It’s hard to miss the barrage of new reports unfolding over the past couple of months after the Cambridge Analytica news broke. The follow-up discussions, testimonies, and reports of investigations into possible privacy violations raised the issue of privacy.
Research shows that privacy is already a major point concern among consumers. Especially when cyber attacks and data breaches are happening more frequently. Consumers might find it easier to cut ties with a company rather than risk experience a data theft. Data security specialists from Gemalto found that 65% of their survey respondents would never, or are unlikely to do business with a company that experienced a data breach in which financial data was stolen.
Loyalty programs are one of the best ways brands can connect with their consumers and grow their customer base. Loyalty programs drive revenue and provide opportunities for brands to differentiate themselves from their competitors. However, loyalty programs depend on consumer participation. Which means every time a consumer chooses to opt-in to a program, they’re assuming the brand will protect that data. Consumers believe what they willingly give to the program should not only benefit them but also stay secure. An eMarketer study found that 80% of consumers feel loyalty programs are worthwhile for the savings and rewards they offer. On the other side, 30% of consumers say loyalty programs require too much personal information from them. Loyalty programs experience the same struggle in maintaining a balance between utilizing personal data to create more targeted offers and rewards, while also not making demands from the customer beyond what they consent to give.
Why You Should Care
With the official start to GDPR happening on May 25th, companies across the globe are revisiting their compliance and privacy regulations, and loyalty programs should be included. Brands should ensure they are meeting guidelines for their global customers. They should reassure their customers they take the security of personal data seriously. Consumers are constantly evaluating the pros and cons of loyalty program participation and usually, those evaluations usually consist of deals and prices. Lately, they’ve been consisting of privacy violations. By demonstrating that consumer protection is among your top areas of focus, you show that you take your consumers concerns seriously. Relationships of all kinds invoke a measure of trust; and you want your customers to trust that their loyalty – and their data – is safe with you.