Loyalty Programs in Mexico

Part
01
of two
Part
01

Loyalty Programs in Mexico

Examples of popular loyalty programs in Mexico are Club Premier and Pay Back. Retirement Miles, a rewards program launched by Vitalis in 2017, aims to help workers to accumulate points/rewards upon consumption of their products and add this to their retirement fund.

RESEARCH STRATEGY

Information about loyalty programs in Mexico are not as robust and this could be caused by language barrier in which most articles are written in Mexican/Spanish and attempts to translate them more often than not results in getting the initial concept/idea lost in translation. However, credible sources such as Oracle, Nielsen, and Loyalty Academy Org have published a number of reports in which the general landscape of loyalty programs in Mexico could be deemed. Oracle and Nielsen have both published reports on loyalty programs and a few highlights from these reports are related to the loyalty programs in Mexico. Loyalty Academy Org had published a 1436-page Loyalty Guide document into which two of the most popular loyalty programs in Mexico are presented: Pay Back and Club Premier.

Based on the "Loyalty Guide" published by Loyalty Academy Org, loyalty programs in Mexico that are popular are mostly "coalition loyalty programs" or multi-brand loyalty programs, into which different brands/companies are working together to provide loyalty programs/rewards programs to their members. Below is a list of key findings on the loyalty program landscape in Mexico.

The information that we were unable to find is the trends in loyalty programs. We started our research by exploring companies' websites, annual reports, press releases of loyalty programs in Mexico such as Club Premier and Pay Back to get an understanding on how their loyalty programs have been evolving since their inception. Unfortunately, these companies are private and their financial disclosures are not found online.

We also tried searching articles and press releases about trends in loyalty programs from mainstream media outlets in Mexico such as Forbes Mexico, El Financiero, Marca, Milenio, and Diario de Queretaro, among others but we did not find any information regarding these loyalty programs (Club Premier and Pay Back or other loyalty programs in general). We also searched through other reports, this time on a global scale, that might contain the information requested regarding trends in Mexico's loyalty programs.

Nielsen and Oracle have outstanding reports in regard to loyalty programs and some insights on these reports include the Mexican landscape. However, the reports mainly focused on what consumers are looking for on their loyalty programs and not necessarily on how loyalty programs have evolved through time. PwC has a study on Mexican consumer and their loyalty but the report did not touch on loyalty programs but only on brand loyalty in general.

Lastly, we broadened our initial research to the last three years (2016-2019) to get other insights that might be helpful in triangulating the missing information but this scope still did not yield the information needed. We went as far back as five years (2014 – 2019) but unfortunately, the information was still not found.

Note: Media articles are mostly written in Mexican/Spanish and the idea/concept might have gotten lost in translation when the documents were translated into English, hence the lack of information.

LOYALTY PROGRAMS IN MEXICO

According to a 2016 Nielsen report, Latin America has the lowest participation rate in loyalty programs and only 32% of Mexican consumers are members of any loyalty program. The most common way Mexicans indicate their loyalty program membership is by scanning a card at the store. 76% of Mexican loyalty-program members find "mobile-payment integration" as appealing, 69% of Mexicans find store-specific mobile apps as appealing, and 59% find third-party apps that "consolidate loyalty-program information" as appealing. On the other hand, the use of registered phone numbers is considered by Mexican as their most popular option when allowing access in their loyalty account.

WHAT PUTS OFF MEXICANS FROM JOINING LOYALTY PROGRAMS?

According to a 2018 Oracle report, the following are the reasons why Mexicans are not keen on joining loyalty programs:

TOP THREE REASONS WHY MEXICANS LEAVE A LOYALTY PROGRAM

Based on the same Oracle report, Mexicans are said to leave loyalty programs due to the following reasons.

EXAMPLES OF POPULAR LOYALTY PROGRAMS IN MEXICO

PAY BACK

Launched in September 2012, Pay Back Mexico is a "state-of-the-art platform that enables digital technologies, performance marketing and sophisticated CRM" as part of the American Express Group. Pay Back members can accumulate points from its more than 5,000 affiliate stores that include Santander, Petro 7, Hertz, Interjet, Mission Hostels, etc. The platform can be accessed via the Pay Back Wallet and their new Pay Back mobile app.

CLUB PREMIER

Club Premier is Mexico's leading coalition loyalty program boasting over four million members. The loyalty program is the operator of Aeromexico's Frequent Flyer program. Aeromexico is Mexico's flag carrier. Club Premier members can also earn Premier points from other affiliated brands such as SkyTeam™ Airlines, American Express, LAN and Copa Airlines, Aeroméxico and a bevy of large hotel chains and car rental companies.

VITALIS' RETIREMENT MILES

Retirement Miles, a rewards program launched by Vitalis in 2017, aims to help workers to accumulate points/rewards upon consumption and add this to their retirement fund. The app was only made available in March 2018 and to date, more than 1,000 users already signed up for the program. The program is backed by the Mexican government and Mexican Employers Confederation (Coparmex) and other organizations are starting to add the Retirement Miles to their strategic plans. (Source 6)

Part
02
of two
Part
02

Loyalty Programs in Mexico: Customer Preferences

In this study, we found that some of the most important features of a loyalty program for Mexican consumers include direct discounts, free products or gifts, free shipments for online purchases, exclusive access, and special sales. Below is a detailed explanation of our methodology and findings.

METHODOLOGY

We initially started the research by searching for relevant information regarding the most important features of a loyalty program for Mexican consumers from credible online sources such as InformaBTL, TDU, Wow Rewards, Mercado Libre Mexico, and many more. From these sources, we were able to find and provide five important features of a loyalty program. We then attempted to look for examples of companies that have these features in their loyalty programs. Regarding the importance of each feature to Mexican consumers, we could not find any public information available.
We attempted to search for the importance of each feature by looking for online articles that may contain information regarding surveys conducted to Mexican consumers pertaining to loyalty programs. However, we could not find the required information. Next, we tried to search for online reports on loyalty programs in Mexico. Unfortunately, we could not find any publicly available information, and some sources are blocked by paywalls. Lastly, we looked for the official websites of companies that provide each feature to determine the reason why these companies focus on giving those rewards and why Mexicans consumers want the features. However, we could not find any public information available. Based on our research efforts, we assumed that Mexican consumers consider all these features important for the same reason. We found the required information regarding the importance of features to Mexican consumers from InformaBTL.

MOST IMPORTANT FEATURES OF A LOYALTY PROGRAM

Mexicans feel that overall rewards from loyalty programs are important because these increase a company’s appeal. Flexibility and use of these rewards are also important to them.
DIRECT DISCOUNTS
62% of Mexican consumers prefer to be given direct discounts in prices. TDU has a loyalty program in which over 10,000 companies are affiliated. This feature offers direct discounts to consumers. ALSEA has a loyalty program called WOW Rewards that offers direct discounts to consumers on ALSEA’s group of restaurants.
FREE PRODUCTS OR GIFTS
62% of Mexican consumers prefer to be given free products or gifts for their purchases. Cinépolis has a loyalty program called “Club Cinépolis” where consumers can have free tickets to the movies when they are new to the program, every Tuesday, and all their birth month.
FREE SHIPMENTS FOR PURCHASING PRODUCTS ONLINE
49% of Mexican consumers prefer to be given free shipments for buying products online. Mercado Libre, with its loyalty program called “Mercado Puntos”, provides its consumers the opportunity to claim free shipments in their online purchases.
EXCLUSIVE ACCESS
28% of Mexican consumers prefer to be given exclusive access to promotions or new products. Citibanamex, with its loyalty program called “Citibanamex Priority”, enables consumers to have exclusive access to events and VIP rooms in airports.
SPECIAL SALES
13% of Mexican consumers prefer to be given special days for sales and promotions. Citibanamex has Citibanamex Priority in which consumers are allowed to buy tickets to events one day before the other people.
Sources
Sources

From Part 01
Quotes
  • "Eighty-four percent of Venezuelan loyalty program participants say mobile-payment integration is somewhat or very appealing, and 76% of Mexican and Brazilian respondents and 73% of Colombian respondents rate it as appealing. These same countriesalso stand out with respect to store-specific mobile apps. Three-quarters of Venezuelan (75%) and 69% of Mexican and Brazilian loyalty-program members rate these apps as appealing. In addition, six in 10 Brazilian, Mexican and Venezuelan respondents (60%, 59% and 59%, respectively) say integration with third-party apps that consolidate loyalty-program information is appealing."
Quotes
  • "Retirement Miles is in the process of formalizing partnerships with leading brands and companies that have committed to contributing to the pension funds of workers who consume their products, much as a loyalty program works."