Are Canadians Loving Loyalty Programs?

We’ve spoken at length in the past about loyalty programs and the debate that continues regarding their success in Canada. Some days we hear that Canadians are all about their loyalty programs, and that often these help motivate their decisions about where to shop. Other days we hear that Canadians are members of so many loyalty programs that these actually have no real impact on loyalty at all. So, what’s the truth?

Despite rumours suggesting loyalty programs are failing, research, in many cases, has shown the opposite. According to a recent Money Sense article, loyalty programs are still holding strong, and with significant influence: “Consumers openly admit that rewards plans affect their behaviour, says Daniel at Bond Brand Loyalty, a company that helps brands optimize their loyalty programs. More than three quarters of consumers say they are more likely to do business with brands because of loyalty programs. Two-thirds of consumers say they modify when and where they make purchases to maximize their loyalty rewards. And nearly 60% will alter how much they spend to maximize points.”

That being said, coalition programs, such as the continuously criticized Air Miles, don’t seem to fare as well as those programs offering cash and merchandise. Still, those are big numbers.

What’s even more surprising is that this loyalty to loyalty cards continues as frustrations with certain card limitations and numerous data breaches plague the industry. Still, as the Financial Post notes, “more than nine out of 10 Canadian consumers participate in at least one loyalty program.”

Nordstrom has just recently dismissed the argument that loyalty rewards don’t work and entered the Canadian loyalty playing field. Back in May, they announced that they would be offering their loyalty program to Canadians, giving Canadian shoppers the chance to earn points through purchases made with their Nordstrom Rewards Visa.

So, while evidence suggests most loyalty cards are valuable to retailers looking to boost sales, what sets those successful programs apart? It seems that a well-functioning program is the most likely to receive favourable results. According to Strategy, while 77% of consumers say they are more likely to do business with a brand with an effective program, “only 18% of Canadian consumers say their programs improve their experience with a brand, and only 12% believe their experience with a brand is better than consumers who aren’t a member of its loyalty program. Only 26% of respondents said they are very satisfied with their program’s customer support and 14% with the level of personalization offered, although both of those numbers are up slightly from last year’s report.”

Clearly, putting some effort into ensuring your loyalty program runs smoothly can significantly boost overall results.

Of course, even with an efficient, well-run loyalty program, in-store service is still a major factor.

At Storesupport, our goal is to help you bring all of your merchandising plans in line. Visit us online today to find out how we can help you boost brand loyalty: www.storesupport.ca.

Sources:
http://www.newswire.ca/news-releases/nordstrom-expands-loyalty-program-in-canada-with-launch-of-nordstrom-rewards-visa-credit-card-622293793.html
http://www.moneysense.ca/spend/credit-cards/is-a-loyalty-program-war-on-the-way/
http://business.financialpost.com/news/retail-marketing/canadians-just-cant-seem-to-quit-loyalty-cards-despite-all-of-the-data-breaches-and-pr-headaches
http://strategyonline.ca/2017/05/24/is-your-loyalty-program-satisfying-your-customers/
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