With inflation, 80% of Canadians have seen their purchasing power decline1. To save money they are turning more to loyalty programs.
It is impossible to ignore the fact that Canadians are dealing with inflation everywhere – at the grocery store, at the gas station, in stores, etc. Never has the pursuit of savings been so present in conversations, in the headlines and… through the use of loyalty programs.
In our latest LoyalT study1, our team, which combines the expertise of R3 Marketing and Adviso, focused on how inflation is changing the way Canadians behave.
Looking for savings
Half of Canadians have increased their use of loyalty programs in the past 12 months. Two-thirds say the programs save them money.
To save even more, over a quarter (26.5%) of members buy products that help maximize their rewards. This represents a three-point percentage increase from 2021.
To retain members during inflation, a loyalty program must be generous. It must clearly show them how they can save.
In times of inflation, it is essential to adapt your marketing strategy, and SEO proves to be a valuable ally.
Low generosity, compromised loyalty
As shown in the 2021 study2, a program perceived generosity is strongly linked to its ability to change the purchasing behaviour of members by increasing the number of shopping visits and annual purchases.
Perceived generosity: The perceived generosity relates to a member’s ability to earn points in different ways (promotions, customized offers, engagement through the mobile app, contest, reviews, etc.), and not only on the total purchases (base rewards).
This year, LoyalT shows that this habit remains just as important in an inflationary context. Consumers are looking for generous offers and do not hesitate to leave a program if they do not receive these types of offers. Over the last year, nearly one in two members (45%) say they dropped out of a loyalty program they perceived as not generous enough. This trend is particularly evident among young people aged 18 to 34 (53%), who will leave a not so generous program.
Moreover, if a competitor’s program in the same business sector became more generous, 69% of Canadian program members would not hesitate to switch. Once again, this percentage increases among the 18–34 age group (72%).
Recommendations
- Measure the perceived generosity of your program compared to your key competitors’ programs.
- Identify your program marketing activities that help maximize this perception of generosity.
- Ask your customers about their preferred manner to be rewarded.
- Identify your most price-sensitive customers and create for them outstanding personalized offers.
- Educate members on the best ways to save money with your program.
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Is your program generous enough? Let’s evaluate it together.
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