Canadians flock to loyalty programs

August 21, 2009
AUG. 21, 2009 – Finding Canadian consumers that don’t participate in loyalty programs is getting tougher - a near universal 93.6% said they belong to at least one program, according to COLLOQUY research released today. The number reflects a 9% participation growth by the general population since 2007.

Activity across all demographic segments is up, except for the Affluent segment, which remained flat at 96 per cent participation. Participation by Millennials (age 18-25) spiked to 86.5 per cent, up 11 per cent since last measured in 2007 to represent the fastest growing demographic. Women and seniors nudged up slightly, and consumers in French Quebec measured for the first time at 92.4 per cent participation.

Loyalty marketing programs recognize and reward the best customers of a business. COLLOQUY’s study of loyalty perceptions examined trends in six consumer segments: General Population representing a statistically distributed sample of Canada overall; Affluent (heads of household with annual incomes of $125,000 or greater); Millennials or Young Adults (any respondent 18 to 25 years of age); Seniors (any respondent 60 years or older); Core Women (any female respondent age 25 to 49 with an annual income between $50,000 and $125,000); and French Quebec (those residing in French Quebec). COLLOQUY magazine and white papers are published
by LoyaltyOne.

Coalition loyalty programs, like AIR MILES in Canada, Dotz in Brazil and Fly Buys in Australia and New Zealand are proving vital tools for consumers looking stretch household budgets in response to a challenging economy. Exactly 25.8 per cent of survey respondents said that participation in coalition
programs has become “more important” since the economy turned sour. Consumers found the value of coalition program participation in a recession higher than retail, financial services and travel rewards programs.

“We were already aware that Canada was a congested loyalty arena,” said COLLOQUY Editorial Director Rick Ferguson. “But to see a nearly 10 per cent jump in such a market says that consumers are turning to rewards programs more than ever to offset economic woes. And the value of coalition programs in the eyes of Canadian consumers cannot be understated.”  

Loyalty participation by Millennials has grown faster than any other demographic since COLLOQUY’s last benchmarking study in 2007. As mentioned above, participation rates in this demographic stand at 86.5, an 11 per cent increase from two years ago. Comparatively, the same demographic in the United States reports a 58 per cent participation rate. 

The data reveals more intriguing information about this group and their perceptions about loyalty programs, including:

• Millennials lead all demographics in their views on the importance of coalition rewards programs during an economic downturn. Over one-third, or 35%, find coalition programs more important due to the recession.

• Millennials are the most likely group to shift their rewards redemptions to necessities due to the economy. More than 20 per cent said that they shift from using points for luxuries or a saving strategy to necessities. 

“Loyalty marketers have a once-in-a-lifetime opportunity to demonstrate program value to this next generation of consumers. Proving a value proposition in a time when the group needs it the most could prove priceless in fostering lifelong advocates,” added COLLOQUY Partner Kelly Hlavinka.

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