Consumers in the News:

Do you belong to a rewards program? It's likely you do, as Maritz Canada reports that 94% of Canadians belong to some type of loyalty program. We come second only to Brits, yet until recently not much was known in terms of how a subscription to a loyalty or rewards program affects Canadian consumer's spending habits. Maritz Canada recently completed a first of its kind, 75-page national study on members of loyalty programs with a focus on their influence on Canadian shopping behaviour, how and why one loyalty program is chosen over another, and what drives superior member engagement. The biggest shock of their research was how willing Canadian consumers are to admit that much of their shopping is motivated by incentive programs, and that they are willing to spend more if it means increased value or getting some back. Marketing Magazine has their own summary of the study's most important findings at http://www.marketingmag.ca/uncategorized/secrets-of-canadas-top-loyalty-programs-2-25684.

Among the most interesting and insightful findings of the consumer-based study is that loyalty programs are not a one-size fits all deal, and to be successful need to really get to know their customers, using consumer research to segment their membership and profile individual behaviour. This is crucial as it allows for personalized communication, showing members of rewards programs that the company is listening to them. Social media is one platform that allows these companies to do just that: listen to the customer, as they can monitor the instant feedback on sites like Twitter. Companies can use customer feedback to give the customers what they want, thereby improving their rewards or loyalty programs.

Knowing your customer well also allows you to measure their risk of attrition versus their future potential value to decide if that customer is worth being retained. If they are high value customers the company can again use personalized communication to try to engage them further. For example, members of Scotiabank’s Scene loyalty program who haven’t been to a movie theatre in a couple of months receive an e-mail offering extra reward points if they visit within a week or two of receiving the notice. This can re-engage inactive members. These efforts are not for nothing. Incentive programs and retention of existing customers can have a large effect on a company's bottom line.