Report: Are Australians concerned about loyalty data privacy?

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By: RickFerguson |

Posted on January 22, 2016

A new survey from CHOICE, an Australian consumer advocacy group, reveals that its members are concerned about the ways Australian retailers collect and use loyalty programme data. The survey does, however, reflect a fundamental misunderstanding by CHOICE members about the nature of the loyalty value exchange.

In the survey, CHOICE queried 280 of its members about their concerns over loyalty programme data usage. Among its findings:

  • 61% of members surveyed expressed total or extreme discomfort about the type of information loyalty programmes collect about them.
  • �Even more� members (the CHOICE article doesn�t specify a percentage) are uncomfortable with the amount collected and for how long and how securely it is stored.
  • 84% of members have concerns about with whom businesses are sharing their information.
  • 11% of loyalty programme members say they didn't know "anything at all" about what information is collected about them, with another 60% saying they know "a little."

The survey�s value as a barometer of Australian consumers� attitudes toward loyalty programme privacy is suspect�the survey is unscientific and unrepresentative of the Australian population as a whole, for example. The survey is also guilty of selection bias, as members of a consumer advocacy group are no doubt far more likely than the general population to be aware of and express concerns about loyalty programme data privacy.

Copious surveys have also illustrated the overall consumer perception that loyalty programmes are, when compared to other forms of marketing based on consumer personal information, viewed as relative safe havens. A 2013 survey of 1,200 Australian consumers from Aimia, for example, reveals that �only one in five (19%) Millennial loyalty programme members are concerned about reward programme operators abusing their personal information, as opposed to more than one quarter (27%) of older members. In addition, more than half of all Millennials are more likely to share personal information with brands that offer reward incentives, significantly higher than older Australians.�

Loyalty programmes are viewed as safe havens for consumer data collection because the value exchange is explicit: in exchange for allowing the programme operator to collect and act upon your volunteered personal details and transaction history, the member receives compensation in the form of rewards, recognition, and increased marketing relevance. When properly constructed and communicated, this value exchange is beneficial to both consumers and marketers.

Flawed though it may be, the CHOICE survey does illustrate themes of primary importance to Australian marketers: they must be diligent about making this loyalty value exchange transparent and symbiotic; and they must be equally diligent about protecting the security of programme data. Keeping these goals top of mind will go a long way toward helping organisations like CHOICE understand the benefits of the loyalty value exchange.

- Rick Ferguson

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