Building customer loyalty in Canada

Canadians love their loyalty programs. It’s a relationship that started in 1958 with the introduction of Canadian Tire money and has grown into a country of almost 130 million rewards memberships – and average of four per person, or eight per household.

KPMG’s The truth about customer loyalty report (2019) ranks Canadians as the world’s third most active users of loyalty programs (56%), behind only Australia (61%) and tying with Italy. By contrast, only 42% of U.S. consumers actively use loyalty programs. And much like consumers in the U.K. and Japan, only 34% of Canadians prefer to donate their unused points rather than redeem them on purchases. (The global average here is 52%.) It’s an interesting statistic, considering that Canadians are said to be sitting on roughly $16 billion worth of unredeemed points.

Another KPMG report (Redefining customer loyalty: Beyond the points) listed the key points that drive Canadian customer loyalty, including:

  • Product quality (74% of respondents),
  • Product consistency (71%), and
  • Value for money (60%).

Historically, 74% of Canadians tied brand loyalty with their participation in a loyalty program. But that is changing – nearly 60% of Canadians think it’s important for a company to be committed to sustainability and the environment, and 57% feel that a “strong personal connection with the company” will help retain their loyalty.

The best customer loyalty programs in Canada include cards such as PC Optimum (where shoppers can earn points at Loblaws-owned grocery stores, pharmacy chain, and gas stations) and travel rewards program Aeroplan. Other well-ranked loyalty programs include retail programs such as Hudson’s Bay Rewards and Indigo’s Plum Rewards.

Although rewards programs originally allowed retailers to gather data about their customers, that information is now being used to tailor offers to individual customers, thereby increasing the connection between the shopper and the brand.

The Government of Canada’s website has information outlining the different types of rewards programs for the country’s consumers. Brands entering the Canadian marketplace may consider a loyalty program as a means of attracting – and keeping – long-term customers.

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Photo courtesy Pexels

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