Personnel experiences with loyalty cards

As a customer, I am attached with different loyalty card companies. I carry loyalty cards such as air miles, shoppers optimum card and HBC rewards card .

My experience in using these cards is quite good so far. But sometimes I feel that instead of carrying different cards in my wallet, I should carry minimum cards or even one card. The reason being these cards make my wallet heavy and I can’t use HBC rewards card in shoppers drug mart or in Canadian tire store. There should be a way out where we can use one single card in all places instead of carrying multiple cards. The other factor is that in case you lose your wallet, then you don’t have to call all card companies to reissue your cards. Having one card in a wallet increases security and privacy whereas multiple cards in a wallet reduce our privacy. Sometimes we don’t even know which card we are carrying with us due to more number of cards in our wallet. Loyalty programs are made for customers but they still need to make a lot of changes in their programs. They carry many benefits such as promoting different brands in a store, creating customer awareness regarding their spending habits.

Building effective customer loyalty programs

Building an effective customer loyalty program is not an easy task. It requires careful observation of a lot of things especially when it comes to developing good customer relationship. Better decisions are to be made by looking at customer data, which should be customer oriented. Also, the loyalty program should provide enough rewards to meet customer’s needs and the reward points that customers earns should be easy for them to redeem. Most of the loyalty programs that we are using today have some sort of limits, which restricts redeeming our loyalty points. To overcome these limits, a customer oriented loyalty program should be developed. While developing cash back rewards program, percentage is a very important factor. For example, some companies give cash back of 2% per $1000 which is only $20. Such things should be considered while designing reward programs.

Relevance is also an important part of effective loyalty program. There should be certain time limits in which the reward points are collected and can be easily redeemed. For this purpose, they need to distinguish between customers who spend more and those who spend less. Sometimes customers, who spend less in store, have to wait for a longer period of time before they can redeem their rewards. The customers who collect points quickly by spending more in stores are able to redeem their points rapidly. Furthermore, loyalty card companies should set out a certain time limit for both types of customers in order to redeem their points swiftly. Customer participation is also very important in designing an effective loyalty program. Therefore, the surveys are needed to be done in order to understand customer’s desires properly. The type of brand customers are looking to spend more on can prove an effective way to make a loyalty program more attractive to customers.

Disadvantages of customer loyalty programs

So far we have considered only one side of customer loyalty programs, which are their benefits. However, there are some disadvantages of these programs too. Most of the these programs are managed by third party companies, which keep track of customer’s points, their private information such as date of birth, social insurance number, address, etc. Somehow I feel that our privacy is not being given the proper importance as these companies are tracking all of our movements such as where we shop, what we shop, and other spending habits. Our information is shared with third parties to do surveys, to promote their products and for various other reasons. Today we are living in an age of cyber crime, which is a very important factor when it comes to our privacy. If a hacker hacks these companies loyalty program systems, all of our information might go into wrong hands and can have drastic consequences.

The other disadvantage of such programs is to lure people to spend more money in the store by making them collect extra loyalty points or rewards. In this scenario, consumers are actually spending most of their disposable income just to collect few extra reward points. Loyalty cards are like a temptation for consumers to spend their disposable income. The fact is that they increase the price of a product and then give portion of that towards reward points. Ultimately it is the consumer who is paying more from his/her pocket. Once you get into such schemes, it’s never easy to get out of them. It is like a trap where one gets caught just because of few extra dollars they earn. The decision of enrolling into these loyalty programs is not easy as we have to see our needs and desires. It depends upon what type of card or programs we are looking at such as travel rewards, cash backs or air miles.

Contribution of Customer loyalty programs to charity

Charity is one of the most admirable areas where customer loyalty programs have shown up their support. They provide customers with an option of donating their earned points towards their favorite charity or a community project.Hudson Bay’s Company was one of the first companies who introduced a program where customers can donate their reward points to charities. Even companies such as air miles are providing tax receipts on all donations you make through their card. This is a unique way of maintaining loyalty with the customers and at the same time serving community causes. On the other hand, Aeroplan has set up a special account for making donations towards Red Cross Fund.

Recently, Canadian Tire came up with an innovative idea of upgrading their current loyalty program. This program is basically designed to allow customers to collect money electronically with a loyalty card or key chain fob. The main idea behind this is to reduce the use of paper money. Currently they are testing this program in Nova Scotia. The customers also have an option to donate Canadian Tire money towards their charity program called JumpStart. I would say this new program will also help in saving trees and will definitely be considered as an environmental friendly loyalty program.
Few months ago, Air miles came up with an idea of giving instant cash rewards to its customers. Before, it was quite hard to redeem rewards for air tickets as one had to collect a certain number of air miles points before they could redeem them. However, now they have made some changes to their loyalty program allowing customers to redeem their air miles points for cash. A lot of positive changes are being made to customer loyalty programs to make them more attractive to customers.

Customer Loyalty Programs

Customer loyalty Programs are important for the success of a business organization. They were first started in Canada by Canadian Tire in the form of giving cash bonus coupons to its customers. Gradually, other loyalty card programs came up with similar ideas for rewarding customers such as Air Miles and Aeroplan.The main idea behind introducing customer loyalty programs was to reach shoppers and make their shopping experience memorable. These companies give rewards in many different forms such as travel rewards, gas discounts etc. These rewards are the way of increasing sales and maintain good customer relations. The other purpose behind introducing loyalty programs is to track buying habits of customers and how frequently they visit the store to buy products. By giving rewards to customers companies assume that they will be a part of their company in future. Also, it is likely that customers with loyalty cards will spend more on products and visit frequently to the store. 
Implementing loyalty programs enables companies to figure out which areas of their businesses are doing well and which need improvement. Nowadays many credit card companies have started loyalty programs such as BMO card has its collaboration with air miles. This has proved as a milestone for card companies to improve their performance and efficiency. The way Canadian economy works is that people like to spend more on shopping & traveling around the world. So different companies came up with an idea of giving travel rewards and so far it has worked really well in improving customer relationships. Even insurance companies are accepting payments through credit cards which are associated with some loyalty programs. So the very idea of introducing customer loyalty programs is to help improve customer service and their shopping experience.