones, and has more than 85,000 active members.

GoMiles.com: bills itself as the easiest and best way to manage your frequent-flyer miles. MileTracker.com: If you don’t like giving third-party websites access to your membership numbers and passwords, you can create a spreadsheet to help track your balances or download a program such as MileTracker.

Credit: MADHAVI ACHARYA-TOM YEW Toronto Star

 

Leave A Response »

css.php