Do you know how many loyalty cards I have in my wallet right now? 11. And I just signed up for one more, so make that 12. I’m a walking Canadian consumer stereotype: we love our loyalty programs.
Don’t believe me? Here are some statistics outside of my personal collection of plastic rewards cards:
- The average Canadian is a member of 8.2 loyalty programs per household, or 4 cards in each wallet.
- 90% of Canadians (that’s 22 million Canadians) have at least one loyalty card.
- Customers buy more when they have a loyalty card: up to 40% more at retail outlets.
- Air Miles has the most penetration in the Canadian market with its loyalty program tapping into 2/3 of Canadian households.
So why are loyalty programs so popular? Loyalty programs needs to be seen from both the consumer and business perspective.
The consumer typically loves a loyalty program because of the incentives often tied to it. With Air Miles, they aim to be distinctive in what can definitely be thought of as an over saturated Canadian loyalty market: Air Miles looks to provide points collectors with an emotionally engaging experience in the redemption process.
For the business, loyalty programs provide new and exciting layers of data beyond the one-dimensional transaction. Without a loyalty card, you get maybe an average cart size. Add a loyalty program, and all of a sudden you know who the customer is: their name, address, email, phone number, sex, and so on. Even better: you know what the customer bought, when they bought it, and how frequently they buy it. Imagine what you could do with that kind of data at your fingertips!
The Canadian loyalty program market is over saturated, which means your program needs to stand out from the crowd.
But it’s not as simple as just printing out 1,000 cards to hand out to your customers where you can stamp it each time they make a purchase. Again, the Canadian loyalty program market is over saturated, which means your program needs to stand out from the crowd! And to make it the most value for your business, you need to be tracking the data behind the loyalty program. So forget the stamp card – that’s severely underusing the potential behind a loyalty program.
- Keep it digital. Tie the program to your back end analytics so that you get the most value out of the program.
- Think it through. Don’t forget to plan the strategy for the long-term of your loyalty program.
- Make it fit your customers’ needs. If I’m going to sign up for a grocery loyalty program, don’t give me 10% off for sunglasses. Give me a discount of my groceries!
- Think about the format. Is the loyalty going to be buy 9, get the 10th free? A percentage off of each purchase? Again, keep your customers’ values in mind, and tailor the program to fit their needs.
Now get out there and generate some loyalty!