As more loyalty programs pop up, customers want access and tangibility: expert

CTV News

6 days ago

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An increasing amount of Canadian companies are creating loyalty programs to retain customers and grow market share, and while each new program offers unique perks and benefits, consumers gravitate more towards certain ones.
That's according to a recent report from Toronto-based customer engagement agency Bond Brand Loyalty, which examined consumer trends and gathered data from across more than a dozen market segments.
'A lot of programs have come to market in the last little while as brands have faced the circumstances of the market,' Sean Claessen, Bond's chief strategy officer, told BNN Bloomberg in a Monday interview.
'Leaders have said being close to customers is better, that's a safer place to be to understand their new needs or changing needs, and so loyalty programs historically have been one of the ways that a lot of marketers have tried to get closer to customers to understand those things.'
Claessen said Canadian customers are keen to join almost any loyalty program that's offered to them; however, they typically are only active in about half of the programs they are part of.
'Customers raise their hands for all of the programs, but the ones that truly engage them and that pay off the effort that's required and afford them the things and the spending power that comes with those delayed dividends… that tends to be the ones that people stay active in,' he said.
In the current economic environment, Canadian shoppers value tangibility, Claessen explained, and the ability to use things like loyalty points on day-to-day purchases, rather than just accumulating them over time.
Claessen noted that Bond has been collecting customer preference data for more than a decade, and its 2025 'Loyalty Report' represents the first time that access took the top spot when it came to what consumers valued in a rewards program.
'Access has become the top driver in what satisfies Canadians with these programs… being first to know, getting a last call on a product that is going out of stock, anything that is sort of afforded to you by being a part of the club,' he said.
'That kind of mechanic in loyalty performs really, really well… that edge as a customer that makes you feel like it matters that I'm a customer, I'm getting that reciprocal benefit from the company.'
Critics of loyalty programs have pointed to the collection of customer data as a downside to joining, as many companies require members to provide an email address, home address, phone number or more.
But Claessen said that's becoming less of an issue for customers. According to Bond's report, 64 per cent of customers are comfortable sharing their data with a company in return for the benefits they prefer.
'Less and less consumers are worried about that, in fact, a lot of the data we use to determine what are good programs and how do they operate is customers volunteering their purchase data, the receipt data… that is part of a lot of linked loyalty programs lately,' he said.
'And that seems to be going swimmingly for all involved; for customers they report higher satisfaction, likelihood to stay with the brand, every metric that you would expect as a business goes up and there's sort of a win-win-win in that situation.'
Based on Bond's findings in its 2025 report and in previous years, it's clear that loyalty programs do pay off for the companies that invest in them – as long as they're designed and managed well, said Claessen.
'A well-designed program that's properly managed is all incremental, so as you would compare it to non-loyalty participating customers, the results would be clearly in favour of customers who are receiving these offers and getting these perks and benefits,' he said.
'They tend to consolidate their shopping if it's a fragmented category with the kinds of brands who are offering them those programs.'