Canadians are more likely to tie brand loyalty to rewards than the company’s commitment to sustainability and the environment, new KPMG survey finds
Canadians find greater value in their loyalty reward programs than the rest of the world and are far less likely to give them away to a charity, finds KPMG International’s recent The Truth about Customer Loyalty report.
Only about a third of Canadians (34 per cent) prefer to donate their loyalty rewards to a good cause rather than redeem them personally, compared to 52 per cent globally, the KPMG poll finds. Canada ties with the U.K. and Japan as the most likely to hang on to their points.
”Canadians love their reward points,” says Kostya Polyakov, Partner and Consumer and Retail National Leader, KPMG in Canada. “Retailers understand the value we place on these programs and how it affects the way we shop. Most recently, we’ve seen a number of strategic alliances in the loyalty space focused on using points to better attract and engage customers.
“While this is making reward catalogues more appealing for consumers, retailers face continued challenges in driving engagement.”
To kick off the holiday season, retailers typically use bonus miles or points to entice loyalty program members to shop on Black Friday and Cyber Monday.
“This is a wise strategy,” says Mr. Polyakov. “The KPMG survey found that most Canadians directly associate brand loyalty with rewards programs. As many as 75 per cent define loyalty as participating in a rewards program.”
But, while they may enjoy collecting points, they don’t seem to be in a rush to part with them. Canadians are sitting on about $16 billion in unredeemed loyalty programs, according to Bond Brand Loyalty statistics.
“It’s essential to understand what your customers find valuable in a loyalty rewards program and to deliver a redemption experience that’s one click, easy to use, and delivers value for points,” says Mr. Polyakov. “You are likely not really building the loyalty you want if your customers never see the rewards of shopping and collecting points with your company.”
While loyalty rewards programs in Canada have been around for several decades – Canadian Tire Money is the oldest – the ability to donate points to charities has gradually expanded over time, largely in response to consumer demand to donate in times of emergency or disaster relief efforts.
As well, some rewards programs offer limited choices of charitable organizations or link to ones affiliated with corporate sponsorships, which might not match up to consumer preferences. Recently, the establishment of #GivingTuesday, a global movement when charities, companies, and individuals rally for their favourite causes, has triggered shoppers to donate more. It immediately follows Black Friday/Cyber Monday, the busiest shopping days of the year.
“We’re seeing more and more programs encouraging and making it easier for customers to donate,” says Mr. Polyakov. “And, in the U.K., for example, we’ve seen fintech startups like For Good Causes emerge to connect companies, banks, charities, and customers to allow consumers to convert their unused points into cash donations to any registered U.K. charity.”
The customers most likely to donate their reward points are in: China (89 per cent), India (74 per cent), Thailand (70 per cent), and Mexico (64 per cent). Nearly half (46 per cent) of Americans also would choose to donate their points.
Globally, millennials are much more willing than any other generation to prefer donating their reward points, the survey showed. Almost two-thirds (61 per cent) of millennials prefer to donate their points, compared to Gen Z at 55 per cent, Gen X (48 per cent), Baby Boomers (40 per cent), and the Silent Generation (48 per cent).
This trend is similar in Canada, where two in five millennials (42 per cent) prefer donating their reward points, compared to 36 per cent of Gen Z, a third (32 per cent) of Gen X’ers, and a quarter (24 per cent) of Baby Boomers.
The global survey also sheds insight into how much a retailer’s commitment to sustainability and the environment matters to customers.
Only 29 per cent of Canadians consider this an important aspect of brand loyalty, versus 37 per cent globally. Further, only about one in seven Canadians (15 per cent) are faithful to a brand based on a company’s charitable or community giving, compared to 22 per cent globally.
Over 18,000 consumers in 20 countries were surveyed by KPMG on brand loyalty trends, including 876 consumers in Canada.
KPMG in Canada will publish an in-depth report on Canadian brand loyalty trends in January.
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