THE FUTURE OF LOYALTY PROGRAMS IN CANADA
A strong loyalty program can build brand awareness and recognition, which ultimately leads to customer acquisition. Mediaplanet interviewed Aimia’s Chief Marketing Officer, John Boynton, to find out how to create a successful loyalty program.
Mediaplanet How do brands create customer loyalty?
John Boynton Today’s customers expect tailored and relevant experiences. To meet their expectations and maintain their loyalty, companies need to focus on personalizing the value proposition.
Marketers can do this by using data and customer insights intelligently to offer personalized and relevant experiences and perks their customers actually care about. In turn, customers will see value in continuing to engage with companies that understand and anticipate their needs.
However, mapping customer journeys, understanding behaviour, catering to expectations, and ensuring seamless, streamlined experiences across all channels are all complex challenges that we and our partners face every day. The brands that have it right can inspire true loyalty.
MP Does data collection play a role in the creation of the loyalty program?
JB Yes, and a very important one. We live in a world driven by data, and this is especially true in the world of marketing. The data value exchange should be the backbone of any loyalty program.
At the same time, Canadians are becoming increasingly aware of the value of their personal data. So when they share their data with brands, they have increasingly high expectations. We invest a lot in research to follow these trends. According to the Aimia Loyalty Lens study, 41 percent of Canadians highly value their data, and 6 in 10 consumers expect better experiences with companies who they know hold their data. Companies need to pay attention to consumers’ growing expectations, lest they risk consumers turning off the tap of data and taking their business elsewhere.
In that context, loyalty programs are amongst the most tangible and voluntary means for consumers to get value for their data. Good loyalty programs leverage data collected from customer interactions to develop a deeper understanding of customers. Armed with this insight, they can personalize offers and interactions that both react to customers’ behaviours (eg. what they’re doing and what they want) and anticipate what they may do or want in the future.
MP Does customer experience factor in the creation of a loyalty program?
JB Yes. Loyalty programs should always have a customer-first approach in order to properly engage with customers and improve their experiences. Good loyalty programs aggregate the right data from multiple channels to produce a holistic view of the customer journey, quality of experience, and customer expectations.
And different programs provide different experiences to consumers. Retail rewards programs like Shoppers’ Optimum, for example, offer discounts and options that appeal to people looking for day-today savings. Travel programs such as Aeroplan are tailored for people who want to travel, which otherwise they might not be able to afford.
As part of the customer experience, a loyalty program should be a companion to the customer, guiding them and providing offers, content, and advice that are actually relevant and unique to them. For example, to better understand what Aeroplan members want to do with their miles, we launched a goal-setting functionality on the Aeroplan website and app. When members enter their goals, we use the information to better tailor their experience in the program by providing custom-tailored offers or tips to help them accumulate more miles and make the most of the miles when redeeming.
MP Are there any misconceptions or myths surrounding loyalty programs in Canada?
JB There is a misconception that loyalty programs are all about rewarding purchases and that they provide less value to consumers than cash back and direct discounts.
However, this ignores the fact that for most loyalty programs, the value increases with engagement, so consumers have a direct influence in the value they get. Many programs provide ways to increase accumu
lation velocity: ie. opportunities for more engaged members to get more points or miles quickly.
At the other end of the spectrum there’s also a related misconception amongst some marketers that loyalty programs actually train customers to expect discounts and ultimately fail to engender loyalty.
A discount is just a discount, and those customers only attracted to discounts will always present a challenge for loyalty and retention, regardless of whether it’s through a loyalty program.
Good programs provide means for their customers to get more value from their engagement through a personalized experience and relationship, beyond being rewarded for repeat purchases or being encouraged to shop on discount. Customers see value in personalized recommendations and exclusive access to services, products, and events, for instance. Companies can use these perks to reward loyalty and engagement while avoiding the vicious cycle of endless discounting.
“LOYALTY PROGRAMS SHOULD ALWAYS HAVE A CUSTOMER-FIRST APPROACH.”