No other nation in the world loves its loyalty points as much as Canadians do. Almost all of us belong to multiple loyalty programs that could earn us free travel or other rewards over time. Up until recently, the main mission of loyalty points was to influence our behaviour as consumers — to get us to favour a specific retailer or to spend more on different products and services — but now Canadians are also able to earn more of their favourite loyalty points just for learning how to live better and healthier lives.

Carrot Rewards, the world’s first national wellness rewards platform, is a free app that offers Canadians their favourite everyday points — like SCENE, Aeroplan Miles, Petro-Points, and others — for letting it nudge users toward living better. It starts by offering a generous bunch of points for downloading it onto phones. Immediately after that it offers additional points for referring it to friends. Every referral earns the user the same number of points as the original download reward. With each completed task, such as watching a wellness promotional video, taking an informative quiz or achieving daily step targets, users collect more points. On a user’s first day with the app they can easily earn well over a thousand SCENE points.

The app was developed by Toronto-based Carrot Insights in partnership with the Public Health Agency of Canada, other government bodies, and a coalition of loyalty partners and health charities. This unique and broad ecosystem represents a very interesting and innovative approach for government agencies in our country, as they keep up with the shift of our population’s attention away from traditional advertising and much more toward our smart phones. It harnesses our two biggest social addictions today — smart phones and loyalty points — and captures our attention much more effectively than before.

The app’s conversion rate — the number of users who act on the information they receive — is an astounding 70 percent. Compare that with the “gold standard” of traditional, direct-marketing campaigns — which would typically be around the one percent mark, according to Carrot Insights — and it quickly becomes obvious why this app is truly game-changing.

Canada’s captive market

Carrot Rewards has proven to be a fit for Canada’s incredibly loyalty-responsive culture. Today, just a short year after the app was launched in just one corner of the country, more than 350,000 Canadians (fully one percent of the country’s total population) are active users of the Carrot app. In the three provinces where the app is now available — British Columbia, Newfoundland, and Ontario — the penetration is as high as five percent. In the hundred days since the app was introduced in Ontario, earlier this spring, it has already attracted an almost unbelievable 200,000 users.

The folks at Carrot Insights are not at all surprised by this success and they credit Canadians’ national “addiction” to points: more than 9 out of 10 consumers in Canada participate in at least one loyalty program, according to a recent report by Brandspark International, a market research firm. The average Canadian has four loyalty program cards in his or her wallet.

Trophy value used to nudge user behaviour

Another factor contributing to the app’s unique popularity is the gratification consumers derive from being rewarded with points instead of cash or discounts — the so-called trophy value. “Cash just blends into your wallet and is unremarkable, but points are special. You remember how you earned them long after you’ve achieved a reward goal, like a free movie or flight,” says Carrot Insights CEO Andreas Souvaliotis.

“The Carrot Rewards app uses these points to nudge the user toward a healthier lifestyle,” says Colin Andersen, Carrot Insights’ Executive Advisor. He adds that, according to a behavioural science concept called nudge theory, positive reinforcement can influence a person’s decision-making.

Sweeping the nation

Carrot Rewards is now expanding its focus to include financial, environmental, and civic literacy. “Wellness is made up of a number of interconnected components, not just simple diet and physical activity,” says Souvaliotis. “We aim to encourage and reward ‘wellness’ in the broadest sense of the word.”

Carrot Insights plans to involve more partners in the app’s rapidly broadening eco-system, particularly private sector organizations whose public influence missions may align well with the mission of Carrot’s original government partners. The app is gradually being rolled out through more provinces across the country, and the company is now confidently predicting it will have a million active users by the end of this year.

The next frontier, of course, will be to take this unique made-in-Canada success to other countries, particularly those that are similar to Canada in terms of their focus on public wellness and also in terms of the popularity of loyalty points. The UK, Germany, India, and Australia are among the first few that Carrot is currently exploring.

“For years, loyalty reward points have been used only to boost retail activity,” says Souvaliotis. “But with this app we have found a way to harness their immense popularity to also make the world a better place.”