Global Brands Get Creative with Post-Pandemic Loyalty Strategy
As the country reopens and consumers step outside once again, brands are beginning to reimagine their loyalty programs for a post-pandemic world. That means pivoting away from strategies that rely on third-party data and providing more customers with relevant experiences in owned digital channels.
While customer data has always been at the core of most loyalty strategies, shifting consumer behaviors and tighter privacy restrictions are prompting an industry-wide pivot toward strategies with increased dependence on first-party data. A confluence of circumstances — particularly, new privacy regulations, the demise of third-party cookies, and shifts in consumer spending behaviors following the initial onset of the pandemic — are prompting brands to change the way they connect with customers in both online and offline environments.
“After GDPR was introduced in 2018, and CCPA in 2020, several other regions have announced and signed legislations on data privacy while others have submitted similar bills,” says Sav Khetan, vice president of product at Tealium, a company that provides real-time customer data orchestration. “These regulations impact the transparency of data being collected, the collection and enforcement of consent and permission for the various purposes and vendors associated with that data, and an ability for organizations to access and delete data at the individual level.”
New Loyalty Strategies
Some of the world’s largest brands are toying with creative new concepts meant to drive more interest in their loyalty programs. Within the travel sector, United Airlines is one of a handful of companies offering perks to consumers who’ve been vaccinated against Covid-19. United’s “Your Shot to Fly” campaign, which offers a chance for loyalty members to win free flights for a year if they’re vaccinated, relies on first-party data from members who’ve opted-in to share their status.
As with many of the more creative approaches to incentivizing loyalty, United’s campaign requires the company to navigate a number of privacy landmines. Using customer data as it relates to vaccines is a grey area currently, as authorities, courts, and entities have yet to make a final decision on regulations around vaccinated information. However, if customers are giving permission when sharing the information, and they have the ability to delete it when they like, that gives brands the protection they need, Khetan says.
“The wide understanding is that HIPAA does not apply to all businesses, but to medical, clinical, and insurance related businesses only,” Khetan says. “However, Covid-related health data does fall into the sensitive data category and should be treated with the same care as any personal information — collected with consent and transparency.”
Aligning Experiences with Values
One of the challenges that brands must consider is how they can adopt more creative loyalty strategies without sacrificing customer trust. Khetan says customers want to trust the brands with which they partner, and they want to trust that their data will be used responsibly and not without their permission. Khetan says two of the best ways to earn that trust are with a contextual value exchange and with a personalized customer experience.
“When a customer understands how their data is being used and can see a clear value in sharing that data with the brand, they are more likely to share their data and invest in the brand — leading to loyalty and a deeper relationship,” he says.
Digital-first brands like Stitch Fix, for example, are able to get customers to share personal details during the initial account creation process by offering personalized recommendations for clothes in exchange for the information. Customers trust that Stitch Fix will not use their data for any other reason. Learning from this example, Khetan says brands should align their experiences with their core value propositions and make sure the request for data is contextual to the value being offered.
“[Brands] must bring as much transparency to their data collection practices as possible,” Khetan says. “In exchange, they can offer tailored experiences and benefits to the customers, leading to deeper engagement and loyalty over the long term.”
Stephanie Miles is a senior editor at Street Fight.