Canadian Tire Money is an iconic brand loyalty program.

Brand Loyalty: Canadian Tire Money

In Brand Promotion by Distility20 Comments

Canadian Tire Money is an Iconic Brand Loyalty Program

Back in 1958, Canadian Tire launched a visionary loyalty program. It started giving its customers Canadian Tire Money equal to a fixed percentage when they used cash at Canadian Tire stores. To this day, Canadian Tire Money can be used like cash by customers on future purchases.

To call the Canadian Tire Money program successful would be an understatement. Canadian Tire Money is iconic. It has long been part of the Canadian lexicon. You would be hard pressed to find a Canadian who doesn’t know about the Canadian Tire brand and who doesn’t have a cache of Canadian Tire money in their wallet, a drawer or their glove compartment.

The Canadian Tire Money program pre-dates the now common brand loyalty programs that feature some sort of a brand currency or points. It has become standard fare for loyalty programs to consist of a points card which tracks spending and offers a discount, rebate, a “free” flight or reward merchandise once enough points are accumulated. Up until now, one distinct feature of the paper Canadian Tire Money program is that, unlike the modern digital age loyalty programs offered by many retailers, customers don’t need to sign up, don’t need to carry a plastic loyalty card and don’t have their shopping habits tracked.

On February 15, 2012, Canadian Tire announced a change to the Canadian Tire Money loyalty program. The changes can be seen as modernizing their brand loyalty program, but, with such a successful program, we do think that it is wise that Canadian Tire is approaching the changes with caution and is introducing changes slowly using a pilot project approach. The new program – Canadian Tire Money Advantage program – launches as a pilot program in Nova Scotia on February 24, 2012 offering customers two options.

  • Customers have the option to collect Canadian Tire Money Advantage points electronically with a new loyalty card or key chain fob.
  • Customers not participating in the program can still collect Canadian Tire Money in paper form as it has existed for 54 years.

Time will tell if the Canadian Tire brand will be strengthened or weakened by its brand loyalty program change. The key to success of any loyalty program is thinking about customers, and ensuring that customers are kept in mind when implementing significant changes. The Canadian Tire approach to changing their brand loyalty program includes three important aspects for brands to consider before making a change to their brand loyalty programs.

1. Brands need to be careful not to alienate their loyal customers and brand fans.

A brand loyalty program is about customer retention and loyalty, and forcing customers to adopt a significant change risks customers deciding to try out competitors. Giving customers the option to stay with the old is a good way to minimize the risk of alienating loyal customers. Customers prefer to make choices for themselves and not having changes imposed on them.

For the time being, Canadian Tire is not getting rid of paper Canadian Tire Money.  Customers can choose to continue to receive and use the paper Canadian Tire Money. As a result, customers, who don’t want to sign up for the new program, don’t have too.  This will also ensure customers who have a stockpile, drawer or glove-compartment full of the stuff don’t get up in arms about having their money become obsolete.

2. Brands changing a loyalty program are wise to offer customer experience enhancements.

The new loyalty program sticks with the idea of Canadian Tire Money, but offers two enhancements.

  • The convenience of collecting and tracking it on a loyalty card or key fob. This is an enhancement since storing, finding and remembering to bring Canadian Tire Money to the store is a customer pain point.
  • Canadian Tire Money will be given out at a higher percentage for qualifying purchases collected on the new Canadian Tire loyalty card or key fob, then if the Canadian Tire Money is collected in paper form.

3. B2C brands are wise to get actual customer feedback before a full-scale launch.

Canadian Tire is using a Pilot Program to test before any Canada-wide launch. This is wise. Changing a popular and iconic loyalty program is not without risks. Customers will quickly realize that the new loyalty cards and fobs will allow data to be collected about their shopping habits. The Canadian Tire paper money system did not require customers to sign up, subject themselves to data collection and allowed the paper money to be given to others. This lack of customer data collection lends a real pre-digital age charm to the current Canadian Tire Money program. Overall, we do believe that many brands risk customer back-lash as their personal data is collected, aggregated and used by brands for targeted marketing and sales intelligence purposes; it is insidious how much data is being collected on consumer shopping habits and how little is given in terms of loyalty points (which can also be seen as paying consumers with their own money) in return.

The new loyalty program will be initially launched as pilot program in Nova Scotia. Having devised its loyalty program modernization, it makes sense to get actual customer feedback. A pilot program allows Canadian Tire to do that and make changes or even abandon a full-scale roll-out if customers don’t like it.