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Canadian Banking Giant Unleashes Credit Card Point-Of-Sale Loyalty Program

Royal Bank of Canada launched a credit card customer loyalty program in an attempt to boost customer usage of the bank's co-branded Visa Gold and Visa Platinum credit cards. Electronic marketer Ernex Marketing Technologies, a Royal Bank of Canada wholly owned subsidiary, is managing the pilot campaign.

The program, which was launched at the start of the month, is initially being targeted to 60,000 cardholders in the Vancouver region. Plans include targeting the program to Royal Bank's 6 million cardholders.

Ernex Marketing, Vancouver, British Columbia, sent direct mail pieces to the 60,000 cardholders at the end of last month. The marketer will reinforce the program by attaching a reminder to the cardholders' next account statement and will attach additional reminders to November statements.

The program is divided into three promotions: the Ernex Points Multiplier, the Ernex Custom Coupon and the Ernex Swipe 'N Win.

The Points Multiplier is a program in which cardholders receive Royal Bank reward points when they buy at participating locations. Points can be used to purchase a variety of retail items from a Royal Bank catalog. Customers are informed on their receipts of the points they earned and are notified of an incentive to increase points for repeat visits to the same merchant.

“On the first visit to a retailer, a customer may earn 100 points, but every time they repeat visits within a certain time period, their points are multiplied,” said Debbie Douez, director of card programs at Ernex Marketing Technologies. “This points multiplier is a loyalty program within a loyalty program. Not only will it influence cardholder loyalty to Royal Bank, [but also] the repeat purchase feature will increase customer loyalty to participating retailers.”

Consumers who participate in the Custom Coupon program receive discounts or rebates from participating merchants when they make a repeat purchase. After making an initial purchase, consumers are notified on their receipts about possible discounts for their next purchase. Retailers can determine when the consumer must make a purchase and how much money they must spend in order to receive a coupon.

“A retailer may decide to only allow consumers to receive a discount on Monday at lunch hour when business is generally slow,” Douez said.

The Swipe 'N Win program, which will run for three months, includes more than 150 prizes. Upon making a purchase, consumers are notified of their prizes on their receipts. A grand prize trip to Hawaii will be awarded at the end of the campaign in November.

Ernex Marketing has signed 75 local merchants to the program. They are divided into dining, golf, retail and travel.

“Because the Ernex program records all points on the cardholder's account, consumers can receive discounts without having to furnish paper coupons,” said Marlene Thompson, vice president of value-added programs at Royal Bank of Canada.

“Affluent consumers that use Visa Gold and Platinum cards may feel uncomfortable showing coupons. Also, this integrated points system speeds up the purchase process because it eliminates the cashier's need … to process a paper coupon.”

The marketer plans to work with other Canadian and U.S.-based credit card marketers on similar loyalty campaigns.

“We are signing higher-end retailers to target the more affluent demographic that uses Visa Gold and Platinum cards,” Douez said. “Individual merchants typically don't have their own loyalty programs and are a good target for this campaign.”

The marketer is initially working with individual merchants to test the program, but it plans to sign deals with larger national and multinational chains.

“The Royal Bank program will assist us in getting more repeat customers,” said Manuel Lau, vice president of sales and marketing at Best Western Coquitlam Inn, Coquitlam, British Columbia. “The real-time response feature of the program should save time and eliminate paper trails associated with traditional loyalty programs.”

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