Many Canadians feel rewards programs don't work

 

It seems like every store you go to these days, the cashier asks if you have a rewards membership.

Most of us probably don’t know if we signed up to this specific store’s membership program, so we usually just give them our email and see if anything comes up.

But, do these programs actually foster customer loyalty?

According to a recent report, apparently not.

The report, by KPMG Canada, has found that 60 per cent of people said points and rewards programs don’t do much to keep them loyal to a brand/retailer.

“Canadians told us they look for quality, consistency, value, and personalized service from their preferred brands and retailers,” Kostya Polyakov, Partner and National Industry Leader for KPMG’s Consumer and Retail group, said in a news release.

“A loyalty program is one lever in a company’s arsenal. It creates transactions, but it won’t make up for poor products or inferior customer service. Where it really matters is when the program helps you better understand your customers’ needs and expectations and provides you the information needed to drive tailored offers,” he continued.

According to the findings, 88 per cent of consumers defined loyalty as their likelihood to recommend a product to their friends and family, while 77 per cent defined it as the need to buy from a specific company.

Further, 74 per cent of respondents said product quality was the most important factor in their decision to stay loyal to a single brand, while 71 per cent said the most important factor was product consistency, and 60 per cent said it was value for money.

“We’re starting to see Canadians care deeply about ethical, sustainable practices,” Katie Bolla, a partner in KPMG’s Customer and Digital group, said in the same release.

“They want to shop with retailers who treat their employees well, who use real people in their ads, who have a strong environmental record. More and more, people are making values-based purchasing decisions. This is a trend retailers need to pay attention to,” she continued.

Moreover, Canadians aren’t easily enticed into buying things because of what other people recommend—only 14 per cent of Canadians said it was important for brands to be endorsed by their favourite influencers to stay loyal to them, while only 13 per cent said popularity of a brand on social media was important to their decision to support it or not—both below global averages.

As well, 57 per cent of Canadians said they expect to receive special treatment for being a loyal customer, and the same number of people said a strong personal connection to a company encourages them to stay loyal to it.

“The whole organization needs to work in lockstep in order to deliver a truly exceptional and seamless customer experience,” Bolla said.

“A loyalty program is only the first step to building a deeper, more meaningful and longer-term relationship with customers. Retailers risk missing the opportunity to convert transactions into points-free relationships so strong that even if the program disappears, customers will still come back. That’s true loyalty,” she added.

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