Most Canadian consumers (86%) identify themselves as participants in loyalty marketing programmes - some 51% more than their US counterparts - according to a study by loyalty marketing experts at Colloquy.
The study involved a demographic analysis that featured research on the loyalty participation and perceptions of Canadians in key market segments. When examined by demographic segment, loyalty programme participation among Canadian consumers ranked as follows:
- Affluent 96%;
- Core women 95%;
- Seniors 90%;
- General Adult (control group) 86%;
- Young Adult 78%.
Contrast with the US
However, a recent US market loyalty demographics survey published by Colloquy found that only 57% of the General Adult segment identified themselves as loyalty programme participants.
"Coalition loyalty marketing in Canada is the difference maker," explained Kelly Hlavinka, Colloquy director and co-author of the Canadian loyalty study. "Canada's loyalty landscape is heavily influenced by the presence of the Air Miles Rewards Programme, a national loyalty coalition that accounts for a 70% penetration level among the nation's households. No such national coalition exists in the United States."
The US market is characterised by a more fragmented national brand presence in key loyalty sectors such as grocery, retail fuel and banking, Hlavinka noted, and the result is a greater concentration of market share among major Canadian brands than is found in the US market.
Some of the key contrasts between Canadian and U.S. loyalty programme participation habits were found to include the following:
- Canadian consumers are more active in loyalty programmes. Approximately 75% of Canadian consumers actively participate in loyalty programmes, compared to only 39.5% in the US.
- Canadian consumers belong to an average of 2.5 retail programmes, 2.0 financial programmes and 1.5 travel programmes.
- Canadian consumers are more patient. They're more willing to accumulate points and miles that yield free travel, in-store merchandise or free reward catalogue redemptions. General Adult respondents said that 69% of the programmes they participate in offer points, as opposed to only 39% for Americans of the same group. Conversely, U.S. consumers remain hungry for cash-back programmes, citing almost 55% of the programmes they belong to offering cash-back rewards.
- Canadians are more generous. With the exception of Young Adults, they're about twice as likely as US consumers to redeem a reward for someone other than themselves. While US redemption statistics point to self-gratification, Canadians are likely to share rewards with friends and family.
- Canadian consumers are more savvy loyalty players than their US neighbours. Canadians are more likely to belong to and participate in competing programmes. Marketers are therefore pressured to create unique, differentiated offerings for the discriminating Canadian loyalty audience.
- Canadian financial and travel programmes lag behind their US counterparts. General Adult redeemers said they burned their points an average of one time in the past year for credit card and other financial services programmes and an average of less than once for travel programmes - considerably below redemption averages reported for US consumers.
- Canadian Affluent consumers are approaching universal loyalty programme participation rates, with 96% of respondents participating in at least one loyalty programme. This is an over-saturated market, and growth rates are expected to slow.
- Surprisingly, Young Adults do not engage with loyalty programmes through electronic channels more than direct channels. Young Adults ranked lowest of the five segments (26%) when asked if they were engaged in receiving special offers via email. Core Women led the way, with 40% claiming extreme involvement with loyalty programmes via email.
- Canadian Women participate at a level of 61% in travel programmes and 45% in financial programmes, but these rates lag significantly below participation of the Affluent group. The gap presents Canadian marketers an opportunity in both sectors.
- Retail is driving loyalty in Canada. Comparing redemptions in the financial and travel sectors to those in retail, retail programmes are providing the most rewards to members regardless of demographic segment.
- Canadian Women reported the greatest gap between their desire for the special access and member-only privileges associated with loyalty offers and the actual delivery of these "soft benefits" by loyalty programmes.
- Young Adults, at 48.4%, are the most likely Canadians to recommend a business due to its loyalty programme.
- Only 38% of Canadians read their loyalty programme statements.
The demographic segments studied were defined as:
- General Adult: The control group;
- Affluent: Heads of households with annual income of US$125,000 or more;
- Young Adults: Respondents aged 18 to 25;
- Seniors: Respondent aged 60 or older;
- Core women: Female respondents aged 25 to 59 with annual income between US$50,000 and US$125,000.
The findings of the new survey are presented in Colloquy's latest white paper, entitled 'The Canadian Difference: A Comparison of Loyalty Marketing Perceptions Among Specific Canadian Consumer Segments'. The white paper has been made available for free download from Colloquy's web site - click here (free registration required).
Editor's note: Colloquy belongs to the family of Alliance Data Loyalty Services companies that also includes the Air Miles Rewards Programme.