RESEARCH | Staff Reporter, Australia

Australian loyalty programmes at a “pivotal point” with member data protection and use

Research from The Point of Loyalty revealed growing concerns about data security.

Australian loyalty programmes are at a “pivotal point” with member data protection and use, according to The Point of Loyalty.

According to the customer loyalty consultancy firm’s latest For Love or Money study, there are seven factors that members consider as important when providing their data to loyalty programmes, with their top three considerations being:

  • Security - knowing how secure their data is;
  • Use - knowing how their data is used;
  • Reputation - the reputation of the company asking for their details.

“With numerous data breaches being reported world-wide and some on loyalty programs such as Dunkin Donuts – DD Perks and Marriott’s programme, loyalty programmes are at a pivotal point with member data protection, collection and use,” Adam Posner, Report author and CEO of The Point of Loyalty, explained.

The report also revealed that 52% of loyalty programme members are concerned about loyalty
programmes being hacked or subject to fraud.

“To maintain members’ trust and ongoing engagement with their loyalty programmes, brands with programmes should prioritise a proactive and transparent approach to clearly highlight to their members how their data is being protected and used,” Posner advised.

The research also said that members are enjoying the benefits that programmes offer, with 62% of members indicating they take advantage of most of the rewards and benefits available through their programmes. This is up from 54% when first benchmarked in 2015.

In 2019, millennials are even more motivated to make the most of their memberships, with 68% indicating they are taking advantage of the rewards and benefits available.

“While members have voiced their view on data use and protection, they are still highly engaged with programmes that provide them achievable and desirable rewards and a seamless experience,” Posner said.

(Also read: Will millennials drive more cashless options in restaurants?)

For businesses, loyalty programmes stimulate extra revenue with 28% of members indicating they have purchased something they “didn’t really need” in order to earn points or maintain programme, up from 16% when first benchmarked in 2015.

“The incremental purchases that a well-structured loyalty programme can stimulate is where businesses who invest in loyalty programmes really succeed,” Posner said.

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