Building Relationships

Loyalty programs may be commonplace across the retail industry, but few are capable of rewarding members on a personal level. Société de transport de Montréal (STM) may not be a retailer, but retail chains can learn a valuable lesson from how the transportation company rewards individual consumers for their loyalty.

In Montreal, 65% of the population uses public transportation when headed to downtown destinations. While STM is interested in driving revenue, it is even more interested in increasing its ridership. Looking to increase its ridership between 3% and 5% annually, the transportation company decided to see if a new loyalty program would help it to achieve its goal. Leery that a traditional card- or points-based program would be costly from both internal operations and customer engagement perspectives, however, STM is preparing to launch a mobile loyalty program by February.

“For us, the program is a way to deliver value as a means of retaining our loyal riders and also recognizing their loyalty,” said Pierre Bourbonnière, director of marketing, STM. “We plan on getting to know customers by gaining a better understanding of their preferences and behavior.”

STM manages fares through “OPUS” transit smart cards that can be loaded at one of 200 fare vending machines. The smart card, which can be used across the Montreal subway and bus system for up to four years, stores all purchased fares as well as riders’ personal information, including email addresses. Currently, there are 3 million OPUS cards in circulation. One million of these cards are active.

Approximately 20,000 OPUS cardholders are being invited via personalized emails and station-based advertising to join the mobile loyalty program by downloading a dedicated app. Once downloaded, riders are prompted to input their specific preferences, such as their interest in sporting events, cultural arts, restaurants and other hobbies. STM will exploit these details with the help of longtime technology partner, SAP.

By leveraging SAP’s CRM (customer relationship management) solution and a combined business intelligence tool, STM can delve into OPUS rider histories and preferences. Once that is done, Bourbonnière said, “We will create and deliver personalized, geo-localized offers from STM, as well as across more than 1,000 business partners.”

As riders launch the mobile app, they receive notifications about available rewards from business partners, including the Opera de Montreal, promoters of local events, as well as approximately 125 retailers, ranging from IGA to Tim Horton Coffee to local liquor stores. While riders can scroll through approximately 125 standard offers daily, what makes the program unique is STM’s ability to segment geo-localized promotions.

“Geo-localized promotions are based on individual’s demographics, entered preferences and our ability to offer them relevant offers in real time,” Bourbonnière said. “The key to success is offering the right individual the right offer at the right time. That formula is what makes this an extremely unique program.”

For example, IGA, STM’s grocery retail partner, may send a message asking, “Have you thought about supper? If you check in within the next hour, here is a special offer on our new arrival of oysters.”

“It may also offer free delivery to riders knowing they cannot carry a bagful of groceries,” Bourbonnière explained. “They can check in at home, and IGA can deliver the order.”

STM plans to initially launch the program among iPhone users and then will expand it to Android devices.

“The objective of the program is to follow the behavior of our riders, understand their preferences and then exploit our CRM solution to communicate with them and deliver promotions that they can benefit from,” Bourbonnière said. “Our overall challenge will be keeping up the excitement and momentum, but we are eager to be successful and deliver something innovative.”