Growth in loyalty membership bounces back

There’s good news for loyalty marketers: Canadian consumers are showing renewed faith in loyalty programs.

The number of program enrollments grew 8.1% from 2012-2014, reversing a 0.6% decline from 2010-2012. The number of Canadian loyalty program memberships is now 129.73 million, up from 119.97 million in 2012.

The statistics are from the 2015 COLLOQUY Loyalty Census, which builds on COLLOQUY’s biennial census-taking of Canada’s loyalty industry since 2008.

We’re seeing the most activity among retail programs. With 62.1 million program members, retailers account for 48% of total Canadian loyalty program memberships. That’s up from 46% two years earlier. Retailers grew memberships by 12.3% -- the largest jump of any sector -- in the last two years. And numbers were up across the board: For the first time since COLLOQUY began tracking Canadian programs, membership numbers improved in every economic sector covered in the census (retail, financial services, coalition programs and travel/gaming/dining/entertainment/other).

All these signs of interest in loyalty programs bodes well for marketers. They are overtures by consumers who are open to making deeper commitments to their favorite companies.

But program numbers are only the first step. The size of a membership base isn’t the best indicator of whether a program is generating the kind of engagement that is the real goal of loyalty marketing. And more loyalty memberships overall presents challenges to every individual loyalty marketer. How will your program stand out amid the program noise vying for consumer attention?

Lots of companies are doing the right things to generate traction for their programs. Here are some observations:

  • Successful programs meet customers where they are. That means thinking bigger when it comes to mobile, integrating loyalty features into mobile and dumping mediocre, poor-performing apps. In the last few years, for instance, both PC Plus and Canadian Tire gave their programs appealing facelifts, and both have apps with high-value features: The PC Plus app lets customers get personalized points offers based on the items they buy most and lets them link to Passbook to enable scan and go, while Canadian Tire’s app gives members alerts when products on their shopping lists go on sale. These are examples of loyalty marketers looking at their program’s performance through the lens of evolving consumer expectations.
  • It pays to aggregate mobile data with loyalty and transactional data. Merging customer intelligence across databases allows companies to create a holistic view of customers and to truly personalize marketing messages and loyalty offers. Sephora’s To Go app creates an omnichannel shopping experience for Canadian customers, enabling members to receive limited-time deals, manage their reward accounts and view past purchases. Advances in customer experience -- facilitated by technology -- are what customers expect when they start sharing their personal data. Companies need to make the “I tell you about me, and you give me value for doing so” transaction pay off.
  • Smart marketers respond to changes in their overall industry’s demographics. Hotels have started tailoring customer experiences to engage different segments of travelers. In particular, hotel companies have taken notice that larger numbers of guests now fall between the ages of 18 and 36. That means increasing their digital offerings and allowing guests to book rooms using Twitter.

Competition is poised to get more intense, especially in the retail space. Target is leaving Canada, but US-based DSW and Nordstrom are both expanding their footprints here. Retailers can expect to see more program membership growth -- and competition -- from those two companies alone.  

The sheer volume of loyalty programs on the marketplace is beyond any marketer’s control. But how well a company’s own loyalty platform engages members, enhances the consumer experience and adapts to changing technology are issues that can be, and must be, front of mind.

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Tags: Loyalty Marketing