“But why do you need all that customer loyalty data?"

I was in a cosmetics retail store recently when I heard the cashier (let’s call her Cathy) ask a customer (let’s call her Jane) for her information while Jane was preparing to pay. Now, full disclosure, I actually knew who Jane was, a former head of information security for a very large global company and has over 25 years in the data privacy industry. But Cathy wouldn’t have known that, so what happened while Jane was trying to purchase her items was very unsettling to Cathy and the rest of the staff.

Cathy’s retail store has a loyalty program, just like many others. Earn points for spend, and redeem those points for future purchases, just like many others. I’m sure part of Cathy’s job is to enroll customers into this program, as it should be. Depending on customer frequency and average order value, the program probably needs a large amount of new customers (and customer loyalty data) in the funnel to be sustainable and profitable.

But here’s where things went wrong. Cathy tried obtaining Jane’s information. Jane explained to Cathy about the importance of her personal data privacy. Cathy tried talking about coupons and mailers. Jane explained why even being in the social space impacts your digital footprint. Cathy tried one more time. Jane reiterated that she just doesn’t share information, especially because Cathy didn’t know exactly what data would or would not be shared. While the exchange only took less than half a minute, it felt like five minutes. After Jane walked out, Cathy was visibly frustrated, made fun of Jane with the other cashiers in front of the next customer, and again asked robotically for the customer’s information.

What did I learn by that 30-second transaction? Quite a bit, including:

  1. The store has a loyalty program. (That’s a good thing, although a strange way for me to find out!)
  2. The brand definitely had work to do in educating their front line staff on program enrollments. It’s a skill to read people to understand when to drive enrollments and when to focus on the overall customer experience. Both are important pieces of the business. And loyalty begins with getting the customer experience right.
  3.  If you are going to collect customer loyalty and personal data, you need to be able to accurately explain how it will and will not be used. Don’t collect more information than you’re actually going to use. (Don’t ask for my birth date, if you aren’t going to send me a birthday card or gift.) When customer loyalty data is collected and not used, consumers lose a bit of trust in a brand - resulting in the exact opposite of loyalty.
  4. It’s perfectly okay to not ask for everything at the start. Just like a first date, relationships grow over time. All you really need is my email to start, and we can grow from there. Once I see you’re using my customer loyalty data appropriately (see point 3!) and giving me value in return, I’m more likely to engage with you more.
  5. It’s imperative that you build differentiation into your loyalty program. Coupons and mailers, even delivered via email, are at best clutter in today’s world, unless there is something specific to the customer that’s expected or highly relevant.

That short 30-second interchange was a great refresher on the balance of using customer data to drive loyalty. Customer experience for the sake of data collection shouldn’t be sacrificed in the name of loyalty, no matter how good the benefits are. What do you think?