#306: Canada's Changing Loyalty Market & Canadian Automobile Association Insights

Steven Allmen is passionate about cultivating loyalty and has been a key pillar of the Canadian loyalty community for over 20 years.

With a career that includes advising some of the leading loyalty players in Canada such as Aeroplan and Air Miles, Steve is now working with the Canadian Automobile Association.

In today’s interview, he shares how the CAA is creating member engagement, such as their latest partnership strategy which is driving exponential growth, as well as how their overall proposition is evolving to continually delight customers.

Listen and enjoy learning about loyalty in Canada from my conversation with Steven Allmen, EVP, Strategy and Partnerships with the Canadian Automobile Association.

Show Notes:

Audio Transcript

Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals. I’m your host, Paula Thomas, and if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world.

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Hello and welcome to episode 306 of Let’s Talk Loyalty. A long overdue conversation with Steve Allmen, someone who is passionate about cultivating loyalty, and has been a key pillar of the Canadian loyalty community for over 20 years. His career includes some of the leading loyalty players in Canada. Such as Aeroplan and Air Miles. And Steve has also done some extensive consulting work directly with clients. In today’s conversation, he shares some of the dramatic changes emerging in the Canadian loyalty market. As well as the exciting work he’s now doing with the Canadian Automobile Association. It’s an incredibly impressive organization. Focused on creating member engagement and innovation in equal measure. So, you’ll hear insights on their latest partnership strategy, which is driving exponential growth, as well as how their propositions are evolving to satisfy changing customer needs. I hope you enjoy my conversation with Steve Allmen, EVP strategy and partnerships with the Canadian Automobile Association.

Paula: So Steve, welcome to Let’s Talk Loyalty. 

Steven: Thanks Paula. Great to be here. Much appreciated. 

Paula: I feel like it’s a long time coming. Steve. Uh, we’ve talked so much over the years and exchanged so many ideas and things, and finally, it’s great to chat and record with you. 

Steven: Yeah, I’m, I’m super thrilled to be here and congrats on all the success with, uh, Let’s Talk Loyalty. It’s been, uh, it’s always great to have a, a, a sort of neutral voice with a global perspective, uh, looking at some of the programs and, and you’ve had some great, uh, great folks on the show. So I’m, like I said, I’m very honoured to be here. 

Paula: Thank you. Thank you. I’m gonna quote you on that. There’s some nice words there. So very well put, better than I could say. 

Steven: No problem, no problem. 

Paula: This is great. Let’s get straight into it then, Steve. Um, you do have a very illustrious career, clearly in loyalty in the Canadian market. Um, uh, so we’ll be dying to talk about exactly the work and the various wonderful brands you’ve worked with. But let’s kick off by asking you my usual opening question. What is your favourite loyalty program? 

Steven: You know, it’s a great question and, and, and I, I was hoping you were gonna ask me. I get it asked all the time, and I said, most people say, what’s the best loyalty program? My favourite, right now, I’m flying again, I’m traveling again. And my favourite, without a doubt, uh, is certainly the Aeroplan program. I mean, I’m, I’ve been a member of Aeroplan since 2004. They’ve done a great job re, relaunching the program. So as my status is coming back, yeah. As I’m back in the lounge and I’m now zone two or one, uh, I just think they’ve done a bunch of things that are really good and, and even just being greeted on the plane as, uh, an Aeroplan member. So, kudos to the team at, uh, Uh, Air Canada and Aeroplan for relaunching and, and doing a really good job with it. So, um, I think they’re gonna have some interesting competition, WestJet’s about to relaunch and new airlines and new competitors and all the other things, but, uh, they’ve done a great job, so congrats to them.

Paula: Yes. Yeah, I, they’ve definitely done a great job and continue to, as you’ve said, Steve. Um, we did have Air Canada on the show in January, so Derek Whitworth was on with us, right. And he and I were just together at the Loyalty and Awards conference, in fact, in Madrid, um, perfect. Where Aeroplan just won again, another award. I’m not sure the exact title, but further recognition of the incredible work that they’re doing. So very exciting, and, uh, and I know Canada is what I would describe, I guess, is a very mature loyalty market. Um, and I would love, actually maybe if you would talk us through that, Steve, because you know, the, the whole Aimia story and the Aeroplan story, you know, has evolved quite dramatically, I think over the years. So, would we start there? Would you explain a little bit maybe about, I suppose, the Canadian loyalty market and your own career through all of those kind of dramatic brands and changes. 

Steven: Yeah, I, I feel like my career kind of parallels some of the changes in the loyalty industry. You know, Canada’s very, uh, it’s an interesting, uh, world. Uh, it’s a very large country. If you haven’t been here, please come. Uh, but it’s a very large country, uh, very diverse country. But we’ve got a couple things that have always worked very well for loyalty. Um, uh, five very large banks. That basically drive the bus, if you like, within the financial services.

Paula: Okay. 

Steven: Therefore, integrated network of payments, integrated network of credit cards, et cetera. Which again, are sort of a stability, you know, stabilizing factors in loyalty. Uh, we’re limited by a couple national airlines. We’re limited by some very large retailers, but we’ve got kind of this national reach, which really created the sort, the sort of the founding or the foundation if you like, for coalition loyalty, standalone loyalty, et cetera. So, Air Miles launched in Canada in 1992, so they just celebrated their 30th anniversary. Aeroplan’s been in business since 2004. We’ve got a national retailer, Canadian Tire, which has had paper money, literal paper, paper money for decades, and they’ve now created the Triangle Rewards Program. So, we’ve got these very large national programs with a very strong regional flare. And, and basically, you know, the plumbing’s the same, the branding’s the same, but you have a nice mix of, of regional players that support the business. Um, that’s how Air Miles was built. Air Miles was built as a national coalition, but truly is built on regional partners. Um, Canadians love their loyalty. They love their loyalty programs. They love the, the earning part, they love the redeeming part. Um, some may like to redeem for that, you know, bucket list, trip to Asia or a safari in Africa. But a lot of people like to redeem for free groceries, and you know, free gas and all the other pieces. So, the programs have done a really good job, in the Canadian marketplace. I think our population today is 37 million and most Canadians belong to two, if not three. I belong to about 40 loyalty programs, but we’re, we’re in the business. We’re in the business. Right. 

Paula: Total geeks. Totally. 

Steven: But, but most Canadians belong to multiple programs, and if they’re smart, they’ll play the game enough. If I want free groceries, I’m gonna join a grocery program. If I wanna travel, I join a frequent flyer program, but I think it’s also been built a lot on life stage. You know, young families behave differently than business travellers who behave very differently than, you know, teenagers. So, loyalty is kind of working its way through, uh, but it’s changing dramatically in the Canadian market. 

Paula: Really? 

Steven: Yeah.

Paula: How so? 

Steven: Well, you know, the, the, the seismic shifts that are happening. Uh, we talked a little bit about Aeroplan, as an example. They’ve done a great job sort of rebirthing themselves as a very much frequent flyer program, targeting that, uh, airline traveling consumer. Uh, you’ve got competition in the Canadian market for loyalty with respect to, WestJet. So, it’s sort of the two national airlines. You’ve got a regional player, uh, in Porter Airlines, which is again, trying to address sort of those short hauls, but they’re now starting to do code shares. They’ve got a loyalty program, but I can only go Toronto, New York, Toronto, Sudbury. I can’t go to London. 

Paula: Okay. 

Steven: I wanna go to London. I have to get on another airline. So, uh, the credit card market has shifted dramatically, uh, in the Canadian market. As you look at Air Canada, TD and CIBC with Visa buying Aeroplan out of Aimia and now running that program, you’ve got WestJet with a co brand relationship with, um, with RBC. I think the biggest seismic shift has been the growth of the PC Optimum program, uh, which is Loblaw, Shoppers Drug Mart and SO with PC Financial. You know, so that’s number one grocer, with number one pharmacy with a very large fuel partner with credit card at the heart of it. Wow. I don’t know what their numbers are, I don’t wanna quote, but they’re north of 15 million members. Very strong on the data side. Very strong on the branding, and a real love for it because it’s digital first grocery. The largest seismic shift has been the movement of, uh, the second largest grocer in Canada, which is Sobeys. 

Sobeys is a national grocer with, uh, four core brands. Sobeys, IGA, um, Safeway and then, uh, Thrifty Foods out West. And they were an anchor partner in the Air Miles program. And Air Miles is the sort of grandfather of coalition loyalty in Canada, and Air Miles has been running into some sponsor losses in the last 24 months.

Paula: Okay. 

Steven: Uh, Sobeys announced in, uh, June of this year that they were leaving the program and have doing, been doing a staggered rollout. They’re leaving the program and they’re actually joining the Scene+ program. Wow. So, Scene is the joint venture between Scotia Bank, Cineplex, and now Sobey’s is a, is a new owner in the program. So that’s a very much a seismic shift because you’re moving away from one coalition program. That is, you know, hopefully we need it to be as strong Air Miles, but I think that they’re, they’re struggling a bit to kind of see what their next identity is. And now you’ve got Scene+, which was a movie program, free movies, and entertainment. And now it’s about grocery and financial services and just exponential growth in the market. Um, they’re launching in Ontario, November 3rd. And from everything I’ve been hearing across the country, huge presence, like great POS, great signage, and everything else. So, you’ve got kind of the, the, the changing of the guard if you like. Um, so loyalty is alive and well in the Canadian marketplace, like really alive and well. Top of mind in the space, top of mind for consumers. Um, and, uh, lots of upside. 

Paula: I’m already looking forward to our follow up whenever that might be. I feel like I’m gonna need an update on all of that, Steve, so you’ll have to keep this updated. And the other one, yeah, the other one I noticed as well, um, in the Canadian market, again, a very proud Canadian brand is Tim Hortons. So almost like the QSR sector is coming on board, which it’s quite interesting, because I would’ve kind of, you know, seen them as quite a mature brand and you know, to resist investing in loyalty for so many years. And then I think they launched maybe a year or maybe even two years ago. 

Steve: Yeah, two years ago. Two years. 

Paula: Two years ago. Yeah. So, a relatively recent entrance into the loyalty space. 

Steven: Yeah, and it’s interesting. So, if you take the loyalty out of it and you put the QSR coffee category at the core, so Tim Hortons is a Canadian institution there, you can’t turn a corner in Canada without hitting a, a, like, like it’s, it’s almost become a vernacular in our language. You know, I’m going for a Timmy’s, I gotta go get a double-double, which for our global audience is uh, coffee with double milk, double cream. 

Paula: Got it. 

Steve: Uh, Tim bits, which are the, the little inside of the donut? The, the, the, the hole. 

Paula: Okay. 

Steven: We take the hole out and create this product called the Tim Bits. We even have one of our greatest Canadian exports, Justin Bieber, who’s got, uh, Bieber Bits.

Paula: Oh my god. 

Steve: Who knows? But it’s a very competitive market. So, who do they compete with? So, Tim’s competes, uh, morning day parts with Starbucks, with McDonald’s, uh, second Cup is another, uh, retailer. A lot of sort of, you know, um, smaller brands in the Canadian marketplace. Um, at lunch they would compete again with McDonald’s and, and any of the other, um, QSRs, uh, Dunkin Donuts is not in Canada, so that’s not sort of that big coffee chain, but Tim’s is, is kind of the heart and soul. Um, and so when they launched loyalty, they were launching loyalty, I think for a couple of reasons. One was, uh, obviously market share. Uh, capturing market share, the data that goes along with it. They went very much into a digital application. They linked into their, um, not as much free coffee, but you know, the ability to gamify. So, buy a coffee, get a donut, buy a coffee, get a donut, get something else. So, taking you through the journey. Yeah, but also creating the, the, the mobile app and the digital platform. Um, couple challenges; one is value proposition, two is people saying, why do I need it? I’m already loyal to Tim’s. And then the third part is, you know, they had a, some questions about data and data integrity and some other things. So, you know, it’s been a really interesting launch, but the reaction has been the growth of the McDonald’s McCafé program, uh, the, the real uptick of Starbucks now joining the Aeroplan program, doing card linking. And so, people are, are very loyal. I’m a Starbucks person. Yeah. I’m a Tim’s person. I’m a McDonald’s person. I’m a Starbucks guy. I’m not a big Tim’s guy. Mm. But it’s been really interesting to see where they fit. But it’s a standalone program. It’s not integrated with anybody else. It’s pure standalone. 

Paula: Got it.

Steven: So fascinating growth. 

Paula: And I know your field of expertise, Steve, is very much around that kind of partnership space. And fascinating to hear that Starbucks, for example, is, is doing card linking, for example, so the innovation, the McDonald’s launch in Canada and even if I’m not mistaken, I think McDonald’s launched in Canada before they launched in the US with their rewards program.

Steven: Yeah, they did. Yeah, they did. And they. And it’s a great, I mean, if you’re a very large, uh, global player, Canada’s a supermarket to do it. Why? Because, you know, it’s, it we’re that white space on the weather maps in the United States, nobody really knows what we do. Again, we’ve got an integrated, we’ve got a very, uh, integrated and, uh, up to date payment system. Phenomenal relationships across our, you know, uh, the POS integration, we got some great POS uh, organizations here. Uh, but you can do it in an isolated market, and you could actually do it regionally. So, you could launch in Ontario and launch something separate in BC and again, pick up the Quebec market, which obviously requires language, et cetera. So, I think there’s a great opportunity to do it. Um, Starbucks is, is fascinating to me because they launched with a Star Alliance member. And a visa issuer in Canada. And they’ve launched with Delta Airlines, which is not Star Alliance. 

Paula: Yes. 

Steven: And I thought, I think they had, they missed an opportunity to kind of create that linkage through Star Alliance, cause imagine me as an Air Canada frequent flyer going into the United States to be able to do something. So, I think they, yeah, they missed the boat. But it’s a, it’s an interesting, you don’t see an Aeroplan logo in a Starbucks location. It’s all linked loyalty behind the scenes. With the driver being credit card and conversion. So, I think it was a, again, as an Aeroplan member, I’m quite happy to earn Aeroplan points. Uh, but it’s all through my digital wallet at Starbucks, so that’s my entry point. Uh, when I’m trying to do it. So, I think they’ve done a really good job and it’s fascinating to see what they’re gonna, where they’re gonna go with it. 

Paula: Yeah. And just on your point about the isolated market, I can totally see that because actually Ireland is very similar.

Steven: It is. 

Paula: We have exactly that same, um, I, so I suppose safe space where brands can kind of enter the European market. We’re English speaking, highly educated workforce, lots of digitally savvy people and the infrastructure as well. So yes, we always had lots of brands coming in, going, we’ll just do it in Ireland, it’ll be fine, nobody will notice, it gets messed up. And then the big ones, you know, then they go to the UK and figure out, and language, of course, across Europe. So, that’s a very interesting point. So, um, and to your earlier point, actually, I have never been to Canada, so please God, that’s gonna happen.  

Steven: Please do not come in unless you’re a skier. If you’re skiing, come out and go to BC or Quebec. Great skiing. Uh, September is a beautiful time of year to come here. Beautiful time of year. Uh, it’s very hot in the summer, but Canada’s a spectacular country. 

Paula: Ah, for sure. 

Steven: Uh, with everything from. Oceans and rivers and mountains and sand dunes and trees and everything. So, a wonderful place to come and visit. So, you’re always welcome and I will be happy to be your host. 

Paula: Amazing. So, tell me, Steve, then, professionally, why loyalty? Why did you fall in love with our industry? 

Steven: Well, I actually started in the data world. Um, I actually got my, my start. I’m a, I’m a partnership and strategic, I’m a business development kind of really, but I started in the data world. I started in business data with a company called Dun & Bradstreet. I joined a company in Canada called Compusearch, which is now Environics Analytics, and that was clustering geo demography and micromarketing. Um, and so I understood the power of data. I understood the value of information as it related to how consumers make decisions, but also how marketers, um, you know, finance people, whatever else. Make business decisions, the right business decisions. So, with good data comes good decisions. With bad data, you may get bad decisions. 

Paula: Sure. 

Steven: The natural evolution was the loyalty space. Now, selfishly, I had a senior leader that I had worked for who went to work at Air Miles. I joined Air Miles in, uh, 1998, which is a very different time to run a loyalty program. We still had very large computer rooms with lots of blinking lights that were running our business. Today you can build a loyalty program on your phone if you really wanted to. So, very different time, but really sort of the high point of coalition loyalty, Air Miles was flying high. Aeroplan was really starting to grow and getting ready for future state IPOs. There was some consolidation in the industry, so I, I fell into the, the business. Um, I joined Hudson’s Bay as a retailer. Uh, who had a loyalty program and a lot of partnerships including an Air Miles partnership. So, I really understood the value of coalition loyalty, but I also saw the incredible power behind the data that you had from a retail loyalty program. 

Paula: Sure. 

Steven: Um, when I joined Aeroplan in 2006, lots of changes again in the industry, lots of competition, lots of new things. I mean, think about it, 1998, there was no scene program. There was no PC optimum program. There was no triangle. We didn’t even really have smartphones. We were still just starting to learn blackberry. So, lots, lots of change. Yeah. Um, when I joined Aeroplan, it was about helping them take it from the next level with retail programs, um, new models, new approaches. So, I just love the loyalty business and I love the relationship between the customer and the consumer. I love the value of the data behind. I love the economics, but more importantly, Paula, the passion of the people, particularly running the programs is just inspiring and on a global scale. Um, and so when I, when I left Aeroplan Aimia in 2014, I started my own business with my business partner, uh, Joanna Walker, who had an expertise in gift cards. So, we married partnerships in loyalty with gift cards, payments, and we ended up working for some phenomenal brands in the Canadian marketplace. Um, and really helping share some light on what everybody’s doing, but also start to look at what’s coming next. How do we look at marketing? How do we look at business to business loyalty? How do we look at business to employee loyalty? How do we look at digital loyalty? So, it drives my wife crazy when I stand at a cash desk and somebody says, you collect points. I’m like, you’ve got an opportunity to ask me the right brand. And I’ll say, yeah, I got all the points that you want that right here. So, she just does. So, you know. Right. I mean, when you’re in the business, you know.

Paula: Totally. Totally. And you’re right as well, Steve. I always feel that this, uh, industry is full of people like us who love to take care of people. Like we love to be loyal to our customers. We love to delight them. We love to see them responding and reacting and engaging, but very much with that, um, business hat on. And I’ve often said on this show, I do not know how, you know, um, outdoor advertising or TV advertising, people sleep at night because I don’t know how they measure their work or know whether they’ve done a good job, you know? Whereas, at least with ours, whether it fails or, or succeeds, we do have the data, we have the insights, we have the engagement. So, um, so I love to hear that coming through. And, and I’m really impressed that you’ve actually kind of now moved brand site, um, to work with another incredible Canadian brand. So, you’ll have to tell us the story. First of all, tell everybody where you’re working and how do they manage to, to win you over from your own business, It’s incredible.

Steven: So as one of my, one of, well, I’ll tell you a little bit of the backstory. One of our, through my company, Loyalty and Co. With Joanna, we, uh, started to work with CAA, which is the Canadian Automobile Association. Mm. AAA equivalent in the United States for our US, uh, members. And a number of other global clubs. We’re part of a very large organization called the FIA, which is also happens to run Formula One, but we have automobile clubs, uh, relationships in Europe, Asia-Pac, South America, Central America, and the United States. So globally, it’s a very large organization. So, I started doing some advisory work with the team, uh, uh, 2015, 2016. Really just a loyalty whisper is what I called myself, trends. 

Paula: I like it. 

Steven: What’s going on in the marketplace? Where does it fit? Where do we fit? Um, and slowly but surely, I started to do more work and in September, well, actually in June, but in September I agreed to join them full-time as, uh, EVP Strategy and Partnerships.

Um, and, and they’re a fascinating organization and a wonderful organization. So how did they win me over? They believe in loyalty, they believe in data, they believe in partnerships. And they really like me and they’re nice people. Um, so to me that’s just a, a, a perfect marriage. Perfect.

Paula: Absolutely. What’s not to love. Incredible. 

Steven: What’s not to love. Yeah, exactly. 

Paula: Um, I know you, you describe it, um, specifically I suppose as a membership organization. Um, and I think that’s, that’s critical. So, The, the, um, equivalent in Ireland. Again, I suppose I’m not a member here in Dubai, but certainly in Ireland we would have the AA the Automobile Association. I know it’s different acronyms in different countries and I have to say it’s a very, uh, very much a purchase that brings me peace of mind. So, for me, um, certainly when I was a member, um, we didn’t have a very robust, I suppose, partnership strategy or reward strategy that it seems that you do have for the Canadian Automobile Association. So, I’d love you just to, to talk through the membership proposition and maybe then exactly what you’re doing in terms of rewards and benefits for those members. 

Steven: Sure, absolutely. Happy to. So, so let me sort of paint the picture a little bit. So, CAA is a, um, uh, again, a very longstanding, trusted brand. We’re very proud to say actually, uh, there’s a great study that’s done out of the Gustavson, uh, team in, uh, Victoria, uh, BC and we are the Canada’s most trusted brand, three years running. Um, and, and that’s, that’s a great point of honour for us. Uh, we’ve been top 10, I believe, for at least five years, but, uh, number one for the past three, and not just number one holding, but number one growing. So, we’re very proud of that. Um, we’re actually a federated model, and what, what we mean by that is we have eight clubs across Canada. Uh, we have clubs in, uh, Atlantic Canada, Quebec, Ontario, three clubs in Ontario. Mm-hmm, um, uh, Manitoba, Saskatchewan, and Alberta and BC. Each of those clubs, operates in their own territory and are part of a federated group that rolls up into an umbrella brand called CAA. But we have BCAA, which runs our British Columbia Club. Alberta Motor Association, AMA, and then you’ve got various CAA clubs across the country. We have about six and a half, maybe 6.6 million members. Who have joined CAA. And, and they joined CAA for very different reasons. I love your description, Paula, of a piece of mind. So roadside assistance, um, flat tire, broken down vehicle, battery discharge, whatever else. Is kind of a, a core entry point for people coming into our program. Not everybody uses it, fortunately, but they know that it’s there and they know that we’re going to be there when they need us. More importantly, a CAA member, if they have the same issue in Ireland or in Germany or in Australia or in the United States, their CAA membership actually has a global view. So, they have peace of mind all around the world. And that’s really important because if I’m driving a lot of Canadians drive Toronto to Florida, if I’m in the middle of Tennessee and my car breaks down, I need to know that I’ve got coverage. So, the AAA CAA relationship gives reciprocity across the border.

Paula: Nice. 

Steven: So that’s a great, that’s a great opportunity for us. With a large membership base though, what you also start to have the opportunity to, to do is grow your business. So over time, our business has evolved. We’re a very large insurance company. So, CAA insurance operates differently across Canada, but we offer home and auto. We offer property and casualty insurance, depending on how you describe it. Um, life insurance, travel insurance. We’re even offering pet insurance, so, oh, my dog who’s lying behind me, we could insure him. I don’t know if he gets a CAA card, but we would insure him. Um, we’re also a very large travel business, so we have travel agencies, uh, tremendous relationships with uh, Disney and cruise lines and airlines and package vacations across the country. And again, a little bit of a difference depending on where you are in our country. Um, but we also have some other businesses too. In our BC market, we own and operate a business called Evo, which is car sharing. So, we actually own a car sharing business. 

Paula: Fantastic, yeah

Steven: Um, we have a, we have a bike share, uh, relationship. We, even if you get a flat tire on your bike, we will look after you.

Paula: Oh, my goodness.

Steven: Um, we also own a business called Expargo is, uh, OEM service. So, when I buy a new car, uh, it may be covered by CAA’s roadside assistance. So, so lots of tentacles out into the marketplace to add value to our membership. The natural evolution is what else can we do? So, we want to create benefits, for our members to join CAA.

Paula: Sure. 

Steven: So, we, we have a, um, a savings and rewards program, which has evolved over time, but basically being able to offer great benefits for, if my car breaks down, we have what are called double ARS approved Auto Repair Service. So, when I walk in and there’s the CAA logo, I, I have the trust that they’re a part of us and I get great value. We have a phenomenal relationship with Napa Auto Parts across North America, actually, not just in Canada, and again, where I can get some great value. Best Western Hotels, which is again a North America wide, has the CAA and in the AAA logo. So, when I walk, walk in, I may get better value for being a AAA member or better value for being a CAA member than anybody else. I’m likely still earning Best Western Rewards because that’s their program. But I get great value. So, it’s as much of a, a discount and benefit program, but it, it is pure loyalty, but not loyalty in the sense of earn points, burn points. It’s loyalty from an engagement standpoint. 

Paula: Got it. 

Steven: So, we also have a deferred program. It’s called CAA Dollars, which allows me to earn a dollar based on a purchase which goes into a bank account. Most people may use that to pay off membership or get discounts on travel. But it’s sort of the, the double-edged sword discounts and deferred. Again, in a very crowded loyalty market in Canada, we have to spend a lot of time promoting that and marketing. 

Paula: I was gonna say, yeah, education is obviously critical. Like, you know, with that, um, I don’t wanna use the word complexity because actually I think it’s been so long established from what you’ve said, but it sounds like something you need to keep communicating because you’re continuing to grow those.

Steven: Exactly. The one really interesting thing for us, and it’s good news, bad news. Uh, our members carry their cards with them. So, our members carry that piece of plastic that says CAA. And the reason they do it is because unlike some other automobile programs, we actually protect the driver. The member, not the car. So, whether I’m driving my sister’s car, my friend’s car, my own car, yeah. If I have a problem, CAA is there to look after me. So, our members carry the card with them. Magstrike, barcoded bin range card, which means that we can now integrate. All of our partners are integrated with us from a data capture standpoint where we want to understand the behaviour of our member at that retailer. So, we do really integrated data capture, which meant we needed to build a very robust platform behind the scenes, to do all that stuff. So, we’ve got good infrastructure and capability. That’s, that’s actually, uh, a, a platform that’s being used in a couple other parts of the world. Um, our newest partner, which is a really interesting play for us, is in, uh, November of 2021 and March of 2022, we launched with Shell as a fuel retailer. Uh, nationally, except the province of Quebec and Quebec was because they had a pre-existing relationship, and they are a benefits program for our members where they earn 3 cents off per litre. Instant rollback at the pump. Swipe my card. I instantly got 3 cents off at the pump. Wow. In unlike Dubai, but in in Canada where fuel prices are high. Um, 3 cents is a meaningful, and it’s a table stakes business in Canada. There’s a number of other players doing similar things. But it’s a great fit for us because our members are drivers. And because they’re drivers. We’ve got this phenomenal relationship with a great retailer. That’s offering us discount, uh, at fuel discount, on the car wash, discount in the convenience store, but also offering benefits for our fleet program, for our contractors and for our employees. So really nice deep and wide relationship with them. But they look at us as a discount and benefits program. Mm-hmm. and partly because they’ve got a pre-existing relationship with Air Miles. So, it’s been, it’s been really interesting to see the evolution. We’ve got great fits in dining. We’ve got a phenomenal dining partner, hotels, entertainment, travel insurance, as well as now fuel and, and mobility. A really nice mix of partners. Always looking for more, but the right sort of strategic partners. But it’s about driving, um, engagement with our members because our ultimate goal is to acquire and retain. If we acquire new members and retain our existing members, our business model serves itself over time. Typical of every other membership program. Get as many as you can, but, but hold onto them and, and make sure they’re loyal to your business, 

Paula: Yeah. My goodness. So many things I can, uh, pick up on Steve. Um, the first one, I suppose again, is just to acknowledge the incredible. Brand value, the trust, the extraordinary work that has been done, of course, to deliver. And that only comes through time and through, I suppose, earning customers trust, you know, 

Steven: It does. 

Paula: Independent of rewards or, or discounts or strategic partners, you know, getting the basics right I think is something that we all know as loyalty professionals, even if we don’t always control it. It’s, it’s the fundamental basic starting point. So, so…

Steven: Absolutely. 

Paula: Yeah. I, I just think that’s incredible. I don’t think enough of us measure it or, or maybe have enough, I suppose, influence or connection with our brand partners. Um, I was just doing an interview exactly about that recently, but I know you measure a lot of different KPIs as we all do. So, I’d love you to share some of those. You gave them to me last time we spoke Steve, and they’re incredibly impressive. So, I’d love to know, what do you measure and what do you see as success for the CAA? 

Steven: Yeah, so it’s a great question. So, there’s, there’s sort of three core things that, that we measure, and one really core tenet that we live by and the core tenet that we live by is always driving value for our members.

Paula: Nice. 

Steven: So, when we do a partnership, when we do a, um, any kind of relationship, it’s about value back to our members in order to make them sticky. Right. Sticky’s a great word. Right. 

Paula: Great word. 

Steven: Because of the way our business is structured, our roadside business is actually a not-for-profit. So, we are not for profit organization. So again, if we drive value back to our members, yeah, that will make them more loyal to us. But we also have to be there when they need us. 

Paula: Of course. 

Steven: Um, so we have a couple things. So, value to the member is one, number one. Number two would be, uh, membership growth. So, we’re always looking at how do we grow our business. We’re six and a half million members, roughly. A little bit more. We held strong during the pandemic, which was a great testament To a bunch of things that we do, and we actually saw growth. Um, our growth numbers vary by club that were up year over year, right across the board. Not one of our clubs had any declines. I can’t share the individual, uh, numbers, but it’s, it’s, it’s single digit, uh, blended, uh, growth year over year, u,h, with some phenomenal results regionally, and we’re very proud of that. Um, remind me to talk about our, our, our new rewards, uh, card too before I forget. 

Paula: Sure. 

Steven: Um, the second thing that we measure is retention. So, renewal rates, uh, we have a significant, significant focus on making sure that people come back. Um, and we know like every business, getting somebody to sign up is one thing, getting them to sign back is something different. 

Paula: Totally. 

Steven: Right, every industry is the same. So, we’ve got, you know, we’re in the high eighties to low nineties on a renewal rate. Blended across the country. 

Paula: Incredible.

Steven: And it varies by clubs. Uh, some clubs a little bit higher, um, some clubs, depending on where their approach is or, or their size. Mm. And we have clubs that are 2 million members, and we have clubs that are 150,000 members. So quite a, quite a range. 

Paula: Sure. 

Steven: Um, and then the last thing that we measure is net promoter score. Uh, and net promoter score is great, there’s a lot of debate about it, whether it’s the right measurement, but, but it’s still something that we see. And I was actually just at a, at a integrated meeting, uh, last week in Nashville and we were talking about it. And we’re running net promoter scores anywhere from, again, you know, uh, low seventies to low eighties. Now, from a net promoter score standpoint, I’ve seen some high ones. But consistently that number is spectacular. And that comes across delivery, of course service. That comes across, um, mix of product and, and, uh, brands. It also comes from the, from the innovation or, or, or growth. And so a net promoter score to me is quite an interesting, uh, measurement of success. 

Paula Totally. 

Steven: Um, and it takes a long time to build a good net promoter score. It takes minutes, minutes to put that at risk. So, we’re very focused on how we’re continuing to innovate and grow. To make sure that we keep that number solid.

Paula: Well, innovator is one of my favourite words, Steve, as you probably know from listening to the show. So, um, so, and we will talk about your new rewards card, but just to pick up, because you’re absolutely right. That is a spectacular NPS score. And I remember when I first learned about, you know, how to calculate net promoter score and really to remember that the range goes from minus a hundred to plus a hundred. So, it’s not just 78% or whatever. It’s actually, you know, kind of double if I use a simple, um, explanation. So, I do think that that’s absolutely extraordinary in my own, I suppose top of mind recollection, I think only Apple has a net promoter score in that kind of range. Um, I think there’s something, something, you know, around 80, so absolutely incredible to have that performance. And I always do think it’s, you know, it’s the ultimate measure because, it is, you know, somebody going, I will promote this brand. I will personally put my reputation on the line. So, so I like the, the thinking behind it and I don’t know if you would’ve heard, for example, we did have the, the creator of net promoter score on Let’s Talk Loyalty, um, last year, um, Fred Reicheld and Fred was talking about his latest, I suppose, evolution of it and, you know, maybe we could talk about it in another time, but you know, it, it, it really is super interesting for, for him to be saying like you, it’s not perfect. Nothing in the world is perfect. But then he has this new idea called the earned growth rate, which is essentially, converting that net promoter score into measuring the referral. You know, so when a new member does sign up, also tracking that, because he described it as the accounting twin, because I think what net promoter score sometimes is criticized about it’s, it’s the fluffy stuff, it’s the marketing people and it’s the brand and it can be dismissed, I think by, by financial people. So, So I love that you’re measuring that, and I love that that model is also evolving. So yeah, thank you for sharing all those incredible statistics. 

Steven: Yeah, you’re welcome. 

Paula: Yeah. Tell us about your new rewards card then. 

Steven: Well, what we’ve done is it’s, it’s very interesting. So again, we’re a, we’re a roadside assistance business. Listen, vehicle purchases, driving habits are changing dramatically. Uh, we had the pleasure of having our, our partners from our Norwegian club, uh, in Ottawa last week. They were talking about where Norway’s going with electric vehicles, which was stunning. 

Paula: It’s amazing. 

Steven: Absolutely stunning. 90% of all new cars sold in Norway are EVs. So, so driving habits are changing. Uh, we need to evolve. How you tow an EV is different, how you think about repairs on EV, they wear tires faster. But we also need to evolve. One of the things that a number of our clubs are starting to do is offer membership in CAA without roadside. And why is that really important? So, what do I get when you sit there and say, well, why would I ever join CAA and not get roadside assistance? Yeah. Uh, there are people that are urban, urban, uh, commuters, that take transit and ride their bike. There are people that are car sharing, there are people that are doing a whole bunch of different things. So, we have a number of clubs across the country that are looking at, uh, every day or community based, uh, programs. And the price is, is significant. Very, depending on the, the market. Mm. But as a CAA, non-roadside member. I have the ability to, um, I may be driving a new vehicle, so I don’t need roadside assistance. But I still want to get 3 cents off per litre at Shell. I still want to get a great rate on my insurance. I still want to get a great, uh, value proposition for travel. So, this trusted brand of CAA offers all of these things. That is like, so if I paid $30, and I’m getting a $100 in value, why wouldn’t I do it? And as I transition down the road to a vehicle that is no longer covered by roadside Then I can just make my move. So, it’s a new play on loyalty more so than rewards, but loyalty, um, going away from what is our core business. But it’s an evolutionary step for us. So, it’s very new, it’s very fresh with a bunch of the clubs, uh, they’re very excited about it. And the numbers from one of our clubs have been spectacular number of acquisition. Uh, there’s no renewal numbers or net promoter score on it yet cause it is so new. 

Paula: Sure. 

Steven: The acquisition numbers have been really dramatic. Um, and what’s equally important, I’ll go back to how I got my start in loyalty. It’s the data part. So now we know who you are. We know where you live and we know what you’re doing and, and we can now communicate that with all the respect and privacy guidelines that we follow. To make sure that we’re talking to you as a, as a consumer and as a member. So, I’m very excited about it because it creates a new avenue. And a new opportunity for relationships that we haven’t had before. Incredible. Cause we’re not just roadside assistance.

Paula: And from a branding perspective, what is that product or program called? Is it still the, the CAA? 

Steven: It’s still CAA. A couple of clubs are calling it Everyday Rewards or Everyday Membership.

Paula: Got it. 

Steven: Um, there’s a, there’s a number of others that are looking at community as the focus. 

Paula: Nice. 

Steven: Our Alberta Club is really focused on local business, local community, local engagement. So, they’re putting more of a community spin on it. Um, a couple of the clubs, I don’t know, have chosen a name yet. Uh, but every day is one thing that they’re looking at. Um, so I’m really excited about it because I think it’s, like I said, I think it’s a new, it’s a new avenue of engagement and a new avenue of acquisition. And that’s, that’s pretty cool.

Paula: Absolutely. Well, I mean, it’s never gonna be dull where you are, uh, involved. That’s definitely what I’m figuring out, you know, between the incredible Shell partnership and that exponential growth that you told us about and all of the other partnerships you’re exploring. It feels like there’s just a never ending, um, set of opportunities, I guess, for the brand in, in the country. 

Steven: Yeah, no, a hundred percent. And, and one of the things I’m very proud of, and one of the reasons Paula, I’m very thrilled to be on your podcast is because the global community of loyalty, we all learn from each other. So, we look at, you know, what programs are doing. I look at the incredible success of what David Canty and Bilt have done in the US. Like just a stunning, stunning program. Um, you know, U Rewards in, uh, Asia-Pac. And, and the team that have built that and just how we learn and share and grow from each other is really important. So, I, I think there’s nothing but up as we, as we look at the potential for our program, but also the changing landscape in Canada. Uh, we’ve got to make sure that we’re, we’re well positioned to work with other partners and be innovative and be creative. We know what we do well, and we know where we need to have good partners to support us.

Paula: Super, super. And you’re absolutely right. I mean, my whole purpose on this show is educating myself first and foremost, very selfishly. Yes. Um, obviously sharing that education and the inspiration. So, you know, always my pain point running a loyalty program in Ireland was feeling frustrated that I just didn’t know what, what could be done. So, I wanted the inspiration and hearing from people like you who’ve done the thinking. Figured out the next step and then at least we can all evaluate. But yeah, the inspiration is the first point. So, um, so very exciting time. So, listen, that’s all the questions we have time for from my side. Anything else that you wanted to mention, Steve, from your side before we wrap up? 

Steven: You know Paula, not really. I think we’ve covered a lot today. I think the biggest thing for me is, you know, we haven’t really written the future yet. If you remember back to, back to the future part three, when he said the future hasn’t been written, we don’t know what’s coming next. There’s a lot of global pressures on everybody. From a financial standpoint, from turmoil, and, but the market’s changing. As consumer behaviour changes, as the financial services market changes, we just need to continue to stay innovative and, and, and, and look to the future. I’m really excited about the future of, of both CAA and loyalty in Canada. And I’m, I’m just so honoured to be part of the industry and part of a, a great, um, you know, a group of people that are industry experts. I have some great friends around the world who are always happy to share, and I think that’s the biggest thing. We got to learn from each other. Yeah, continue to grow and I’m super excited about where the future is, so I’m very proud to be part of this industry.

Paula: Wonderful. Well, as I said, I’m already looking forward to the next conversation, Steve, so thank you for your time today. Steve Allmen, EVP of Strategy and Partnerships with the Canadian Automobile Association.

Thank you so much from Let’s Talk Loyalty. 

Steven: Thank you, Paula. 

This show is sponsored by the Wise Marketeer, the world’s most popular of loyalty, marketing news, insights, and research. The Wise Marketeer also offers loyalty marketing training through its Loyalty Academy, which has already certified over 245 executives in 27 countries as certified loyalty marketing professionals.

For more information, check out thewisemarketeer.com and loyaltyacademy.org.

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