Why loyalty schemes are more valuable to consumers aware of the value of their data
Loyalty schemes are the key incentive for consumers to hand over their data as consumers increasingly appreciate the value of their own data, according to a new report from consumer analysis and data marketing specialist GI Insight. The research showed that in a survey of more than 1,000 UK consumers more than three quarters of respondents (76%) didn’t want to hand over their data unless a business had a ‘proper loyalty scheme’ in place.
The report showed that this is because consumers are more wary than ever of handing over their data without reward since they have a greater awareness than ever of its use and value to businesses. This means that customers know the trade-off of sharing their data with nearly two-thirds (64%) saying that they were happy for a company to hold and use a considerable amount of detail on their personal preferences and circumstances as long as they used the information to send them relevant and timely offers and communications.
The loyalty aspect is particularly important since businesses that fail to recognise their loyal customers risk alienating them completely – something that is possibly happening more than some businesses realise. The survey showed that nearly 40% of the respondents said that some companies had failed to recognise them as regular buyers when they have visited their websites since without a loyalty scheme such firms have no way of identifying their frequent customers.
The research report, Putting Data in the Driver’s Seat, also showed the value of loyalty schemes for retaining and driving customer spending. 87% of consumers said that a company having a good loyalty scheme had led to them continuing to buy from that brand over the last few years. And the same was true for customers hungry for value too with 82% saying that as the economy recovered they would continue buying from businesses whose loyalty schemes had delivered value in recent years.
And the research also showed that loyalty schemes could be a customer winner too with a third of respondents having switched from one brand to another in the past year because the alternative company had a loyalty scheme that they liked.
“In the age of big data and omni-channel customer engagement, a loyalty scheme is a highly sophisticated way of capturing customer data that also provides a built-in mechanism for applying the resulting insight in a logical and highly targeted way,” said Andy Wood, managing director of GI Insight. “Companies need to continuously collect fresh consumer data to provide value to their customers through well-timed promotions that reflect these consumers’ latest needs. A loyalty scheme does just that.”
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