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70% of Consumers Worry About Loyalty Program Privacy

1066968_27182250I’m a big fan of loyalty programs. I appreciate it when a company offers me a perk for being a good customer. And in return, I buy from them again and again. Loyalty programs dictate where I buy my groceries, where I shop online and where I eat when I’m out and about.

Over the past years, I’ve increased my loyalty program usage for one big reason – advances in technology. I no longer have to dig that ratty, cardboard punch card out of my wallet when I shop. Businesses now use my phone number to keep track of my purchases and they automatically reward me when I reach each level.

Really, it’s like finding money on the ground.

The downside to this technological advance, is having to give a business my phone number and / or email address. And according to a new report from Technomic, that’s a big concern with 70% of the people they surveyed saying “they would be more inclined to sign up for a rewards program if they could be guaranteed that the restaurant would not pass along their information.”

Technomic’s Market Intelligence Report is aimed at the restaurant industry, but I think their numbers can be applied across the board. The fact is, loyalty programs are an excellent way to encourage return visits from customers.

  • 96% of customers enrolled in a reward program said they had visited that restaurant in the past six months.
  • 58% of loyalty-club members said they are likely to base their where-to-dine decision on whether they have a membership at that brand.

The downside for marketers, only 36% of those surveyed are involved in a restaurant loyalty program but 80% said they would sign up if their favorite establishment offered to them the option.

I think that 80% is too high. People say they’re interested, but when it comes down to handing over their personal information, they don’t like to let go.

In order to get over that bump, businesses need to make sure their loyalty program is worth it. If a customer has to visit your establishment 20 times before they get a free $5 item, forget it. Rewards need to be. . well. . . rewarding and you must be able to accrue them in a reasonable amount of time. Even better if there are levels, so you accrue better rewards, faster, after you’ve been with them awhile.

Regal Cinemas has one of my favorite programs. They give you points when ever you buy tickets or concessions at the theater. When you hit 50 points you get a small popcorn, 100 points is a soda and 150 gets you a free movie ticket. Then the rewards roll over and start again. They also offer double point days and other discounts once you hit “star status” level.

If you’re putting together a loyalty program, don’t forget bonuses for birthdays and other holidays.

When a consumer decides to spend money, be it on food, fun or a necessity, they have a choice of where to go. Why not stack the odds in your favor by rewarding them for being a loyal shopper?

  • http://steveplunkett.com @steveplunkett

    with mobile/tablet apps.. we are now adding cc#’s and much more information to these programs..