I know we said 'Don't call it a loyalty program', but we're not sure 'Customer loyalty scheme' is much better. Still, we're happy to see the ACCC advocate for zero party data and active and informed consumer participation in brand incentive programs because we've been banging on about it for years - ah sweet, sweet validation!
In the ACCC review of 'Customer loyalty schemes' report released yesterday, the authority tasked with enforcing the Competition and Consumer Act (2010) called out the poor practices that Omneo was built to fight. With a particular focus on credit cards, frequent flyer and supermarket programs, the report reprimands brands for not communicating privacy policies; terms and conditions and for using consumer data in a way that does not align with broad consumer preferences or provide meaningful control.
Here’s our take on the recommendations, along with Omneo specific context to get brands thinking about how to defend customer interests in an ever-changing competitive landscape.
Recommendation 1: Improve how loyalty schemes communicate with customers
Ensure that terms and conditions, expiries and program changes are fairly and adequately communicated to consumers with the right information at the right time to ensure consumers can make informed decisions.
Omneo naively powers three email flows to ensure all customers have sufficient opportunity to redeem any incentives they have earned:
- Issue - On earn, sent within 24hours
- Remind - 7 days prior expiry
- Extend - 1-2 days before expiry
In addition to frequent and consistent communication, Omneo’s Profile Portal provides a hub for all consumers to see and actively manage all the information they have created or shared with a brand. Its real-time incentives, communication preference centre and claim transactions functionality, empowers customers to enjoy their entitlements.
Recommendation 2: Prohibition against unfair contract terms and certain unfair trading practices
Unfair trading practices to be punishable by law.
Yeah, this one is pretty straight forward. Don’t be evil.
Recommendation 3: End the practice of automatically linking members’ payment cards to their loyalty scheme profile
Coles, Flybuys and Woolworths Group automatically link customers payment details to their loyalty profiles to track their purchasing behaviour and transaction activities when they do not scan their loyalty card.
These problematic data practices decrease consumer privacy, increase the opportunity for discrimination and exclusion and erode consumer trust. We need to ensure we focus on convenience over creepiness, no matter how good your intentions are. Ultimately if you’re not going to show the linked purchase on my transaction history, then don’t track it. The practice of ‘shadow profiles’ has been brought into the spotlight based on similar practices undertaken by Facebook and other tech giants. This practice only serves the marketer and not the customer..
In our guide to Customer Onboarding we provide brands with insight on how to build strong and trusting customer relations by only asking for, and storing data that brings utility to the customer, advocating for and executing data practices that keep customer interests at its core.
Recommendation 4: Improve the data practices of loyalty schemes
Loyalty schemes need to review their approach to presenting consumers with information about how they handle consumer data and provide consumers with meaningful control over their data.
The implementation of Omneo’s Profile Portal does just this - putting the power of data in consumers’ pockets, allowing them actively populate, opt-out or revisit account information without having to leave their in-store or online experience to do so.
We need to ensure that customers are explicitly creating connections between their brand account and other ecosystems. Omneo Extensions ensure that brands only create experiences that respect privacy and are opt-in by design. We do not support background ‘enrichment’ of customer profiles from 3rd party data sources without explicit customer consent. Omneo allows a customer to link their brand account to a frequent flyer program or social media account, but it is never automatic or behind the scenes.
With customer profile information at the centre of our business, data privacy is our highest priority, the solution and system have been designed with security and privacy as a primary and critical concern since the outset. You can review our privacy principles in the Omneo Security Guide.
Recommendation 5:Strengthen protections in the Privacy Act and broader reform of Australian privacy law
The fast-changing nature of technology means legislation often gets left behind. The final recommendation of this report calls for updates to the Privacy Act that anticipates these changes, such as a broader definition of 'personal information', strengthened notification requirements in the collection of information, and increased consent requirements.
We believe that if you operate from a customer-centric mindset, ethical and empathetic practices will follow. Europe’s GDPR legislation was a watershed moment for global brands and we hope to see similar - or even stronger - protections enacted for Australian customers. Brands that make money through make-a-buck-today ad-tech weaponry, over genuine loyalty built over time with great experiences will start feeling the heat as these changes come into effect.
We're excited that the principles we've been operating on for years are beginning to be reflected in the expectations of consumers and the organisation that have been created to represent them.
If you have questions or concerns about how your loyalty, customer database or advertising practices compare with the ACCC report on Customer Loyalty Schemes, GDPR, or the Australian Privacy Principles - we're here to help!