Do you find every brand wants you to join their club or loyalty scheme these days? Supermarkets Woolworths and Coles have their Flybuys and Everyday Rewards programmes. Qantas, Virgin and virtually every other airline has a frequent flyer scheme. Nespresso Coffee Machines even have a ‘club’ that you are asked to join though one of our writers has been a member for 3 years and received no benefit from the club whatsoever.
Why do brands have loyalty schemes?
1) To get you to spend more than you should
The more obvious reason is that you will continue to spend with the brand whose scheme you have joined, perhaps spending more or even ignoring cheaper prices elsewhere in order to get more airmiles or points.
2) To get your details and information about how you live and spend
The less obvious reason to many consumers is that the relatively small rewards that you are given for spending consistently with one brand are really small compared with the value of the data that you provide in exchange.
When you join the scheme the brand gets to know who you are, where you live, how you spend, where and when – very valuable data especially when they have thousands of members and can aggregate the data to see how the population as a whole is behaving.
What do they do with your details?
As an example, Flybuys Privacy Statement says “We collect your personal information to administer and improve flybuys, conduct product and market research, and analyse your purchasing and online activity relating to flybuys and Participants … We may share your information with Participants and with Wesfarmers Ltd and its related bodies corporate for these purposes…”
So what is my information worth?
It’s difficult to put a $ value – but probably much more than you think. The buzz word in marketing and sales these days is “big data” – how can companies analyse what they know about their existing customers (rather than new) to sell them more products or make them spend more? Your data is fundamental to the future of these companies.
Ransom note – what should the consumer do?
Only join loyalty schemes or clubs if you are getting a benefit that has some value to you.
If the scheme has no obvious benefits to you then do not join.
If you have not received any benefit after a few months then leave and make sure your loyalty scheme details, login or card are not used any more.
Addition 21 November 2012
This interesting article puts your worth at anything between $1.68 and $700 USD.