This need to innovate is motivated partly by an increasingly competitive loyalty market. Canada is second only to the UK as the most mature and most popular loyalty market in the world, and so companies must work harder to engage consumers who are increasingly savvy about the benefits of loyalty programs.

Being choosy about which cards to sign up for ensures that you will find a program that is right for you and your lifestyle.

Consumer loyalty smarts are revealed in a new study, The 2013 COLLOQUY Loyalty Census, which reports that the number of loyalty programs that the average Canadian household belongs to has dropped almost 11 percent from 2010 to 2012. This decrease tells us that households are consolidating programs, partly because consumers are concentrating on the programs that deliver the most value, and partly just because many loyalty programs are underwhelming their customers.

Trend trackers

As a result, forward-thinking companies are now trying to “wow” consumers, and Canadians can expect their loyalty programs to improve.

For example, Loblaws, Canada’s largest grocer, recently launched a program that individually tailors promotions based on personal shopping histories. This personalization means more discounts for items that customers can really use. Loblaws does this by tracking trends in buying habits, and using that information to offer recommendations and discounts, based on what customers with similar tastes have tried. The program will even create a grocery list and send out recipes based on current promotions. The idea is to make shopping easier and more personal with the new program.

Star treatment

Another example is the Star Challenge program. Though the program itself is not new, the novel twist is in its new online components. Members can now earn “stars” by shopping and interacting through Facebook and Twitter. They can also earn online by posting videos, answering trivia questions and getting friends to register. Whereas the Star Challenge program used to be more of a discount club, users are now beginning to see it also as a game and an online community all rolled into one.

Selection points

As this new wave of loyalty innovation hits, what can consumers do to find the best fit? To find the right program that won’t underwhelm you or feel impersonal, there are four points to evaluate in the next generation of loyalty programs:

  1. Learn how the program works. Do you get points for purchases? How soon can you redeem points? You can save a lot of frustration simply by taking a moment to ensure that the program fits your overall lifestyle.
  2. Know how to check your status. You can usually check point balances, the rewards you’ve earned or your overall status (such as being an elite member) online or through a smartphone app. Regularly track your status so you will know what you’ve earned and how you can receive it.
  3. Ask about privacy. The best programs seek to learn more about you in order to customize special offers; but that learning should be on your terms. Understand each program’s privacy policy, so that you can opt in or opt out of text messages and other types of communications. 
  4. Look for social awareness. Aiming for the social good is important, and more and more programs are exploring ways to improve the world. Does the program donate to an animal shelter? Require that merchants engage in fair trade? Support local businesses? Contributing to the social good has never been easier, so why not?

Although Canadians love loyalty programs, consumers are being choosier about which cards they sign up for. Use this selectivity to your advantage: Being choosy ensures that you will find a program that is right for you and your lifestyle. This will encourage businesses to innovate in ways that benefit members the most.

editorial@mediaplanet.com