The recent ACCC Customer Loyalty schemes draft report ('schemes' is such a negative word) can be viewed from a defensive point of view (just like my view on the word 'schemes') or from an abundant point of view - an opportunity for programs to improve!
Besides the 'schemes' terminology, I am going to focus on some of the opportunities the report provides for brands and businesses operating loyalty and rewards programs, to improve.
For those who are crafting the strategy for their programs or implementing them on a daily basis, the 97 page report (needs focus to read through) provides context and recommendations to review in order to improve your program's proposition (structure, earning and redeeming), data practices and overall communication.
Some of what I believe programs need to consider are:
1. Improve the clarity and transparency of how you communicate your program's terms and conditions of membership.
Suggestion #1: Make them easy to access, visible, easy to read, use simple language
Suggestion #2: Test the clarity and readability of your program's terms and conditions and privacy policies:
The report analyses the time, number of words and 'reading ease' categorisation of the terms and conditions and privacy policies of loyalty programs - see page 50 of the ACCC Customer Loyalty schemes draft report.
Put your loyalty programs terms and conditions and privacy policy to the test following the criteria and formulae used in the report to see how your program rates.
2. Check your programs legals comply with ACL (Australian Consumer Law) and any changes that are being recommended from the Digital Platforms Inquiry Final Report
3. Take care when you change a program's structure eg earn rates and redemption values.
Suggestion #3. Be clear, be transparent and do what's necessary to advise all members.
4. Watch out for tricky expiry rules
Suggestion #4. See page 26 of the ACCC Customer Loyalty schemes draft report for some of the complaints relating to expiry. Members do not like losing their rewards and benefits and as identified in For Love or Money 2019, members see points as cash,
5. Data practices. 32 pages of the ACCC Customer Loyalty schemes draft report are dedicated to data practices of programs.
Suggestion #5. Read them.
Taking this further and away from the ACCC report, our For Love or Money 2019, loyalty research report identified the following factors loyalty program members ranked as important to them when providing their data to programs.
- How secure is the data
- How is the data used (sharing of data is covered in the ACCC report)
- The reputation of the company asking for details
- Knowing what they get in return for providing their data
- Knowing what control they have over their data
- Evidence of the program's privacy policy (lots about that in the ACCC report)
- Knowing why programs are asking for various data
Whether you have a program with 13,000 members or 13 million members, the report deserves attention.
The action you take depends on your belief in the asset you have built (are building) and your dedication to your members.
Have a happy loyalty day!
