Matthew Seagrim played the lead role in revamping the Scene loyalty program, now called Scene+.
For thirty years the AIR MILES Reward Program has ruled the skies in Canada. Its familiar blue membership card can be found in the wallets of roughly 10 million Canadians. But in recent years AIR MILES has lost altitude. Several high profile sponsors have exited the program, most notably Sobeys, the second largest supermarket chain in Canada, which this past summer switched over to the newly revamped Scene program, now called Scene Plus. The switchover followed the move by Sobeys owner, the Empire Company, to team up with Cineplex and Scotiabank as a joint owner of the coalition loyalty program.
The Scene program was launched in 2007 as a way for Cineplex and Scotiabank customers to earn rewards going to the movies and buying popcorn. But exactly one year ago Scene merged with the Scotia Rewards program to offer members many more ways to earn rewards. Now members can not only rack up points on their moviegoing and credit card purchases, but they can also take advantage of earning opportunities through the online cashback company Rakuten and by booking travel through Scene Plus Travel powered by Expedia. And that’s just the start. Next summer Home Hardware stores will be joining the program, making Scene+ a formidable contender for front-of-the-wallet status.
Historically coalition programs have floundered everywhere in the world but Canada. Thanks in part to urban density, the existence of strong national brands in high volume earning categories like groceries, banking, fuel and retail, and an affinity amongst Canadians for loyalty programs (the average household has 13 memberships), the loyalty market in Canada is thriving. It’s estimated to be worth $4.4 billion and is expected to grow at a compound annual growth rate of 11% over the next four years. No wonder Scene has elected to transform itself into a full fledged coalition loyalty program, determined to grow its 10 million member base.
The argument in favour of a coalition versus a proprietary program has always been strength in numbers, giving members greater “earning velocity”. But a careful balance has to be struck between the perceived value of those rewards and the effort required to obtain them. Attempts to devalue that currency – or make it harder to redeem points – or rely on “breakage” (that is, unredeemed points) to inflate the bottom line – can backfire (as AIR MILES discovered when it tried to put a 5-year expiry on points, igniting a fierce consumer backlash that forced the company to backpedal). Plus, the various category sponsors have to be deftly managed as well. Category exclusivity promises have to be honoured – conflicting strategic priorities resolved – proof supplied that members are buying more, more often. Not to mention the technical complexity of converting purchases across many different payment systems into variable points currency and then personalizing member offers based on their particular affinities.
Matthew Seagrim, the strategic architect behind the transformation of Scene, is intimately familiar with all of those challenges. For seven years he worked at former Aeroplan owner AIMIA in charge of product strategy. And for the past seven years he’s been in charge of program development at Scene. His efforts are being rewarded – a staggering 65% growth in membership over that time, and recognition as one of the top-ranked programs in the country. But he’s on a mission to create a next generation program – one that goes beyond discounts to offer members even more of a rewarding experience.
I began by asking Matthew, who earned his degree in mechanical engineering, whether he ever imagined he’d be running one of the largest loyalty programs in the country.
Matthew Seagrim (MS): I certainly never did. You know, I grew up in Montreal and made a decision to go study engineering with the intention of using that to build spaceships. That was really the plan, and I kind of steered my course selection through undergraduate to allow that to happen. And I had the good fortune to do really neat projects like a fourth-year inter-university project, working on designs for the Mars Pathfinder Rover. And at the end of undergrad, I came to Toronto largely because there was an opportunity to do some management consulting, and it struck me as, like, a really interesting field. But it was one that I thought I would do temporarily and then, you know, go back to the initial path.
But opportunity has a way of arriving at the most inopportune of moments, and as it happens, you know, there’s a move afoot at that point in time with Canada Trust to bring their head office from London, Ontario, to Toronto. And one of my colleagues at the consulting firm approached me one afternoon and said, “Look, they’re trying to build a team. They’re trying to scale this business. They’re trying to relocate it. They’ve launched a really interesting partnership with Capital One,” where, you know, Capital One was entering the country, but did not have any back-office operations, and so there was an exchange of value between the two organizations, you know, Canada Trust to provide Capital One with some back-office support, and Capital One to bring to the table their world-class thinking around analytics and data-driven marketing and predictive modeling, all things that were in a leading edge in that market at that time.
And it just seemed like a really interesting opportunity. So I joined this very small team that was in startup mode, trying to scale the leadership of that business in the Toronto office, and it was fascinating. We learned an enormous amount over a short period of time about how to leverage data, to personalize offers, drive adjudication, make smarter banking decisions, and as a team, we were able to kinda leapfrog our learning based on the expertise of this group we were working with out of the U.S. So, it was one of those opportunities that you jump on in the moment because it seems like a really interesting thing to do, and 25 years later, you realize that you stepped off the path that you were going to be on and onto something new and interesting.
Stephen Shaw (SS): Yeah, interesting. And beginning to evolve rapidly around that time period.
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