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Canadians love getting free stuff. A big way to do that: collecting loyalty points. Over 90% of us belong to at least one program. And on average Canadians are enrolled in more than 12.
In this episode Clinton Braganza, who oversees the rollout of the new Scene+ program at Scotiabank, provides us with an insider's look at loyalty programs in Canada, how they’ve evolved and where they’re headed.
Key moments this episode:
1:24 — A brief intro to the customer loyalty space in Canada
1:48 — What kinds of free stuff do Canadians like?
2:34 — The digitization of loyalty programs
4:56 — How has inflation influenced how people use loyalty cards?
6:12 — The evolution of Scene+
9:16 — What was the ultimate objective of creating Scene+?
10:26 — The biggest challenges in creating a new loyalty program
11:53 — The results so far of the Scene+ roll out
12:34 — Why loyalty programs are especially important during inflationary times
12:48 — Clinton’s all time favourite film
Transcript:
Stephen Meurice: Is there any better sentence than, “I got it free with points”?
It’s a line that will guarantee ‘oohs’ and ‘ahhs’ and maybe quiet jealousy in whoever you tell it to.
Clinton Braganza: We love getting free stuff. And Canadians love almost the gamification of saving.
SM: That is Clinton Braganza, the Senior Vice President of Customer Loyalty and Partnerships at Scotiabank.
CB: Our data suggests that over 90% of Canadians belong to at least one loyalty program and the average number of programs that people are involved in, in Canada, it’s north of 12.
SM: That’s a lot of free stuff. And the latest program Canadians are racking up points with is Scene+. Clinton’s been overseeing the rollout. You might remember the original Scene as a mainly movies focused loyalty card. It’s been expanding since December of last year. Partnering with places like Sobeys and Expedia. And rolling out across the country. Clinton is our guest this episode and he’ll provide us with an insider's look at loyalty programs in Canada. How they’ve evolved and where they’re headed.
I’m Stephen Meurice and this is Perspectives.
Clinton, thanks so much for being on the show today.
CB: Pleasure to be here.
SM: So, I imagine lots of research went into the launch of Scene+. We heard in the intro some facts about just how much Canadians love collecting points. What else can you tell me about the customer loyalty space in Canada?
CB: Yeah, absolutely. First of all, Canadians love their loyalty programs. When we talk to Canadians, more and more opportunities to earn and redeem is paramount. It's across all demographics. I mean who doesn't want an opportunity to be rewarded for their loyalty and get free items?
SM: For sure. Are there particular kinds of free things that people mostly focus on?
CB: Yeah, so certainly during the pandemic, I'd say Canadians took a much more pragmatic approach to their loyalty programs. If I think about at the bank, redeeming for paying off your statement credits and paying off your credit cards certainly spiked as movie theatres and restaurants were closed. But if you think about the Holy Grail of a loyalty program, it's really giving Canadians what they want and so not trying to restrict them in any one particular category.
SM: Right, so loyalty programs have been around for a long time. I remember getting Subway sandwiches and you get a little ticket on a card or a punch card at the coffee shop or whatever. How have these programs evolved from those sort of rudimentary beginnings to what they are now?
CB: Yeah, I would say, I would characterize as going from the analog world to a digital world. So even beyond the Subway card where you get stamped, I think of going with my dad to Canadian Tire. And him handing me Canadian Tire currency and me thinking this was actually real money counting it, organizing it into his glove box. And in fact it was real currency. They were giving you dollars off or cents off for the next time that you happen to be shopping at Canadian Tire. But a very tactile example of there being value and you can imagine the millions of dollars that were stored in people's glove boxes or their cars. And over time one of the recognitions was you're rewarding your customers for coming back, whether it's Subway, whether it's Starbucks or whether it's Canadian Tire. But frankly, you don't know much about those customers. And so, the digitization of loyalty programs enables you to capture data. Who are these people? Who's spending more than others? Who are your top customers? So that you can reward them disproportionately and also change behaviour in the construct of your program. And so, when we moved to digitizing that, it enabled just an enormous amount of data to be ingested. Whether in loyalty programs or certainly at the Bank.
SM: And does that data tell you about how effective the programs are? I mean, are people actually making purchasing decisions based on the loyalty programs that they belong to?
CB: Absolutely. So that data enables you to close the loop to understand, are you giving away value that is returned in value by the loyalty of your customer? And certainly, from our experience at Scotia, what we see is people are attracted to us in higher levels when they have a loyalty currency versus a non. They use our products more often. They use more of our banking services. And finally, they are less likely to leave our franchise once they become part of our franchise.
SM: Okay, I’ll get you to talk a little bit more about the specifics of Scene+ and the benefits for costumers as well as the Bank. But just quickly, rising inflation has obviously had an impact of people’s consumption habits – do loyalty cards play a role in that at all? Do people see that as a way to hedge against inflation?
CB: I would say at a conceptual level, qualitatively the answer is yes. We haven't seen evidence of Canadians redeeming points at higher levels than they have in the past. There are, as you can imagine, literally across Canada and all the loyalty programs, there are billions of dollars and trillions of points that are waiting to be redeemed in people's accounts. I talked about a little bit more of a pragmatic approach during the pandemic and paying off bills. But as I think about our partnership and Scene+’s evolution with Empire brands. So, Safeway, Foodland, etc. Just the ability to save on groceries on a weekly or monthly basis. Certainly, we're in early days of that rollout. But I imagine Canadians will start to redeem at higher rates because now they have the ability to do so on everyday spend versus exclusively,.what used to be a movie program.
SM: Right, so Scene has existed for a while. Primarily as a movie loyalty program. Can you tell us about the origins of Scene+? When did you start working on this? What was the idea behind it?
CB: Scene was born in 2007. As you said, it's a movie program, a partnershipbetween Scotiabank and Cineplex that allowed Canadians to earn Scene points to then be able to redeem them to watch movies. The incremental value that Scotiabank provided is through debit and credit cards where you could earn accelerated opportunities. But it was really born out of a desire to learn more about Canadians. Who were the Scotiabank shoppers? What was their behaviour? And for Cineplex, if you can imagine, they learned a lot on who their movie goers were. So, prior to Scene, they would know how full their theatres were, but they wouldn't know if people are seeing on average 10 movies a year or two movies a year. And so, you start to learn a lot more about consumer behaviour when you have loyalty behaviour behind that. That program grew far greater than I think anyone at the bank or at Cineplex imagined. So, prior to launching scene plus we had over 10 million members that were part of this program. So, it really became the preeminent entertainment program in Canada attracting more than 10 million members to Scene. And it became a beloved program. When we looked at the other loyalty programs in Canada, what Canadians love about Scene is that it's super simple to earn and it's super simple to redeem. So unlike airline programs, they are a little bit more challenging to redeem. Scene was built on simplicity.
SM: Right. How did that evolution from Scene to Scene+ happen?
CB: So, as we increase the ability to earn and redeem points, one of the things that we're really careful about is not to add any undue complexity to the program. Because as I mentioned earlier, that's a very, very important part of the loyalty offering in Canada. And so, when we launched Scene+, we partnered with Expedia. World class brand, digital platform, very easy to earn, very easy to use, no restrictions. That checked a lot of the boxes. We partnered with Rakuten. Online, Canadian platform, a worldwide brand but strong presence in Canada that give you an opportunity to earn your cash back currency in Scene+ points. So, this was circa December 2021, and Canadians have reacted really, really well. In fact, since we launched, we've added nearly a million new members to the program. And literally every month there are billions of points that are being earned and billions of points being redeemed.
SM: And what was the ultimate objective of this? I mean, it's a big ambitious growth in this program. You want to be number one, I'm sure. Was there somebody you were targeting in particular?
CB: Yeah, certainly there was a competitive component to it and we absolutely want to be number one. Make no mistake. There was also, at Scotiabank, we operated two loyalty programs. One was in partnership with Cineplex, Scene. The other was a proprietary in-house program, Scotia Rewards. What that meant is as a customer of Scotiabank, you had to choose between, ‘Do I want Scotia rewards?’ Which was travel gift cards, statement credits, or do I want a movie program? When we put this together, we now enable consumers to get the best of both worlds. And so, the way we think about it is it becomes a lifestyle program where we're really answering the consumer need. So certainly, there's a competitive overlay. But consumers have been asking for this. as I mentioned earlier, the more opportunities to earn and the more opportunities to redeem you're gonna create a natural connective tissue with your customers.
SM: And what were the big challenges in creating this new program? Was it finding the new partners? Was it technology challenges? What were the hurdles you had to overcome?
CB: Certainly, making sure the technology platform is sophisticated and easy to use. Number two is as we increase complexity, we also paid close attention to the operational stability. Making sure that we weren't passing that complexity on to our members. Making sure the operations could keep pace with a program that was going to go through rapid change. The other piece was the overall branding of the program. You know, for 15 years, Canadians have thought of Scene as the Cineplex movie program. And so, we were very conscious as we talked to Canadians about, what are we going to call this program? Should we continue with Scene? Do we go in a new direction? The beautiful thing about Scene is, it's got a tremendous amount of equity. When you say Scene to Canadians, they think about that movie going experience, which is a positive entertainment experience. And so, adding a plus is a bit of a nod to the future. It is suggesting that we are a program that is changing. And when we talk to Canadians, they love the idea of leveraging the heritage of Scene, but also looking at it from a plus to the future as well.
SM: And so far, it's working? I mean you're going into the biggest province now, Ontario. That launches this week, but you've rolled it out in several places in Canada already. What are the results so far?
CB: Yeah, I'd say so far, we're off to a very strong start. So in August of this year, we rolled out to Atlantic Canada, all of Empire brands. Then later on in September, we moved to the west. And you're right at the beginning of November, we'll be in Ontario. And then finishing off the Empire rollout next year in Quebec. And the response from Canadians in the regions we've gone live have been substantial. So not only new members that are joining the program in order to earn currency, but also earning and redeeming. A gain, we talked about during this particularly inflationary time, the ability to save $10 on a grocery bill is not insignificant when you consider the average Canadian shops for groceries two to three times a week.
SM: For sure. So last question, we’ve talked a lot about movies. What's your all-time favourite film?
CB: That's an easy one for me. My mom took me to see the original Star Wars when I was just a little man and so for me that still holds a very special place in my heart.
SM: All right, we will leave it there. Clinton, thanks so much for being here today.
CB: Pleasure.
SM: I’ve been speaking with Clinton Braganza, the Senior Vice President of Customer Loyalty and Partnerships at Scotiabank.