Survey: Consumers Less Likely to Join a Loyalty Program That Collects Personal Data or Requires an App

While most businesses continue to collect more and more customer data to benefit their marketing efforts, they might need to stop and consider what consumers want. Retailers may be surprised to learn that customers don't actually want to get that chummy.

A new survey conducted by The Harris Poll on behalf of Wilbur shows more than seven in 10 Americans (71 percent) are less likely to join a loyalty rewards program that collects personal information (e.g., address, account information), with 26 percent saying they would be much less likely.

Similarly, the survey also found that a majority of Americans (76 percent) are more likely to join a customer loyalty program that collects only their name and phone number, with 32 percent responding they would be much more likely to join.

It seems clear from these results that customers are becoming much more selective about their loyalty programs as well as their privacy when it comes to brand loyalty.

A Brief History on Rewards Programs

Loyalty rewards programs began in the 1700s, when American retailers first gave out copper tokens that could be used on future purchases to help create repeat business. In the late 1800s, some retailers began giving out stamps instead, which were a lot less expensive.

Then, in the 1900s, several leading brands such as Betty Crocker introduced “box tops” loyalty programs, which printed coupons directly on packaging (primarily box tops). In 1981, American Airlines started what many now regard as the first full-scale loyalty program of the modern era.

Around that time, card-based loyalty programs also gained popularity, and some retailers also began adopting “loyalty aggregators” or “coalition loyalty programs” that honored reward points across a network, regardless of the retailer at which they were originally earned. In time, however, this approach proved disadvantageous for the most popular businesses in the coalition.

Plenti, for example, was a coalition loyalty program that included AT&T, Exxon, Macy’s, Mobil and Rite Aid, among others. But once Macy’s and AT&T realized most Plenti members were redeeming rewards through their businesses, they quickly saw they were on the losing end of the deal.

This is also an important moment in the history of loyalty rewards problems because it's also when data privacy issues began to enter the picture.

Case in point: Although the Plenti program has long ended, those who participated “cannot revoke consent to share their personal data,” according to the program’s online FAQ.

What Customers Want

Against this backdrop, it’s important for businesses to pay attention to what their customers want, especially if they’re developing a program that’s designed to build customer loyalty.

Among the things consumers want and don’t want in a customer loyalty program, according to the recent survey results, include the following:

• They DO NOT want another app to download. Most Americans (58 percent) are less likely to join a loyalty program that requires them to download an app to access the benefits, with 26 percent saying they would be much less likely.
• They DO NOT want another physical card to carry. The majority of Americans (79 percent) are more likely to join a customer loyalty program that does not require them to carry a physical card, with 34 percent saying they would be much more likely to join.

A good loyalty program is about getting to know customers as people, not as a column in a database or spreadsheet. I say give the people what they want to inspire their loyalty: a rewards program that doesn't ask for too much personal data, doesn't require them to download another app on their smartphone, and doesn't demand they carry around another card in their wallet.

Ray Clopton is the president and CEO of Wilbur, a new app-free, card-free loyalty rewards program that only requires a mobile number and first name.