Loyalty Schemes And GDPR


With GDPR now officially in force (May 25 2018 was the day the new EU General Data Protection Regulation became law) loyalty schemes have become an even more important way to engage and retain customers.

That’s because under GDPR if a customer has not given explicit consent for marketing communications, your marketing department can no longer use their personal data to contact them and promote products or services. Post-GDPR loyalty schemes are potentially one of the most effective ways to get consent from customers, by offering them clear benefits in exchange for their personal data.

However, to be successful loyalty schemes need to deliver what customers want and the promises of your scheme. Supermarket Tesco recently discovered this having made the decision to cut some of its Clubcard rewards. Many customers use this loyalty scheme to make significant savings on days out and restaurant meals, often saving for months or even years to get enough points. After a campaign led by the Money Saving Expert website, the change has been postponed until June 10. The backlash against Tesco demonstrates how important it is to deliver on the promises of a scheme to retain customers and keep them positively engaged.

Building Up Your Loyalty Schemes In A GDPR Age

Post-GDPR many companies will now have had to delete the personal data on customers that have not given consent for marketing and loyalty scheme communications. As a result marketing lists may be depleted but will be of a higher quality. Customers that have given explicit consent are receptive to your communications and want to engage with your business.

As such the personal data they allow you to process is of more value to your business than your marketing lists were previously. This data provides excellent insights into your existing customer base, which you can use to retain customers as well as attracting new customers that share common characteristics.

Perhaps the first step post May 25 2018 is to reward those customers that have provided you with consent. It is likely that you will have given customers some compelling reasons to stay with you. Now is the time to say ‘thank you’ and engage with customers you know are high quality. Bonus points or exclusive discounts for loyalty scheme members, is one way to drive engagement and sales.

Of course, as a result of all the hype around GDPR in the last few months, customers are a great deal more aware of how their personal data is being used. We predict that even when a customer has given consent, they will be more likely to unsubscribe from marketing lists and loyalty schemes in the next few months than ever before.

Therefore, it is essential that all your loyalty scheme communications deliver value for their recipient, nurturing the relationship and building trust and loyalty. Personalisation is a key way to do this, delivering highly targeted and relevant communications that engage customers. With higher quality data available your business is in a better position to personalise your communications more effectively.

Furthermore, if a customer feels valued and respected by your brand, they could potentially share more valuable data than ever before, so long as they are rewarded in return. Customers will also be happy to recommend your loyalty scheme to their networks if they believe they’ll also get value from membership: growing your loyalty scheme with more high quality customers and data.

Attracting New Sign Ups To Your Loyalty Scheme

As well as nurturing loyal customers you will also want to get new sign ups to your loyalty scheme. Here’s where an opt-in for a loyalty scheme has clear advantages over an opt-in for generic marketing communications. With targeted and personalised incentives and benefits, customers that actively want to engage with your brand are more likely to sign up for a loyalty scheme than allow you to add them to a standard marketing list.

The following tips will help you increase sign ups for loyalty schemes and rebuild those lists:

  1. Get the basics right. Q) What builds loyalty more than points and rewards? A) A great customer experience and payment process. You’ll struggle to get loyalty scheme sign ups, whatever the incentives, if your customers have a hard time using your online checkout. In fact they may abandon their shopping basket before they even get to your loyalty scheme sign up.
  1. Make it easy. Online transactions need to be quick and easy, so any additional steps must be kept to the minimum. Integrate your loyalty scheme with your online payment journey so that it only involves a few clicks to sign up using the personal data the customer has already provided.
  1. Be clear on the benefits. With customers more aware of the value of their personal data, it’s important that your loyalty scheme sign up process clearly promotes the benefits of joining. It’s a transaction – their personal data in exchange for your rewards. Make sure those rewards are targeted and personalised to increase sign ups.

Many commenters are highlighting the opportunities that GDPR presents, as well as the solutions that can militate against any losses suffered as a result of compliance. Loyalty schemes are as part of the online customer journey are certainty an opportunity, as long as they deliver what they promise.

To discuss how to integrate loyalty schemes with your payment gateway, get in touch with our team. Call 0333 240 6000  or email [email protected]