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Loyalty Programs: The Points Aren’t the Point

By Claire Tassin | August 01, 2019 | 0 Comments

MarketingMarketing, Consumer, and B2B Insights

The fact that marketers use personal data to serve up targeted ads is old news to consumers. Far from being creeped out, consumers see their own benefits in marketer-collected data, whether that be entertainment, ad relevance or, increasingly, rewards. The latter presents a new opportunity for marketers struggling with getting accurate and relevant consumer data.

On the entertainment front, just last month, social media was flooded with Instagram users sharing their ad interests lists, often poking fun at inaccurate items. The first page of my own list was 50% dog content, which is … extremely correct. But some errant topics made it up there as well. In terms of ad relevance, consumers enjoy the benefits of that data collection, with 88% indicating interest in personalized communication from brands (subscription required), but as evidenced above, the current state of data collection is far from perfect.

Consumers are realizing the real value their data has for brands, and they are enjoying increased ability to control access to that information. So marketers will have to work harder to earn access to data in order to serve up the relevant communications and experiences that keep customers loyal. Loyalty programs offer an excellent mechanism to do just that, if marketers can get the incentives right. Consumers are already accustomed to earning points or cash-back for purchases, so adding transactional rewards for data to loyalty program structures is a natural first step. Points or cash rewards are a great tool to incentivize program enrollment and profile completion. Who doesn’t love a birthday coupon? But such perks probably aren’t enough to differentiate your brand or to keep programs sticky, especially for younger consumers.

Gen Z consumers are less interested in rebates and cash-back than older consumers, and more interested in personalized products, events or experiences. This is where all that good data collection can really help marketers understand target customers’ preferences to create tailored, meaningful communications and experiences. Connection was never really about the points.

For more on using your loyalty program to incentivize consumer data collection, check out “Deeply Rewarding: Build Loyalty Programs That Go Beyond Cash-Back.”

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