Loyalty Programs: Don’t Be Creepy
February 26, 2013 | Kristin Laird | Comments
This story originally appeared in Feb. 25 special Privacy Issue of Marketing. Tickets for Marketing’s Understanding Privacy in 2013 half-day conference are still available.
New research reveals just how much consumers worry
Though consumers continue to covet more personalization from loyalty programs and are willing to share their personal information in exchange, a significant number say they are reluctant to even join a loyalty program because of privacy concerns.
How can marketers strike the right balance between consumer willingness to provide personal information and their concerns with privacy? How can they acknowledge members with tailored rewards and communications without seeming too creepy?
The answer: customize the approach by demographic.
The “Cool to Creepy” index, which is new to the third annual Maritz Loyalty Report, looks at the top five attributes considered “creepy and weird” and “cool and exciting” across three demographics (16-34, 35-49, 50+).
While privacy is a concern for all those surveyed, what each of these demographics consider cool or creepy can vary. While deeper levels of data analysis trigger privacy worries within one demographic, another may welcome it.
“Loyalty programs run a significant risk of alienating many of their customers by taking a ‘one size fits all’ approach,” says Alison Simpson, executive vice-president, Maritz Loyalty Marketing.
For instance, Canadians under 34 are nearly three times more open to receiving rewards through Facebook or Twitter than those 50 over.
“If loyalty marketers take the same approach across their full member base, they could miss out on three times the potential in a large segment of their membership,” says Simpson.
While the Loyalty Report has always examined members’ attitudes towards privacy, Maritz noticed a significant increase in concern from year one to year two. In 2011,
20% of respondents said they didn’t want to share personal information. The following year, 35% cited “privacy concerns” as a barrier to joining a loyalty program. Simpson believes this stems from high-profile stories of major privacy breaches like the Sony Online Entertainment hack that exposed 25.6 million users’ account information including credit card and debit numbers. This year the number dropped to 26%, creating what Simpson calls “a new norm.” The 2013 Maritz Loyalty Report is based on online surveys conducted in December 2012 with over 4,000 Canadians, 1,000 of which have personal income greater than $75,000.
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For more insight on privacy issues and consumer expectation, check out Understanding Privacy in 2013: The New Rules of Engagement on Feb. 28. Tickets are still available