Brands want and need voluminous amounts of customer data to create more personalized experiences. But, the dilemma brands face is 29% of loyalty program members say one of the barriers to enrollment is marketers require too much information, according to the 2013 Maritz Loyalty Report, while 24% also cite privacy as a barrier.
What can brands to solve this data acquisition/customer privacy puzzle? Be transparent.
Ask permission, and be transparent: Being transparent with customers about what it being captured and how it will be used and by whom ensures that marketers’ efforts to create personalized experiences will be viewed as surprising and delightful, “rather than creepy and weird,” according to the report.
Ask again: Customer preferences change and what is relevant at one moment may no longer be relevant later. Similarly, what’s impermissible today might be widely adopted tomorrow. Avoid the set-it-and-forget-it approach to customer preferences, and take stock frequently of what your customers want.
Honor the social contract, not just the legal contract: Marketers should be guided not only by the legal contracts between brands and customers (i.e. opt-ins, anti-spam legislation) but equally important by the social contracts into which customers have engaged with brands. The foundation of this is trust.
Topping the Maritz Loyalty Report list of “cool and exciting” uses of member information are personalized discounts based on purchasing habits – preferred by 69% of members. The second most preferred use of member information (62%) is personalized offers based on preferences that customers manage and update.
Topping the list of “creepy and weird” uses of member information is allowing programs to review your Facebook friends’ status updates to determine your eligibility for benefits. Second on the list is offering rewards or special benefits to those who provide the program with access to personal information such as income and household composition. Third on the list of providing your credit card number to a retailer via its website for credit on your statement if you spend certain amounts (i.e. spend $200/month at a retailer and receive $20 back on your credit card statement). Fourth on the “creepy and weird list” is allowing programs to “Like” or “Follow” you to review your status updates and photos to offer rewards or special benefits based on your personal profile content.
According to the Maritz report, the level of privacy concerns is consistent across demographics, but what each segment renders “cool” or “creepy” varies.
Transparency and user-defined permissions are the keys to balancing personalization with privacy.
Brands must avoid the set-it-and-forget-it approach to communication preferences.
The report surveyed more than 6,000 consumers and captured program-level feedback from more than 30 national programs across six industry sectors – Retail Loyalty, Grocery Loyalty, Credit Card Loyalty, Co-Brand Loyalty, Travel, and Hospitality.