Articles

Why Loyalty Program Members are Unsung Heroes

With more than 89% of Canadians actively participating in loyalty programs, they are some of most savvy navigators of these programs in the world and are very pragmatic in how they collect and redeem their points and miles. They are also, whether they realize it or not, making a big contribution to the health of the Canadian economy.

Users of loyalty programs help to stimulate the economy in two main ways. The most obvious is through the purchases they make to accumulate points or miles, with many members choosing businesses that are partnered with their program and spending in ways that maximize the points they earn.

A second, less obvious stimulus happens when program members redeem for rewards. According to a recent study conducted for Aimia that focused on rewards credit card usage in Canada, cardholders usually redeem their points or miles to travel, treat themselves to something special, or get something they wouldn’t have otherwise.

Savvy, Sophisticated Shoppers

“Canadians are highly engaged with the loyalty programs they join and so good at negotiating them, they’re able to supplement their income by using their rewards to upgrade their vacations plans or home electronics,” said Chris Willoughby, General Manager, Member Marketing, Aeroplan.

Canadians who belong to loyalty programs are also savvy shoppers, Willougby said. They modify their shopping behaviour for everyday purchases and big-ticket items alike across the partner network to earn the most points or miles and get the biggest bang out of their membership.

Strong Use of Rewards Credit Cards

Aimia’s study found that two in three adults in Canada use a rewards credit card to help them maximize their accumulation of points every time they use their card to make a purchase. In fact, 10 per cent of Canadian credit card purchase volume flows through TD and CIBC Aeroplan cards.

The numbers related to rewards credit cards are significant. According to the Aimia study, 90 per cent of rewards credit cardholders use it as their primary card to pay for purchases, with 31 per cent spending $1,000 or more each month and a further 20 per cent spending between $500 and $999 monthly.

Travel and Treats

Willoughby says the fact that loyalty program members tend to use their miles or points to travel or to treat themselves with things they would not have bought otherwise, is good news for the travel, retail and luxury sectors in Canada.

“Loyalty programs motivate Canadians to earn and redeem miles and points, and are an incredibly powerful form of economic stimulus,” said Willoughby. “Reward choices are incentives for consumption, and every dollar spent provides a boost that will affect the rate of future economic growth over time.”