How to Safeguard the Privacy of Loyalty Program Members? Read our 3 step process
Our 3-Step Roadmap to Making Privacy Management an Asset for Your Loyalty Program
By Ko de Ruyter, Debbie Keeling and David Cox
Safeguarding the privacy of your loyalty program members has rapidly become a strategic priority for program managers. As programs are rolled out across multiple platforms and global markets, protecting member data in line with continually changing geopolitical policies and guidelines has become a formidable challenge.
At the same time, a rise in member privacy concerns and their expectation for programs to get privacy right all the time have turned up the pressure. Last year, Marriott was fined $120M in a data breach case. This and many other cases have been really bad for business and customer sentiment. According to a recent Harris Insights and Analytics survey, 78% of customers state that it is ‘extremely important’ that companies address privacy issues and stop these data breaches.
At Motivforce, we take the view that it is time to try to relieve some of the pressure. Instead of zooming in on the dark side of personal data breaches, non-compliance fines, bad press reports and customer defection, we look at the bright side. If your channel partners are confident about trusting you with their personal data, logging their sales and registering their learning progress, this will inspire building trust and commitment and profitable relationships. Viewed in this way, privacy will be one of your B2B loyalty program’s strategic assets, one which drives the ROI of your program.
Let’s sketch out a roadmap that takes your there in three easy steps.
Step 1 – understand members’ privacy concerns
In privacy-conscious markets, the first step is an in-depth understanding of member privacy concerns. What consequences do they have for your business? We have done the research for you. Through a meta-analysis, we re-analysed the findings of 304 recent research papers to uncover insights. Our results show that:
actively managed privacy yields more customer trust and companies are viewed as less risky to do business with.
privacy management contributes to the willingness to actually buy more and engage in positive word-of-mouth – but these effects are less pronounced when mobile or social channels are used. In other words, effective privacy management works best in a classic website environment.
most people do not mind sharing socio-demographic data. But where programs need members to share uber-sensitive data, such as detailed sales leads or learning certification results, it becomes more challenging to harvest the positive impacts of privacy management. That means that for most B2B programs, much more than B2C, it is crucial to get this right from the start.
Step 2 – conduct a privacy audit
Armed with the insights in Step 1, we can identify a set of key points crucial to effective privacy management in your B2B program. We recommend taking an outside-in perspective by hiring a team of loyalty experts to hack the privacy-related elements of your program. It is important to be thorough. In our experience, a hard and honest look is needed to expose security issues and systemic weaknesses:
an important part of such a privacy audit would have to be a sound risk register that identifies what the consequences are related to the hazards you face. Try to widen the focus and not just think penalties. Identify relevant member related outcomes and analyse the impact on member attitudes (e.g., trust) and relevant behaviours (e.g., repurchase intent and sales data).
We also recommend evaluating the consequences of privacy management for program design. Talk to your members about data sensitivity and make the right trade-offs between the data that you store in your program, the data you need to run your program effectively and member trust and risk perceptions.
Once you are underway, do not treat your privacy management as a static, annual box-ticking exercise. The privacy ecosystem is continually changing. To paraphrase Buddha: privacy is not a destination but a journey that requires constant vigilance.
Step 3 – engrain privacy in your program’s DNA
A final step is to engrain privacy management as part of the DNA of your program. Privacy is no longer an item that you can park with your IT guys or your team of legal advisors. Strategic privacy management is pivotal to your loyalty program.
Privacy intelligence is central to program intelligence. It defines what program membership means to your customers in terms of trust and commitment. It determines their engaging with your program and it ultimately impacts your bottom-line.
As you move forward and expand your program touchpoints to mobile and social media, it is important that that you earn and nurture your members’ trust by addressing their privacy concerns associated with these new channels.