It seems that so many companies in the US now have some sort of "customer card" or loyalty program designed to bring them more repeat business. Andy Warren wrote a blog post recently on the topic and inspired me to write a bit more about the topic.
So many business studies over the years have shown that it costs much, much more to acquire a new customer than retain an old one. And while you can only convince a person to spend so much money with you, that repeat, steady spending is the backbone of so many businesses. It would seem to me that not offering a discount for loyalty is a mistake in your business.
However these programs are implemented in many different ways, with different data requirements. Some use it to recommend other products, some might offer you discounts or coupons, some a free gift of some sort over time. All of these are good uses of the customer relationship, but I don’t think many of them are well thought out.
For example, many programs at retail stores ask for a phone number. As Andy mentioned, he doesn’t want to disclose that information, and it’s a bit of a privacy violation. I agree, and I often transpose two digits as Andy does to ensure privacy. Most of these companies use a phone number since it’s a relatively unique way of tracking customers, and good enough for those purposes. Some might use directories to get your address for direct mail, which is a bit of an abuse to me, and others might sell the number for a profit. Whether that’s good or bad, I think that the problem is that a phone number is relatively personal and I’m not sure how well that these companies secure that data.
Birthdays are another common ask, and I seem to get rewarded on Apr 1 quite often. That’s fine with me, but it makes me think that maybe they should just ask for an anniversary date instead. I’m sure many people could pick a special day that didn’t give away some identity information like a birthday. A pet’s birthday, perhaps. That way there would not be a data security issue.
I like the idea of loyalty programs. When I find a good business that I like, I want to continue to patronize them, and there’s nothing wrong with mutual benefits from doing so. However as we become more and more digital, and we try to incorporate that data into better programs, I am concerned that we will unwittingly create huge security headaches. For those of you that work with businesses, perhaps on programs like this, please keep that in mind and remember that this is information that you should secure well.
Or better yet, build a program that identifies customers without requiring identity information like phone number, birthday or SSN. Just use some type of Customer ID instead.
Steve Jones
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