MOVING
PICTURES
The Future of Customer
Loyalty in Canada
INSIGHTS
By: Kevin O’Brien,
Chief Commercial Officer,
Aeroplan
Michael O’Sullivan,
President Proprietary Loyalty,
Canada
our insight
results delivered
your business
In 1881, forward-thinking Canadians set out a vision for the future of our country.
At Aimia, we have a vision for the future of customer loyalty in Canada.
aimia.com
© 2013 Aimia Inc. All Rights Reserved.
Moving Pictures / 1
EDITOR’S NOTE
In 2012, a monumental event occurred in
Canada, one that saw Canadians finally
embrace the destiny they had always been
told would come, but which never seemed
to arrive: Rush was finally inducted into
the Rock and Roll Hall of Fame. To this
American employee of a Canadian-based
company, this momentous event held
multiple meanings. There were fond
feelings for my colleagues and friends up
north, of course. And like most Generation
X males in North America, I’m a huge
Rush fan myself — and my inner rock fan
did cartwheels at the news. Inspired by
Kevin and Michael’s perspective, you may
forgive me for inserting a nod to the best
trio of all time in the title of this edition of
Insights.
But “Moving Pictures” is more than just
an inside joke for Rush fans. It’s also a
useful metaphor for the evolving landscape
of loyalty marketing in Canada. Until this
decade, Canadian loyalty marketers knew
where to go to capture a portrait of their
best customers: to reward program data.
Whether derived from a standalone singlebrand program, or from a multi-merchant
coalition program, loyalty data has long
served as the most valuable and reliable
source of consumer insight available.
Loyalty data is valuable because it’s fitted
for a purpose: the combination of
purchase, offer response, and redemption
data provides powerful insight into the
value and strength of your customer
relationships.
> Canadian marketers will increasingly be
But now we live in a data-driven world:
A world of volume, variety, and velocity,
in which large sets of unstructured data
from social media, mobile devices, and a
myriad of other sources threaten to crush
us under the weight of their own import.
Our challenge now is to understand
which other of these data sources can
complement loyalty data and add
additional insight into consumer behaviour.
But with so many data sources, platforms,
and channels now at our disposal, where
do we begin?
“data uniqueness” — rather than rush to
throw all your resources behind the shifting
sands of Big Data, we should instead focus
on data from those interactions most
predictive of customer relationship
strength. We don’t need to analyze all
data — just the right data.
Fortunately, veteran loyalty marketers
Kevin O’Brien and Michael O’Sullivan are on
the case. In this edition of Insights, O’Brien
and O’Sullivan focus on four central trends
that will influence the evolution of loyalty
marketing in Canada:
> The Canadian debt crunch will compel
consumers to tighten their belts, which
will force loyalty marketers to extract
additional value and relevance from their
reward programs;
forced to bridge the digital divide that
separates consumer expectations of a
seamless multichannel experience with
marketers’ abilities to deliver on these
expectations;
> The land rush to own a piece of the
mobile commerce space will force
merchants, banks, payment networks,
telecoms, and device manufacturers to
choose between two potential futures:
One in which competing systems increase
complexity and turn off consumers, or one
in which these systems are used to build
real relationships;
> And they also recommend a focus on
So while portraits of customer behaviour
used to be static, they’re now moving
targets which scroll into the past like social
media news feeds. Loyalty marketing offers
the best set of tools available for capturing
these moving pictures. And whether or not
you’re a Rush fan like me, you can still take
heart from the band’s induction into rock’s
most august body. It reminds us that hard
work, perseverance, and dedication to craft
can see any one of us realize our dreams.
If your dream is to build strong, profitable
relationships with your best customers,
then this edition of Insights may provide a
few useful rallying points.
- Rick Ferguson
Vice President, Knowledge Development
Table of Contents
2 Introduction: The Canadian Loyalty Landscape
3 Canadians and Rewards
4 The Digital Divide
5 The Data Conundrum
6 The Mobile Wallet Frontier
7 Canadians and Technology
8 The Importance of Data Uniqueness
9 Loyalty in Context
10 Conclusion: Tilt-Shift Marketing
11 Summations
12 About the Authors
© 2013 Aimia Inc. All Rights Reserved.
2 / Moving Pictures
INTRODUCTION: THE CANADIAN
LOYALTY LANDSCAPE
When it comes to loyalty programs,
Canadians have a clear understanding
of how to play the game. Marketers ask
consumers to voluntarily share information
in the form of personal, transactional,
or attitudinal data: In exchange for this
information, they place value on the table
in the form of rewards and recognition.
The power of this value exchange has
seen Canada become one of the most
mature loyalty markets in the world, with
Canadians of all demographic stripes active
and engaged in loyalty. But customer
behaviour in Canada is changing — and
to succeed, loyalty marketers will have
to change as well. Even as our ability
to capture a more complete picture of
a customer’s behaviour has improved,
customers themselves have become a
moving target.
While the tools available to loyalty marketers
have become more powerful, and the data
sources have become correspondingly
richer, consumers have also become savvier.
In this new world of empowered Canadian
consumers, loyalty marketers will have to
evolve. To succeed, we must account for
the unique characteristics that distinguish
Canada from other mature markets:
Canadian household debt is rising.
Canadian consumers are dealing with
rising levels of debt. In its June 2012 report,
Statistics Canada estimates household
debt currently at more than 152 percent
of disposable income. In comparison,
household debt-to-income ratios in the
United States topped out in the last
decade at 130 percent.
For loyalty marketers, this reality means
increased pressure on reward programs to
deliver tangible benefits. For example, our
2011 survey of 2,000 Canadian consumers
revealed that, when asked what program
rewards they find most appealing, many
Canadians indicate a preference for cash
back. Canadians also demand immediate
reward value: Younger Millennial consumers
are more likely than their counterparts in
either the United Kingdom or the United
States to expect to earn a reward quickly —
within the first month of joining (see the
illustration on the opposite page for
details).
But marketers who default to cash-back or
low-value rewards may miss an opportunity
to build relationship value. For example,
among Canadian premium credit card
programs, the market leaders still focus
on travel rewards. The demanding, instant
gratification nature of the next generation
of Canadian consumers therefore requires
a dynamic, flexible reward strategy that
motivates profitable behaviour shifts.
Canada leads in loyalty participation.
Canada is unique in that our market
supports two mature national coalition
programs, as well as a rich marketplace of
proprietary programs. These include the
coalition loyalty model, in which multiple
brands unite under a single program brand
to facilitate increased earning velocity.
Coalition programs create enhanced
customer insights that are driven by multiple
data sources. They are quite powerful – and
coalitions such as Aeroplan and Air Miles
have educated consumers about the value
of loyalty programs. The single-brand
proprietary program model, meanwhile,
offers direct control over the program’s
© 2013 Aimia Inc. All Rights Reserved.
value proposition, allowing you
to more readily adapt the program to
changing business requirements.
This marketplace coexistence of loyalty
models provides great value for consumers,
but requires difficult choices for marketers.
In some cases, your choice of loyalty model
may be constrained by category or regional
exclusivity agreements, which often means
the first brand to partner with the loyalty
marketing operator blocks future entrants.
The saturation of loyalty programs in
Canada requires marketers to give special
consideration to program structure. The
good news is that coalitions and private
programs can often complement each other.
For instance, Aeroplan traditionally reaches
your affluent customers, while a coexisting
proprietary program can help you reach the
remaining 80 percent of your base. Flexible
currency models, which allow for the
co-earning or exchange of coalition and
proprietary currency within your member
base, have also helped both models to
thrive.
Canadians demand value and relevance.
The changing Canadian consumer
landscape also requires loyalty marketers
to evolve their programs beyond a onesize-fits-all approach to reward funding.
Rather than wielding promotional currency
as a hammer by rewarding every customer
with a point per dollar spent, deploy
currency as a scalpel. Credit high value
customers with a higher base funding rate,
for example, or reward bonus points to
high-potential customers who might shift
spend to you.
To deploy currency effectively and extract
maximum impact from your reward dollars,
you must invest in customer segmentation
and analytics. Effective loyalty analytics
allows you to reward customers based on a
wide variety of attributes: spend, potential,
likelihood to churn, or even likelihood to
recommend. Through deep analytical
insight, you can design offers and rewards
that appeal to individual segments — or
individual customers.
Canadian loyalty marketers operate in
arguably the toughest and most saturated
market in the world, and the changing
behaviours of the next generation of
consumers will bring additional challenges.
The good news: Loyalty platform and
analytical tools have evolved to meet these
challenges. Today, we can meet Canadian
consumers on their own terms.
Moving Pictures / 3
CANADIANS AND REWARDS
Aimia’s 2011 survey of 1,000 Generation Y consumers and 1,000 older consumers reveals that Canadian Millennials are both more
savvy about reward programs and more demanding. As Millennials assume control of the consumer economy, loyalty marketers will
need to deploy state-of-the-art loyalty platform and analytical tools to deliver immediate, tangible, and relevant rewards.
PLAYING THE GAME: Millennials
play the loyalty game to win
Q: Are you a member of a loyalty program? (yes)
They expect programs to be
free, relevant, and fast
Q: Top reason to join a reward program:
They’re open to more non-traditional rewards
Q: Top program sectors (non-coalition):
Q: Preferred reward categories:
non-traditional
Entertainment
Financial
traditional
Home Electronics
Cash Back
Entertainment
Gift Cards
Fashion
Travel
Travel
E
SAV
VIP Access
Discounts
Music
Charity
Retail
Groceries
Mobile Downloads
© 2013 Aimia Inc. All Rights Reserved.
4 / Moving Pictures
THE DIGITAL DIVIDE
Perhaps the most profound and important
change in the Canadian consumer
landscape is the expansion of the
digital divide: That gap between those
Generation Y “digital natives” and their
older compatriots who have consolidated
their brand interactions through digital
channels, and those consumers still
wedded to old habits. A similar gap exists
between marketers who understand the
value of collecting and analyzing data
from digital interactions — and who
have invested accordingly — and those
marketers still living in the analog past.
Bridging this gap is the most important
challenge ahead of us.
For marketers hoping to leap across
the digital divide, your most significant
challenge is capturing that “moving picture,”
multichannel view of your customers.
Transactional purchase data was once the
ceiling of your customer strategy; now it’s
the floor. Whether you capture interactions
in-store, online, from the call center, from
mobile devices, or through social media,
these interactions are now as important as
transactions. Increasingly, the winners of the
race for customer loyalty in Canada will be
those marketers who successfully connect
the dots between these digital interactions
and purchase data.
What makes this task even more complex
is the need to treat consumers consistently
across all channels. Marketers can fulfill this
need by delivering customer information
to front-line staff, and breaking down
the data silos between their physical and
virtual worlds. When it comes to creating
compelling multichannel experiences,
however, Canadian retailers often lag
behind their peers. With U.S. retailers like
Target now storming across our border,
it’s going to get harder still to compete. As
digital channels proliferate, the complexity
of this problem will only increase.
To bridge the gap between consumer
expectations and marketing reality,
consider the following best practices:
> Connect the dots through your
loyalty program. Canadian consumers
know their personal and behavioural data
has value. They’re willing to share it with
you — provided they’re in control of when
and how they share it, and provided you
reward them for the exchange. Fortunately,
Canadian consumers view loyalty
programs as a “safe haven” for sharing
such information (see Born this Way: The
Canadian Millennial Loyalty Survey at
aimia.com). Because program membership
provides a unique identifier visible across
channels, you can leverage the program
to offer your customers tangible rewards
for voluntarily connecting their online
and offline behaviours. To measure the
impact of this activity, take advantage
of new loyalty dashboards that connect
brand engagement metrics with traditional
recency, frequency, and monetary (RFM)
calculations.
> Let your customers choose the
channel. Overall, Canadians are slightly
less enthusiastic than American consumers
about offers via SoLoMo (Social, Local,
and Mobile) channels. They’re less likely
to respond favorably to location-based
offers, for example — and they’re also
more wary about smartphones tracking
their location. According to our research,
Canadians prefer to be contacted through
less intrusive communication channels,
even when they’ve opted into your
communication stream. In fact, most
Canadians still prefer to interact with
brands through email.
As an alternative to pushing intrusive
© 2013 Aimia Inc. All Rights Reserved.
mobile offers to everyone, consider saving
your location-based offers for those highvalue customers who have opted in, and
you may unlock new pathways to loyalty.
Retail “showroomers,” for example —
consumers who examine products in stores
and then purchase online for a lower price
— are ten times more likely to respond to
location-based mobile offers (The Aimia
retail brief “Through the Looking Glass”
offers more insight into this trend.)
> Migrate to mobile marketing — but
do it thoughtfully. The hype surrounding
the mobile channel in particular makes it
tempting to put all of your eggs into this
device. But our research shows that only
a minority of Canadians currently want to
receive mobile offers — or even have the
ability to do so. Canada is one of the most
expensive telecommunications markets
in the world, and nearly one quarter of
Canadian consumers don’t own a mobile
device — compared to the 8 percent of
Americans who don’t own one.
Canadians’ comparatively slow adoption of
smartphones also holds back their ability
to participate in multiple loyalty programs.
According to The Boston Consulting
Group’s report “The Value of Our Digital
Identity,” finite space in consumers’ wallet
limits the number of programs in which
they will actively participate. But the report
also notes that “smartphones [sic] promise
to shake things up, expanding both the
reach and depth of these initiatives. Mobile
loyalty apps and wireless integration
with point-of-sale terminals mean that
the device itself can be used in place of
cards, adding convenience and creating
a ‘bottomless wallet’ where dozens of
[programs] can be as easily managed as
two.”
The drivers of this activity will be Canadian
Millennials, who are more than twice
as likely to own a smartphone as nonMillennials. They’re also more willing to
receive reward information via their mobile
devices. Loyalty marketers hoping to build
relationships with young Canadians must
ensure that their programs are mobileenabled. The future of loyalty is mobile —
but take the time to test and learn, to
ensure that you’re leveraging the mobile
channel to build loyalty with your best
customers, rather than customers who are
just looking for a reason to tune you out.
Moving Pictures / 5
THE DATA CONUNDRUM
Like the rest of the world, Canada is increasingly awash in data — and a new generation of global “Big Data” companies has arisen
offering solutions to companies hoping to extract marketing insight from vast data sets. But if you’re struggling to understand how to
leverage insight from transaction data, build multichannel data sets, or incorporate unstructured data into your value segmentation,
then you’re not alone — the world faces a talent shortage of data professionals and marketers fluent in data science. The more data
we generate, it seems, the further away our mastery of it.
total
amount of
data stored
worldwide
2011>
1.8
zettabytes
2012>
2.7
zettabytes
(+48% growth from 2011)
2015>
8.0
zettabytes (est.)
(+296% growth from 2012)
To help give some perspective, the number of zeroes in a zettabyte:
1,000,000,000,000,000,000,000 =
21
If you stored a zettabyte of data on compact discs, the stack of discs would reach Mars.
60%
Projected annual
growth rate for
global data
Estimated shortage of deep
analytical talent, North America:
190,000
5%
Projected annual
growth rate in
global IT spending
40%
Estimated increase
in retailer operating
margin due to big
data benefits
Estimated shortage of data-savvy managers:
1,500,000
Sources: IBM, IDC, Mashable, McKinsey Global Institute
© 2013 Aimia Inc. All Rights Reserved.
6 / Moving Pictures
THE MOBILE WALLET FRONTIER
The marketing world has seen successive
waves of technological convergence
transform customer loyalty: The
convergence of the customer database
with promotional currency that gave
birth to the modern loyalty program;
the convergence of computer networks
with personal computing that gave rise
to the internet; and the convergence
of the internet and the mobile phone
that gave rise to smartphones. Each
of these moments of convergence has
resulted in more opportunities to reach
more consumers through more channels
than ever before. The latest wave of
convergence promises to unlock even more
opportunity — such as the convergence
of payment networks and ecommerce
in mobile wallet applications. But will
marketers use this technology to build
loyalty? Or will consumers grown weary
of “always on” marketing turn away from
mobile commerce?
Are
Canadians ready
to embrace mobile
commerce? In Canada, it’s
clear that mobile wallet
acceptance will be driven
by Millennials.
© 2013 Aimia Inc. All Rights Reserved.
Like most developed markets around the
globe, Canada has seen the beginnings of
a virtual land rush in the mobile payments
and ecommerce space. In 2012, several
ecommerce service providers established
footholds in the Canadian market.
MasterCard launched its PayPass Wallet
suite of services, while Visa launched a beta
of V.me, its ecommerce suite. Both Square
and PayPal offer credit card readers for
mobile devices, while Research in Motion
(now BlackBerry) has agreed to manage
security technology that would enable
mobile wallet applications.
Collectively, these competing platforms
promise a host of new tools for loyalty
marketers. Square, for example, offers
anyone with a smartphone the ability
to accept credit card payments, which
effectively gives small merchants point-ofsale capabilities previously available only to
larger marketers. Other mobile commerce
platforms will allow marketers to link mobile
location tracking with the merchant’s
retail systems. Imagine a future in which
marketers can recognize repeat customers
when they enter the store, greet them by
name, prepare orders, inquire after previous
purchases, or proactively offer purchase
suggestions based on transaction history.
All of this functionality is coming soon to
Canadian marketers.
But are Canadians ready to embrace
mobile commerce? In Canada, it’s clear that
mobile wallet acceptance will be driven
by Millennials. One of the more interesting
findings from our recent Millennial Loyalty
Survey of Canadian consumers is the clear
age gap in Canada regarding interest in
mobile wallet applications. In both the
United States and the United Kingdom,
Millennials are about twice as likely as older
consumers to express interest in mobile
wallet; in Canada, Millennials are about three
times more likely to express such interest.
This enthusiasm gap will shrink as Millennials
begin to dominate Canadian commerce;
indeed, according to TNS Global’s Mobile
Life study, 16 percent of Canadians already
use mobile payments, either in the form of
phone apps or near-field communication
technology.
But advances in mobile payments give
rise to two areas of concern. First, there’s
no guarantee that competing mobile
commerce platforms will be compatible:
For a mobile transaction to occur, merchant,
bank, issuer, and mobile provider platforms
must all work in harmony. But the mobile
commerce landscape in Canada is likely to
be fragmented, with platforms competing
against one another. This lack of a universal
platform is likely to lead to a balkanization of
consumer loyalty and increased consumer
frustration.
Second, there is a pronounced risk that
marketers hoping to leverage mobile
devices for marketing will do so without
concern for consumer privacy, and without
accounting for consumers’ desire to be
recognized and rewarded for sharing the
personal details required for marketers to
deliver value and relevance via locationbased offers, mobile banking, and mobile
commerce. Marketers who push promotional
mobile offers at consumers regardless of
consumer interest or desire risk killing the
potential of mobile commerce before it
takes flight.
Young Canadians are ready and willing to
embrace mobile commerce — provided the
value of these tools is readily apparent. For
widespread adoption to occur, marketers
must leverage this technology to enable the
larger goal of building trusted, committed,
and reciprocal relationships with their best
customers.
Moving Pictures / 7
CANADIANS AND TECHNOLOGY
Aimia’s Canadian Millennial Loyalty Survey reveals that adoption of mobile loyalty applications, mobile wallet platforms, and mobile
banking services will be driven by Generation Y. The “age gap” in adopting these services is even more pronounced in Canada than in
the United Kingdom or the United States — with Millennials three times more likely than older consumers to express interest in these
applications, as opposed to twice as likely in the United Kingdom or the United States.
2x
Mobile offers – Canadian Millennials use branded smartphone apps at the same rates as older
consumers – but are far more likely to engage with their favourite companies through mobile devices.
2x
1.5x
Mobile wallet – Work remains to convince Millennials of the value of mobile wallet applications.
2.5 – 3x
© 2013 Aimia Inc. All Rights Reserved.
Moving Pictures / 8
THE IMPORTANCE OF DATA UNIQUENESS
The rise of Big Data means that marketers
previously awash in data are now
drowning in it. Transaction data through
banks and issuers, web analytics, mobile
and social data, online search data,
or third-party household or consumer
purchase data — all of these data sets
are now available, and each set contains
potentially useful insights. The problem?
Many of these same data sets are also
available to your competitors. Everyone
has access to the same puzzle pieces, but
no one has the complete set. So how do
you build customer insight in a way that
creates competitive advantage?
While loyalty and
reward program data
provide a firm foundation
for developing proprietary
customer insight, these data
sets are often under
or overvalued.
To set your marketing strategy on
the proper path, you must focus your
data analytics efforts on building data
“uniqueness” — compiling a portrait of
customer behaviour by combining data
sets in such a way that your competitors
can’t readily duplicate your efforts. Rather
than work from the same puzzle set as the
competition, find the puzzle pieces they
don’t have — the data sets most predictive
of customer behaviour, and which correlate
most strongly with relationship strength.
Data uniqueness gives you a competitive
edge that’s hard to replicate. Loyalty
marketers have an inherent advantage.
That’s because loyalty and reward program
data is both unique and proprietary
to program operators — unlike many
consumer data sets, loyalty data isn’t
generally available on the open market.
Loyalty data also contains customer insight
simply not available anywhere else. Core
loyalty data sets typically include:
> Transaction data: Unlike ecommerce
businesses or payment card issuers,
many businesses still struggle to capture
purchase behaviour at the level of the
individual customer. Because reward
program members opt in, data on the
RFM value of customer purchases are at
your fingertips. Add in the stock keeping
unit-level shopping basket data available to
many high-frequency retailers and a wealth
of customer insight is yours to command.
> Earning data: In currency-based reward
programs, information about where and
how your customers are earning their
points and miles can unlock deep insight
into customer loyalty and relationship
strength. In coalition programs, crosspartner earning data provides an additional
layer of behavioural data.
> Offer response data: Just as ecommerce
firms gain understanding from knowing
© 2013 Aimia Inc. All Rights Reserved.
what items their customers browsed but
didn’t buy, so too do loyalty marketers
gain as much insight from knowing what
bonus offers, partner promotions, and
experiences their members reject as
they gain from knowing what offers they
respond to.
> Redemption data: Reward redemption
activity is both unique to loyalty programs
and arguably the most valuable source of
insight available into the emotional drivers
of loyalty. Knowing whether a customer
longs for free air travel, merchandise,
experiences, or even cash rewards allows
you to tailor your marketing to the
individual.
As historically valuable as loyalty data has
been, however, it’s now the starting point
of your customer strategy, rather than
the endgame. While loyalty and reward
program data provide a firm foundation
for developing proprietary customer
insight, these data sets are often under or
overvalued. Marketers who dismiss reward
programs as the price of doing business,
rather than making them central to their
marketing strategy, tend to undervalue
loyalty data; in contrast, marketers who
stop at purchase and redemption activity
often overvalue that data. They leave on
the table opportunities to “connect the
dots” to other behavioural data sets that
provide customer insight along all points
on the purchase cycle.
Building outward from a foundation of
loyalty data is one of the most proven
methods of building unique data sets
that deliver proprietary customer insight.
That’s because loyalty marketers have, in
essence, a 30-year head start, with a deep
and proven set of tools and best practices
designed to capture those moving pictures
of customer value. The rest of the world is
only now starting to catch up.
9 / Moving Pictures
LOYALTY IN CONTEXT
How Contextual Loyalty will
transform marketing
During the past decade, the loyalty marketer’s job has become
more complex. As communication channels have proliferated,
the ability of consumers to interact with brands — not to
mention each other — has increased. Consumers’ expectations
of value from these interactions has increased as well. Marketers
hoping to design effective loyalty programs must take this
complexity into account.
To help marketers develop next-generation loyalty initiatives, Bill
Hanifin, Consulting Practice Leader at Aimia, has identified three
key latent and unrealized sources of marketing value available
to marketers who connect the dots. First, there is significant
untapped value locked in traditional loyalty data; second, the
personal and omnipresent nature of the mobile channel makes
it a compelling source of consumer insight and engagement;
and third, the value of social media interactions lies in our ability
to connect this activity to purchase behaviour.
Hanifin has unified these three sources of untapped value into
a single rallying cry for marketers: Contextual Loyalty, which
is defined as a loyalty strategy that links data and insight
from mobile and social channels to your loyalty program to
reward engagement as well as behaviour. The key principles of
Contextual Loyalty include:
4
Definitions of
customer value
must evolve beyond
transactions to include
brand interactions
and brand advocacy
through social media.
Interactions and
advocacy must be
recognized and
rewarded.
3
1
The balance of
rewards should shift
away from a focus
solely on extrinsic
economic rewards
to include intrinsic
rewards such as
exclusive experiences,
special access, and
recognition on
financial terms.
2
Rewards must
evolve to engage
on emotional and
intellectual drivers
of loyalty as well as
reinforce core purchase
behaviour. Such
“intrinsic” rewards
often have lower
costs than traditional
tangible rewards.
Marketers must
reinforce loyalty
along all points of the
sales cycle. Customer
insight translated into
value and relevance
and delivered through
mobile channels will
transform loyalty
marketing.
5
The channel
or network through
which marketers
engage customers is
less important than
the ability to engage
customers at a time
and place of their
own choosing.
For more information on Contextual Loyalty, visit Bill Hanifin’s blog at LoyaltyTruth.com.
© 2013 Aimia Inc. All Rights Reserved.
Moving Pictures / 10
CONCLUSION: TILT-SHIFT MARKETING
Among the countless memes the internet
has given us, one may be a particularly
useful metaphor for understanding how
loyalty marketing will evolve in Canada.
Tilt-shift photography is the use of
camera movements, such as the use of
tilt for selective focus, to transform an
ordinary overhead shot — of a city street,
a beach scene, or a carnival boardwalk
— into a tiny miniature scene. Because
the camera movement results in a narrow
depth of field, your brain is tricked into
seeing the image in a fundamentally
different way. The scene hasn’t changed
— but your perception of it has been
fundamentally altered. Scenes that you
might otherwise take for granted take
on a magical quality, as if some gifted
model maker had constructed a miniature
tableau for your private amusement.
Don’t get
bogged down in Big Data.
If you have yet to figure
out how to incorporate
unstructured data sets or
leverage social media
as a channel, don’t
panic.
So it is with our ability to leverage unique
customer data sets to see customer
relationships differently. The rise to a
data-driven world; the emergence of
mobile as a marketing channel; the
development of new tools and platforms
for data analysis and insight; the coming
of age of the Millennial generation —
each of these developments represents
profound change for Canadian marketers.
But just as photographers can use
simple camera movements to produce
moments of transformation, so too can
marketers leverage the relatively simple
tools of loyalty marketing to produce
detailed, compelling portraits of customer
behaviour. We can capture those moving
pictures, and bring them into focus.
To take the first steps, we recommend
concentrating your efforts on a few simple
tasks designed to help you leverage
customer data to build relationship value.
> Leverage the license plate. There is
no single data source that provides a
complete picture of customer behaviour.
Google knows what you want, but not
what you’ve done. Foursquare knows
where you are, but not what you like.
Facebook knows what you like, but not
what you buy. Retailers know what you
buy, but not what you want. As you
incorporate these broader data sets into
your marketing, the unique “license plate”
identifier of loyalty program membership
can function as the connecting thread
between your customers’ online and offline
behaviour. By connecting these outside
data sets to a single customer making
purchases over time, you can develop
detailed, unique portraits of individual
customers.
> Reward interactions as well as
transactions. Canadian Millennials
understand that their personal data
and online interactions are valuable to
marketers — and they’re willing to share
those details for the right combination of
reward and recognition. Test and learn:
Offer bonus rewards for joining a program
via social media log-in; for recruiting new
members; for answering an online survey;
or for completing a product review on
your web site. These young consumers will
respond with profitable behaviour shifts,
increased loyalty, and stronger advocacy.
© 2013 Aimia Inc. All Rights Reserved.
> Go beyond RFM analysis. The days
of relying solely on transactional data
for customer insight are over. New value
segmentation models that incorporate
channel choice, pre-purchase activities,
social media activity, and cost-to-serve
calculations are improving program
return on investment by providing a more
complete picture of customer value.
Marketers have more opportunities to
integrate a wealth of behavioural data into
their loyalty models. Find those data points
most predictive of customer profitability,
and use them to unlock the hidden value
of your loyalty data.
> Start listening. Despite the rise of
social networks and user-generated
content, many marketers still employ
one-way communications to broadcast
messages to their message-weary
customers. Wired Canadians have
already moved on. They want to talk
to you, and they want to talk to each
other. Provide platforms for them to
refer, comment, review, and share their
experiences — and then get out of the
way. Simply by stepping aside, you’ll
find that your customers will begin to
segment themselves: new mothers will
find each other; wine enthusiasts will
trade tips; travel junkies will post about
the hottest travel reward options. The
resulting unstructured data will provide an
integration challenge — but by focusing on
the small wins, you can build a robust and
unique customer view.
Most importantly: Don’t get bogged down
in Big Data. Most Canadian organizations
have taken the basic steps required to
optimize their web presence and build
common data sets. So if you have yet to
figure out how to incorporate unstructured
data sets or leverage social media as a
channel, don’t panic. The truth is that
relatively few companies will become
members of the Big Data club: The usual
suspects include Google and Apple, along
with a handful of banks, telcos, utilities,
and airlines in Canada. You don’t need to
join that club — you can extract significant
value from your unique data set by
starting small, and doing a few things well.
You’ll find you can turn those once-static
customer snapshots into moving pictures
of your best customers.
Moving Pictures / 11
SUMMATIONS
1
•
•
••
2
•
••
Let your customers
choose the channel
••
••
••
Connect the dots through
your loyalty program
•
3
•
•
••
••
•
4
Reward interactions as
well as transactions
••
••
Migrate to mobile — but
thoughtfully
••
5
Incorporate engagement data
into your loyalty models
••
••
••
6
Build and leverage
platforms for user
generated content
© 2013 Aimia Inc. All Rights Reserved.
12 / Moving Pictures
ABOUT THE AUTHORS
Kevin O’Brien, Chief Commercial Officer, Aeroplan Canada
As Chief Commercial Officer at Aeroplan Canada, Kevin O’Brien leads all commercial aspects of Aeroplan’s
business, with a mandate to drive growth by continuing to foster member engagement through new and
innovative products and programs. He is also responsible for developing strong partner relationships and
delivering value that enables Aeroplan’s partners’ success.
Kevin joined Aeroplan in 2009 as Vice-President, Strategy and Business Innovation for the Canadian
region and VP Strategy and Planning for Aeroplan, where he played an integral role in the development
and implementation of strategic and business planning initiatives for the Canadian business. He played a
key leadership role in creating Aeroplan’s successful corporate strategy.
Kevin joined Aeroplan after more than 16 years in strategy consulting - most recently as the Managing
Partner of the Montreal and Toronto Corporate Consulting practice of SECOR Consulting, Canada’s largest
independent strategy consulting company. Kevin co-founded Diesel Think Tank, a Canadian consulting
company focused on the closer integration of primary customer research and business strategy.
Kevin holds a bachelors degree from the Ivey Business School at the University of Western Ontario, and
is a member of the Ivey Advisory Board. Kevin currently lives in Toronto, Canada, with his wife and their
three sons.
Michael O’Sullivan, President Proprietary Loyalty, Canada
Michael O’Sullivan was appointed President, Proprietary Loyalty, Canada for Aimia in August 2011. In this
role Michael is responsible for all aspects of the business, with a focus on growth through partnering with
clients to create, market, and deliver new loyalty models that enhance customer relationships and generate
incremental revenue. Michael is an exemplary leader who is passionate about creating high performance
teams that achieve remarkable results.
Michael joined Carlson Marketing in 2004 and held several executive roles from 2004 through 2011 in Asia
and the USA. As General Manager of Australia (from 2004 to 2006) and Senior Vice President Asia Pacific
(from 2006 to 2010), his leadership helped transform Carlson Marketing’s Australian business into one of
the most successful operations in its global network.
Before joining Carlson Marketing, Michael’s career encompassed mergers and acquisitions, corporate
strategy, marketing and management consulting across the travel, technology, automotive and banking
sectors. Outside of Aimia, Michael is a Non Executive Director of a UK based hospital risk management
company that helps prevent death and injury to patients in hospitals.
Michael holds an Economics Degree and a Masters in Applied Finance. He is a graduate of the Harvard
Business School and the Australian Institute of Company Directors (AICD). An Australian native, Michael
lives in Toronto with his wife and four children.
About Aimia
Our Company: We are a global leader in loyalty management. Our unique capabilities include
proven expertise in delivering proprietary loyalty services, launching and managing coalition
loyalty programs, creating value through loyalty analytics and driving innovation in the emerging
digital and mobile spaces. Aimia owns and operates Aeroplan, Canada’s premier coalition loyalty
program and Nectar, the United Kingdom’s largest coalition loyalty program. We run and build
loyalty programs for ourselves and for some of the world’s best brands. Customer data is at the
heart of everything we do. We are Aimia. We inspire loyalty.
Visit us at aimia.com
© 2013 Aimia Inc. All Rights Reserved.
SAMPLE OUR BRAIN FOOD
Sample some of our loyalty thought leadership in the Knowledge section at Aimia.com.
THE RISE OF THE DATARATI: How Customer Data Will
Redefine Loyalty Management
By Rupert Duschene, CEO
In this insights white paper, Aimia’s Group Chief Executive outlines his vision
of the future of loyalty management, with a focus on extending the Loyalty
Cycle, connecting the data dots and delivering value and relevance through
our marketing efforts. It’s a big picture vision that keeps the needs of the
customer squarely in focus.
BORN THIS WAY:
The Canadian Millennial Loyalty Survey
By Rick Feguson
Vice President
Knowledge Development
The results of Aimia’s 2011 consumer research in Canada reveals surprising
insights into the behaviour of Generation Y and their relationship to
technology, data privacy brand loyalty and reward programs.
THE NEW DATA VALUES: Securing Customer Data as a
Renewable Resource
By David Johnston, President and CEO, EMEA and
Jeremy Henderson-Ross, Legal Director and General Counsel EMEA
David and Jeremy review the landscape of consumer data privacy including
the government in Canada, Europe, and the United States, and provides
a template for brands to publicly proclaim a set of Data Values that keep
the sanctity and security of consumer data at the centre of their marketing
efforts.
© 2013 Aimia Inc. All Rights Reserved.
GLOBAL LEADER IN
LOYALTY MANAGEMENT
© 2013 Aimia Inc. All Rights Reserved.