Hyper-personalization, the fuel driving c-gas loyalty programs

Canadians are living in a time of plenty when it comes to loyalty programs. While there is no exact figure as to how many loyalty programs there are in Canada, recent studies suggest Canadians are members of 85-plus loyalty programs. 

Over 90% of Canadian businesses offer some kind of loyalty program, with the most popular being PC Optimum, Aeroplan, Scene+, Canadian Tire’s Triangle Rewards and Tims Reward from Tim Hortons. Dozens more are coming online in the new year, not including the programs offered by smaller, independent retailers for things such as car washes, gasoline purchases or goods purchased in their stores. 

With so many programs on offer, what is it that will keep a customer in a program and using it often? Hans Laroche, senior consultant, relationship marketing and loyalty with Montreal-based consulting firm Adviso, says a recent LoyaIT study—where the company takes a deep-dive into Canada’s loyalty program usage and landscape—found Canadians are members of an average 14.3 loyalty programs, but only actively use 7.3 on consistently.

Of those seven programs, over 65% say they are always using or mostly using one of those loyalty programs, and within those that are frequently used, one-in-two members say they go more often to the same retailers and focus their purchases within a loyalty program.

“47% of Canadian program members say they go more often to the same retailer and 50% say they concentrate their purchases within a program. These numbers show an increase of two to four percentage points respectively vs. 2021,” the study notes. 

So, what is it that keeps someone coming back to a loyalty program? The most common answer many would give is the ability to collect and redeem points for a future purchase or to get a discount. That certainly was the case some years ago and many programs continue to operate that way to this day. 

Laroche says that kind of program is becoming less appealing to customers, and programs that continue to operate that way have less of a chance of keeping customers over the long term. Instead, what has been happening over the last few years are programs moving toward direct engagement with loyalty program members. 

“Over the last five years I have seen a move away from loyalty programs that are about giving points,” says Laroche. “That is points around purchases or number of transactions. Now, it’s more geared towards creating engagement, more about personalization and direct communications and offers on specific items that you may wish to buy.” 

He gives the example of Société des alcools du Québec (SAQ), which sends out its newsletter to 1.5 million loyalty program members each week. The newsletter is not a generic one-size-fits-all email. 

“It is highly personalized,” he adds. “No one has the same newsletter, the same offer, the same content. It is now about engagement, of providing the right content for the right audience and segmenting that content and offering to reach the right person in a way that is meaningful for them. We have gone from what was common a few years ago, in which a company would send out three or four different newsletters based on three or four segments, to now sending out hundreds of thousands of personalized communications.” 

This personalization makes a loyalty program more meaningful and useful for members and allows companies to begin tailoring programs and offers to be more directly tied to individual users and their purchasing decisions. This is especially important to generation Z members of loyalty programs, who place a high preference on personalization. 

“If content is not personalized, if they don’t see value in the communications or offers coming to them, they will opt out of the program very quickly,” Laroche adds.