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Brad Breininger & Marko Zonta

Zync - Journal | Loyalty vs data?

When does the cost of privacy outweigh the benefits of points and perks?

Loyalty vs data?

Loyalty programs allow us to pick up rewards with our coffees, trips, and clothes – and they also allow companies to gather data about us and our purchases.

What data are we willing to share? When does the cost of privacy outweigh the benefits of points and perks?

We cover TimHortons, Aeroplan, and how loyalty and data both play an important part in building brand trust. 

Join our Zync brand experts as we discuss these questions – and more – in this week’s episode of #EverythingIsBrand. For more on brand, connect with us through zync.ca

Also available on:

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Recorded on June 15, 2022.


Brad Breininger: 0:00
Hi everyone, and welcome to this week’s everything is brand. This week we’re asking the question, what’s more important data or loyalty? So there’s been a lot in the news lately about loyalty programs, particularly Tim Hortons, who was holding on to data that people had provided in their app, even when people weren’t using the app. And it kind of made us think of the question. I mean, a lot of brands are trying to collect data. And they do that through very strong loyalty programs. But ultimately, what’s more important, the brand loyalty or the data that they’re getting from their customers? Does everybody think?

Gabi Gomes: 0:45
I think one shapes the other. So without the loyalty program, you don’t get the data. So that’s often why companies do build loyalty programs so that they can garner more information about their users, their customers, which then in turn builds the loyalty in there.

Brad Breininger: 1:03
So is the term loyalty may be a misnomer, because it’s not about brand loyalty. But really, it’s a data

Gabi Gomes: 1:10
I think the data gathering piece of it informs gathering exercise. the company of relevant data that they need, whether it is for product development, or the sentiment or anything else, the data piece of it definitely helps the business grow and develop from that point forward. And you know, at the end of the day, by having regular contact with your customers, it does build the loyalty piece of it.

Brad Breininger: 1:40
Yeah. And I think that that’s where it all started, for sure. I guess my question is, is this happening more and more? And is that driving people to think uh I’m not sure that it’s worth the loyalty that I’m getting or the rewards that I’m getting to provide this data? Because are company is really using it in a way to serve me better? Or are they just trying to sell it on the side for extra income?

Gabi Gomes: 2:03
Well, I think what we’re seeing more and more of I think some companies have reached that plateau of, okay, we’ve mined our existing customers, we know them, et cetera. How do you go further with it? So we’re seeing a lot more partnerships with – between companies and their loyalty programs, you know, for example, TD and Starbucks, I don’t know if, if any of you bank with TD would have got something for Starbucks customers to kind of link those two, therefore having some sort of an exchange between their loyalty programs. Aeroplan is another one, I’m pretty sure that I can’t remember that’s, that’s probably a downside, because I can’t remember all the partnerships that Aeroplan has with it that I don’t really – can’t remember the benefits anymore. But more and more, we’re starting to see those partnerships. Now with lookalike customers, right? So, you know, a TD customer somewhere, somehow was deemed to also be a Starbucks customer. And we’re going to keep on seeing more of that, right? There’s only so much that you can tap into your base, but how do you grow your customers, right? It’s finding those lookalike audiences that, you know, with other related brands, similar values, etc, that have similar customers to you in order to grow that.

Jeremy Linskill: 3:19
I’m not sure that TD and Starbucks are lookalike customers. I’m wondering more if TD saw Starbucks as sort of a second tier audience. Like there’s a lot of Starbucks purchasers out there, right. And so they went to Starbucks, because they’re sort of the next level down. If you’re a bank member, and then you’re a coffee drinker. And they see that as a big audience that they could tap into. I don’t know that it’s every TD banker is a Starbucks drinker. I think it’s more that Starbucks has an audience.

Gabi Gomes: 3:51
Okay. But we go back to the data, do you not think that TD has data as to how many of their customers went shopping at Starbucks?

Jeremy Linskill: 3:59
But why did they want customers that they already have?

Gabi Gomes: 4:03
I think it’s to drive further value. So reinforcing value on both of those brands, both on the Starbucks side, as well as the TD side.

Sasha Codrington: 4:10
Well it’s also about aligning what types of customers you have, right? TD may be interested in a specific type of customer that has a certain level of income, disposable income, you know how they actually approach all of that, right? So in their review or analysis, it may actually show that somebody who buys Starbucks twice a week is a certain type of customer, and maybe that’s good for their business, right? So there are simply trying to identify that, you know, the bottom line is like all programs are collecting data, like all like every single one of them. It’s about collecting data, even something as simple as you know, sign up for a newsletter is all about collecting data. We’ll send you you know, a little bit of information you know, that may be helpful to you. But first, you have to give us your email. And that’s really collecting data.

Jeremy Linskill: 5:04
But this isn’t a new thing.

Brad Breininger: 5:06
Yeah. And are people more savvy about that now? I mean, I think that the hard part is when you find out later that Tim Hortons is is tracking you even when you’re not using the app. I think that that’s the bigger issue here.

Sasha Codrington: 5:19
I think that people are more savvy. But I think that we’re also in a social media period, where a lot of people really don’t care as much about what information they share, they just kind of assumed that some of that information is, is already out there. They’re not all that concerned about it. I think that people become concerned when something like that comes forward in the sense that it’s like, okay, they’re actually not just using my data in ways that I would be completely fine with and aware of, they’re actually tracking me when I’m not even looking to buy coffee. So now they’re basically spying on me.

Jeremy Linskill: 6:00
minute they stop using the app, they don’t want people using their data, right. So it’s like, everybody’s fighting to only share things when it’s an advantage for them. Right?

Gabi Gomes: 6:20
Or they want it to their benefit. Like, they don’t want it to be misused. Right? There’s an ethical component to it. Right?

Jeremy Linskill: 6:29
I guess.

Brad Breininger: 6:30
And what came out in that whole situation was that it was people felt that it was unethical, what was happening, and I think – we’re being trapped. Yeah. And when when people raise their hands, and then the, you know, the brand kind of goes, Oh, we’re sorry, we won’t do it again. That’s fine, which is what they did. And then that’s fine. That’s one way to deal with it as long as they don’t do it again. But I find for myself, like, from a loyalty perspective, I mean, I know about the data tracking, I know about the reason that the loyalty programs are in place. But what I find is that the restrictions tied to a lot of these loyalty programs are so awful that like, I don’t even want to deal with it. Like, I don’t even want the loyalty anymore. Because I feel like the restrictions when I go to actually use the loyalty rewards that I’m getting are just too difficult to work with. Like there’s all these rules and restrictions. And you can’t do this and you can’t use that. And like for example, Aeroplan, I was part of Aeroplan for years. But anytime I actually wanted to use Aeroplan, it was a nightmare. It’s like, getting an actual free seat on a plane was you had to jump through every hoop from here till Sunday. So it was like, You know what, I just don’t even want these points. Like, I’m just gonna use them for something else. I think I donated them to charity or something.

Jeremy Linskill: 7:46
There’s a new service in there like becoming an Aeroplan expert. You know, you hire somebody like a travel agent that can here’s I have this many points. Can you figure this out for me? I think there’s there’s actually a business there maybe.

Gabi Gomes: 7:57
And that brings up the question, because I feel the I have an example where I would say yes, is using Ritual. Like same way about air miles, I collected air miles for so so so so so many years, we’re talking like in the early 90s, collecting air miles. And I think I’ve only ever redeemed one thing. And I didn’t go very far. And it was very short. And it wasn’t meaningful. And it was definitely not worth the collection of all those things for all those years. And I think if I’m trying to pick up takeout or a drink, I would go to a that that’s, you know, with respect to value and the loyalty programs that needs to be reassessed, as well. But I have a question. So would anybody go we’re talking back to the partnership bit, you know, like, I was recently at Sobeys. And they asked me for my air miles, and I was like, Oh, you’ve got air miles. Oh, okay. Are people actually tied to the loyalty program? Do they shop at that store? Did you shop at Shell because they had air miles? Did you shop at Sobeys because they had air miles? Did you know the LCBO – the LCBO is an anomaly because there’s nowhere else you can get your liquor. But was that driven by the loyalty program? No. restaurant that is on Ritual, because A) you get the points through Ritual and B) you have the convenience of oh, you get to the restaurant and your orders already ready, paid for and you just pick it up and walk out.

Brad Breininger: 9:21
But is that because there’s no other competitor to Ritual, like Ritual kind of owns that space for the pickup stuff? I mean, others are trying to do it now they’re adding pickup, but I mean, that’s that’s been their focus since Day One. I kind of feel that way about Open Table. Like if I need to make a reservation, I might as well make my reservation with Open Table because I’ll get the points and I actually redeem that for a free meal in a restaurant.

Jeremy Linskill: 9:46
But do you choose the restaurants based on Open Table?

Brad Breininger: 9:48
No, no, no, no, definitely not. Quite frankly, if they’re not an open table, I leave open table and I go to the web and I just search for the actual restaurant.

Jeremy Linskill: 9:58
Because I mean, the convenience of Open Table is much easier, like I have to agree as opposed to going to a website, trying to find the reservation section. And all that. And I agree with Sasha the ritual, like I like ritual too, because it’s just easy. Like, I do everything in the app and, and I like to be in control, just go pick it up. So I’m not paying the exorbitant fees to have it delivered to my house. But it tells me what restaurants I’m going to eat at, like, I do use it that way. Like, where it’s like, okay, if it’s not on ritual, I’m not going to use it. So. But I think also to that point, like, I was gonna say to like, right now, because ritual, and I know it’s not new, but it’s still fairly new, I find the value, like the amount of points you get, and how quick you’re able to redeem something through it. It makes it worth it. Like, I feel like I get a free meal, if I use it on a regular basis, like once a month or something, which is decent, you know what I mean? Whereas I think down the road five years from now, I think it might take a year to get that free meal. But right now, because they’re still trying to onboard new people. It’s fairly quick.

Gabi Gomes: 10:56
I disagree with that statement. I think I was on a ritual for a couple of years and never redeemed anything for free. But anyways, you guys are – you guys are in a special, maybe I’m the one off on an island.

Sasha Codrington: 11:07
Yeah, we got meals from ritual all the time.

Gabi Gomes: 11:09
But is that really a loyalty program?

Jeremy Linskill: 11:12
Absolutely. It’s a loyalty program, I 100% believe is for sure. I’m more loyal to that than anything else. And when I say loyalty, it’s because it benefits me. At the end of the day, like, the value that I get out of it makes it like I want to use it for that.

Brad Breininger: 11:28
And that’s the real key there is value Jar like like the whole thing. Like for me, the only thing that I’m really consistent with is probably the optimum program. Because I shop at shoppers and Loblaws. And I have it on my phone, it’s in my apple wallet, it’s right there, it’s easy to access, it’s convenient, there’s value, like it tells me when I have enough points to actually get something. So I feel like the experience – it goes to this, those two things value and experience. If the value is there, and you’re actually getting something where you don’t have to jump through hoops. And there’s the experience, where it prompts you when it needs to it’s easy to use, it could go into your apple wallet, all of these things that make it easier. I think those two things, I kind of forget about the data. I mean, I know logically that the data is being captured and gathered. And I know that that’s the purpose behind it. But I’m able to separate the data from the loyalty when I feel like I’m getting something of value.

Gabi Gomes: 12:32
And I was about to say like, I think the optimum is a great example because they take the data, and then they serve you – whether it is a discount on whatever product that you are buying. So data for good, right, right data for for value at the end, right? Whatever you’re buying, you know, cucumbers all the time, hey, you know, cucumbers on sale this week. That’s relevant information there. I don’t mind sharing that data. Do I worry that Loblaws has way too much information as to what I buy at the grocery store, then I think I start thinking about well, what are they going to do with that?

Jeremy Linskill: 13:07
Raise the prices your cucumbers, that’s what they’re gonna Exactly.

Brad Breininger: 13:10
That’s right. Yeah, we’re like a few years from now. Are they gonna say to me, Brad, do you really need that ice cream? Are you sure about that?

Gabi Gomes: 13:19
They you could go there with the data, they could go there with the data, you know,

Jeremy Linskill: 13:24
if you talk you want to talk about something Uber – It’s like they took all the taxi cabs and then jacked up the rates, right like,

Sasha Codrington: 13:29
But even beyond that, I think I was having this discussion with Marko, we were chatting about kind of what those companies do with your data, is if let’s say I open Uber a few times, and I don’t actually order a ride, the algorithm thinks oh, it’s maybe too expensive, we need to drop the price for that customer so that they’ll start using it. Versus if there’s someone that just picks the most expensive ride, pick me up as quick as you can, every time, their price will be higher. Like there is a certain degree of personalization that they’re using and actually related to the price. Like if I’m leaving a restaurant and I open my Uber and my friend opens their Uber, and we’re going to the same place the price isn’t the same. And that’s something that feels very bizarre to me in terms of they’re using your data and your kind of habits to their direct financial benefit.

Jeremy Linskill: 14:22
Struggle here is like everybody sees that, but nobody stops using them.

Sasha Codrington: 14:26
I’ve used taxis a lot more often recently.. Yeah. I would say I’m kind of tired of Uber and Lyft.

Gabi Gomes: 14:33
I don’t do Uber – Uber Eats at all, because of the price discrepancy. The price that you get from when you walk into the restaurant and the price that you get on Uber. It’s like, a couple bucks different.

Brad Breininger: 14:43
Yeah. And it’s getting worse and worse. And

Christian Rosenthal | ZYNC: 14:43
A couple? Its like twenty bucks different.

Gabi Gomes: 14:46
I recently called Rogers and got served up their that’s not just on on that app. Like for example, recently I was partnership with Disney. So that was kind of interesting that and looking at booking something on Airbnb, and there was the price per night of the actual thing and then I got to the reserve this was cell phones. So cell phone tied to streaming button. And like all of these additional charges like service platform. So that’s where I think I’d like to see more of fee, cleaning fee, cleaning service fee, service cleaning that right more value being given through partnerships with fee, like it was just what is happening here? What are all these fees? other companies. But I think about virgin virgin when they first came out, virgin, cell phone platform was all about that it was a membership base, right? You were a member, you got discounts to all these partners that they had. So now, I’m not sure that there was a data transfer or data on the backend back then, I’m sure there is now the data sharing between all of those companies. But yes, there’s many aspects to it of which is engagement, I would think on those platforms, the ethical use of that data, as well, those are kind of two of those bigger, because you can be you can be on those platforms, you can have all those loyalty programs. But are you really engaging and doing anything with it?

Jeremy Linskill: 16:17
So how many loyalty programs are too many? Because I feel like that’s where we’re headed.

Gabi Gomes: 16:21
We’re the capital, I think Canada is literally the capital, we don’t sign up for anything unless there’s some benefit to us.

Jeremy Linskill: 16:27
But how many can I carry? How many can I keep track of like, you know, at some point, you’ve got to sort of max out no, in terms of how much bandwidth you have for loyalty programs, or a you’re willing to have a coupon card for every business that you walk into.

Brad Breininger: 16:43
But I think the true loyalty programs, there’s a lot of, I guess, merging that’s happening in that area. Like if you look at even what Loblaws did with the optimum program like they’re starting to bring, like, I think you can use your optimum card, at Esso now as well, which is not owned by Loblaws. So I think that we’ll see a lot more emerging in that. And then the big ones will kind of rise to the top. So whether that’s airmiles, Aeroplan, optimum. The other big thing is cashback, like the whole Rakuten, which used to be Ebates, I think, but also like, even the credit cards where they give you cashback without points. A lot of people are much more directed in that position, but it’s still a data play, right? It’s still all about gathering data. It’s just how much value and how much of an experience are we giving the consumer or the or the user?

Sasha Codrington: 17:35
Yeah, and I’d say the experience is super important, like in terms of what kind of loyalty programs and how many are you willing to keep up with? It really depends to me how easy they are to use. Like Gabi, you were saying about Aeroplan, how impossible it is to actually redeem anything. That’s one that I looked at for a few minutes and said, absolutely not, I’m not going to bother. Versus let’s say my credit card, it is pretty much automatic. You can redeem things. Same with ritual, I go into put in a food order, it automatically comes up oh, it’s paid for this time, because of your few orders before, like those kinds of things are completely effortless to use. And those ones I’m happy with. But for me personally, anything outside of that, where you have to do a lot of digging and work to actually get anything out of it – I haven’t bothered.

Gabi Gomes: 18:21
I have a question. Do you lose loyalty? Because your loyalty program is so difficult to comprehend? It sounds like you were turned off by that. Like, yeah, too much for me too bad. There it goes. Air Canada.

Sasha Codrington: 18:34
Yeah. On to the next, I would say so.

Jeremy Linskill: 18:36
Yeah. I mean, that was airmiles to me, like from the beginning of time, like listening to everybody talk about air miles and how difficult or how long it took to redeem. And I’ve been saying no to air miles for years. Every time I go into somewhere, it’s like, do you have air miles? Nope. And it’s like, it’s constant. But it’s like, I will not get involved in that one just based on what I’ve heard about the frustrations of people that that are involved with it.

Brad Breininger: 19:00
So outside of the experience and the value, does it bother you the amount of data that’s being collected? Like, are any of you, any of you on the Tim Hortons app? Like did that apply to – I mean, I’m not on the Tim Hortons app. So that didn’t apply to me. But like, does it bother you in how your data is being used? How much data is being gathered? Or do you just kind of accept it as

Jeremy Linskill: 19:25
I think five out of six people on this call accept it. Right.

Gabi Gomes: 19:33
I’m glad it came to the surface. I’ve got the Tim Hortons app to probably used it once. Just to kind of check it out. I was absolutely horrified when I heard the news. I still have well I still have the app. I’m also a big believer that with anything tech mistakes have to happen in order for privacy rules, evolution, legislation, all of that to come into play. This had to happen, some developer in the back end, let the floodgates open on data. You know, unethically thinking, you know, this is whether it was directed or not directed, we don’t know that I’m sure an investigation will come out. And I’d love to read all about that. But because of this coming to light, there are a lot more apps that are literally checking the back end going, what exactly are we tracking, and there will likely be legislation as to what you can and cannot track and, and all of that. So because technology is so like, changing by the minute by the second millisecond, whatever you want to say. Other stuff has not caught up laws have not caught up. We’ve we’ve said this time and time again. So this needs to happen for checks and balances to be put in place for other apps.

Jeremy Linskill: 20:49
I was gonna say like, what were the repercussions for Tim Hortons? I don’t know. I’m waiting to hear I hope there are some.

Gabi Gomes: 20:54
Is it still being discussed. Is that what’s happening right now? I’m sure there’s gotta be an investigation somewhere.

Jeremy Linskill: 20:59
Because I feel like it was just like, oh, sorry, guys made a mistake.

Gabi Gomes: 21:02
There’s gonna be some class action lawsuit somewhere.

Christian Rosenthal | ZYNC: 21:05
Yeah, I think there is one. What it was about to say is that and let’s be honest, completely honest, all of us here. And I was reading an article from The Globe and Mail it says the Privacy Commissioner said Tim Hortons did not adequately inform customers about location tracking and necessary step under the law to obtain meaningful consent. Okay, that’s fair. So who ever reads privacy policies?

Brad Breininger: 21:31
No, I scroll down. I agree. I don’t.

Jeremy Linskill: 21:36
Five out of six people on this call do not read them.

Christian Rosenthal | ZYNC: 21:40
So even if Tim Hortons had said, you know, what we’re gonna track you, we’re gonna know where you are. Even when you’re not using the app, who’s gonna know

Brad Breininger: 21:51
Gabi – will have to go to Gabi, she read it.

Gabi Gomes: 21:55
But here, here’s the point, I might have read it. But it’s written in such a way that it’s so convoluted that I can’t understand.

Jeremy Linskill: 22:03
So you read it for the sake of even though you don’t understand it.

Gabi Gomes: 22:06
No, I read it in the hopes that it’s, you know, plain language enough for me to understand and something in bold saying we are tracking or bla bla, bla, bla bla, you know, that I scan and read, if that didn’t catch me that I’m screwed, you know, with the rest of you who just click to the bottom to get your coffee, right? But

Brad Breininger: 22:25
the reality is, is that if you want the convenience, if you want to be able to use the app, you kind of have to give up something for that – every action has an equal and opposite reaction. It’s the law of the world, right? Like, and the truth is, is that no one is going to put a loyalty program in place or an app in place or a more convenient way without getting something in return. And it’s almost like a contract that we make with these brands that say, okay, you know, what, as long as you don’t do something, I mean, what happened here was so far outside of the ordinary, which is why I think we’re talking about it. But generally, they own those, the I don’t remember that, that thing that was going around on Facebook for a while, where, you know, everyone would say, oh, Facebook actually owns all your baby pictures, or all your all the pictures of your kids that you’ve posted. I don’t know if that was true or not, I don’t know where that netted out. But the idea is, is that we’ve all come to accept more of this kind

Sasha Codrington: 23:25
I don’t know, like anybody who actually has of thing. Facebook is really not concerned about their privacy and being tracked and their data collected. It’s as simple as that. Because we all know that Facebook is one of the worst companies when it comes to breaking all types – kinds of privacy rules, and guidelines and all that stuff. But people still use it.

Brad Breininger: 23:48
Well, it’s a contract, right? It’s it’s a to a lot of people, it’s not important enough to lose the convenience or the ability to use those apps by giving up

Jeremy Linskill: 24:01
Yep, but if they didn’t do that stuff with the app be as effective. Right, like, there’s the question in there.

Brad Breininger: 24:06
Its a good question.

Sasha Codrington: 24:08
Yeah, for sure. And another thing too, what are we using consultants as an example, or any other company that collected information and then basically got caught? And they were like, Oh, oops, and yes, even if there is like a lawsuit against them, the amount of money to have to pay out versus the amount of value Yeah, wheather that’s monetary value, or some other value they got out of that. It’s it’s it’s a joke, right. Like, sometimes when there is major lawsuits that happen, whether it’s seen in a car, a car industry or something else, and they have to pay out like $300 million, and you think, Wow, 300 million, but they made 3 billion. Yeah, right. And it’s like and pharmaceutical industry is definitely you know, it’s built on that like, yes, they’re gonna make mistakes. Yes, they’re gonna you know, people are gonna die, people are gonna get injured and you know, the pharmaceutical companies gonna get sued, but they made, you know, 100 times as much money as what they have to pay out. So

Brad Breininger: 25:07
yeah, I mean, there’s there’s documentaries and shows about these kinds of issues. I think in the end – The key thing here is that we all know that privacy is not what it was 10 years ago, 20 years ago, 30 years ago, and there’s been a transfer of what we’re willing to accept versus what we’re not willing to accept, in order to get the convenience, or as the brands call it, to get the loyalty and the rewards that come from the convenience, the value, the points, the cashback, whatever it is. But basically, it’s not a question of data versus loyalty, which is the question that we posed. It’s how does data and loyalty work together? And I think for any brand, what they need to figure out is, how do we try to provide the most value and the most convenience and the best experience while also gathering data that fits within the regulations that governments or other corporations have put in place? Ethically, ethically, yeah, that’s what I mean ethically, and it really comes down to those things. I think anything that goes outside of those parameters in any significant way, like what happened with Tim Hortons, there’s going to be a bit of a uproar. And as there should be, and it will be dealt with. But to your point, Gabby, there may be legislation or rules down the road that you know, are put in place to monitor that kind of thing. But I think where we’re kind of sitting today, I think brands need to ask themselves, what kind of data do we need and what are we willing to offer for it? And consumers need to ask how much am I willing to give up to get the convenience and the value that I can get from these programs? So that’s this version of everything is brand new. Join us next time for a new topic and remember, everything is brand

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