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Rewards Programs – What They Mean to Your Business

  • July 30th, 2013 at 3:10 pm
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  • Paul Schlosser
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Ever had enough Air Miles for a flight? Gimme a break – me neither!

Baby boomers changed the way we think about buying. Their buying power and buying savvy brought about a revolution in the quality of goods and the convenience of delivery. And think about it; the ultimate materialistic generation now demands to be rewarded for buying products and guess what, their kids do too! This change in consumer expectations does not need to be a burden, it can be a win-win and this is demonstrated by the sheer number of loyalty rewards programs in the market.

So what does that mean to your business?

New Customers are Overrated

Rewards programs typically target the most loyal of customers. According to Inc., it costs a business about 5-10 times more to acquire a new customer than it does to sell to an existing one. On average those current customers even spend 67% more than old ones. Retaining your core customer group is the key to financial sustainability. They are the bread and butter of every business and act as your ambassadors to new customers. Retailers should recognize them for their contribution and give them more reason to come back. Rewards may just be the edge needed to keep your customers from switching to the competition.


We always forget that there is more to business than just a transaction. Large rewards programs like Air Miles and Shoppers Optimum (not the “Buy 10 haircuts get the 11th free” type), require complete customer contact information. Access to this information opens up many avenues for future contact with customers. Unfortunately, this includes mailing lists and junk mail. While retail rewards programs have many other purposes, the greatest value that is created is the ability to identify individual customers and to measure and understand their distinct behaviours. Knowing who your customers are and how they think is step 1 for any marketer.

Will Your Program be the Popular Kid on the Block?

Lastly, switching back to the consumers’ perspective, remember that loyalty marketing is a two-way street, you must offer your customers some benefit in exchange for their willingness to identify themselves to you. Whether it is a tangible reward such as money back (Canadian Tire money), free goods and services or even if it plays off our innate desire to compete against each other (McDonalds Monopoly anyone?), there must be obvious advantages for signing up.

So what are the most popular rewards programs in Canada? How many of these popular rewards programs do you belong to? Sound off below!

Paul Schlosser

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