Color Me Stupid About Customer Loyalty


Coupon in hand, one night last week, I headed out to a beauty retailer to buy a certain brand of shampoo that isn't available at the big-box store I generally frequent.

While checking out, the cashier asked if I belonged to the retailer's customer loyalty card program. I didn't, and she had caught me in just the right mood. I figured I'd be back soon enough to replenish my shampoo, so I said, "Sure, I'll sign up." She'd promised me it'd take but a few seconds, and she was right. She asked just a couple of questions, including "What's your birth date?"

That last one gave me pause, less because I'm self-conscious about my age but more because it seemed she thought I might be. "Don't worry," she was quick to add, with a bit of an apologetic look on her face, "I don't need the year, just the month and day."

Hmm. Granted, within the span of the last 15 hours I had worked a full day, cheered my son on at his soccer game, pulled together a quick dinner, did the dishes, and was now out shopping. But did I really look so haggard as to make the clerk concerned how I'd react to being asked my age? OK, maybe. But still, I wasn't so tired as not to be somewhat amused… and altogether intrigued.

Was the clerk as sensitive when asking the age question of any patron signing up for the loyalty program -- or just those who appeared to be over a certain age? Did she only ask the question so sensitively for female customers or did guys, as rare as they might be shopping in this particular type of store, get the same reaction? Was the clerk acting so sensitively on her own, or was she instructed on how to be apologetic when asking for age?

But the big question that popped into mind was about the loyalty-card program itself and not the clerk's intent. Why did the retailer only ask for birth month and day? Certainly the real marketing bonus comes in knowing a customer's age, and for that the company would need the year. Many beauty products and services are ageless, but many aren't. Certainly age would be a critical component of understanding who I am and what I might be enticed to buy. Would a coupon for Glop & Glam Blueberry Blast shampoo be more likely to get me in the store, or one for L'Oreal Youth Code Dark Spot Correcting and Illuminating Serum Corrector?

The age question was still on my mind the next day when, coincidentally, I'd been scheduled to talk with Wilson Raj, global marketing director of customer intelligence, at SAS (this site's sponsor), about customer-loyalty-program research the company had collaborated on in the UK (more on that in another post). So I asked him what he made of the beauty retailer coming up short on age.

Essentially, what he told me was that I shouldn't be duped. The beauty retailer surely would want to know my age, and it'll use other resources to find it out. The clerk, perhaps, might even have filled in an age range she selected based on my appearance. Maybe knowing that I'm somewhere in the range of, say, 40 to 55 and not 20 to 35 would be accurate enough for the company's marketing purposes.

Also plausible is that because the retailer gathered my name, my address, and the month and day of my birth, it can now mine publicly available resources like social sites to learn the year of my birth and other information about me. It'll then be able to append what it's collected to the data it's asked for upfront. "It'll mine and aggregate and surmise," Raj said.

Well, color me stupid -- or at least more tired than I'd thought.

So this beauty retailer may very well have made a tactical gambit that I'd be more willing to join its loyalty program and share personal data if it avoided explicitly asking me how old I was. Interesting, as chances are I'd have signed up for the program anyway, especially if it meant discounts on the special pricey shampoo I've started to buy. As Raj pointed out, life is a journey. Research shows that customers are more likely to share information or give permission if they know the relationship will be relevant and flow into that journey.

So now I'll be watching this beauty retailer's reaching-out to me like a hawk, aging eyes and all. Is it sending me personalized incentives, clearly based on knowledge of my age? Was it, in other words, less than transparent and truthful about the demographics it was after? If so, what will I do in response? Will I shrug my shoulders, grab the latest offer, and head to the store? Or will I cancel my membership and find somewhere else to buy what I need?

What would you do?

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Beth Schultz, Editor in Chief

Beth Schultz has more than two decades of experience as an IT writer and editor.  Most recently, she brought her expertise to bear writing thought-provoking editorial and marketing materials on a variety of technology topics for leading IT publications and industry players.  Previously, she oversaw multimedia content development, writing and editing for special feature packages at Network World. In particular, she focused on advanced IT technology and its impact on business users and in so doing became a thought leader on the revolutionary changes remaking the corporate datacenter and enterprise IT architecture. Beth has a keen ability to identify business and technology trends, developing expertise through in-depth analysis and early adopter case studies. Over the years, she has earned more than a dozen national and regional editorial excellence awards for special issues from American Business Media, American Society of Business Press Editors, Folio.net, and others.

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null values are still information
  • 9/24/2013 1:25:41 PM
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Even if the company truly respects your wishes to not give your birth year (and they don't use the additional information you gave to look it up), even having a null value can be used predictively.  By not giving your age, you are in a highly biased sample segment, and this alone can be used predictively.

Re: null values are still information
  • 9/24/2013 1:46:07 PM
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I like Beth's wording about the customer journey, and how their perception of a data request is related to their journey.  People certainly don't mind someone knowing their age if the information makes sense (the right Robotussin - adult vs kids, for example) and if the agent asking for the information can be trusted.  That last part plays a role in customer service success. Beth highlights yet another factor in how data becomes a big data factor. 

Re: null values are still information
  • 9/24/2013 4:21:45 PM
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Thanks Pierre, but I don't want to be taking credit for the journey bit. I like that description too, and we have to give credit where it's due... which is with Wilson Raj.

Customer Loyalty
  • 9/24/2013 5:15:52 PM
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Of course, with your name and the state where you live, they can match you against databses like the ones used by data list companies (you know who they are) and easily match the month and date to get the year. But of course the clerk does not really care - she is only incentivized to ask for the data.

Nonetheless, what is the price at which you are willing to sell your private data? Recently my 15-yr old was enticed to fill out a form at a donut shop offering a free donut in return for joining the email fan club. I told her that her private email address was worth more than just a donut.

Re: null values are still information
  • 9/25/2013 8:13:49 AM
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You make a great point about the use of null values. But I don't think that's what's going on in this case since it wasn't that I opted not to give my birth year but that the retailer didn't  ask me to provide it. You make me wonder, though, if it did ask for birth year and I had opted out of providing that information would I have then been placed in a highly biased sample segment, per your suggestion, AND placed in an approximate age category by the cashier, AND/OR targeted specifically by age through data mining of other sources? Yikes.

Re: null values are still information
  • 9/25/2013 1:52:08 PM
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@Beth I would have signed in to the loyalty programme too. If you are planning to buy this expensive shampoo in the long run it would be prudent to be a part if the loyalty programme they have. They might even promote other products at a discount.

Re: null values are still information
  • 9/25/2013 3:28:32 PM
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I think so. But it does mean that I'll have to suffer through marketing campaigns that don't interest me whatsoever. Just yesterday, for example, I received an email with a discount offer on salon services there. But I have no intention of getting my hair done at the beauty retailers. If the retailer knew me a little better, it'd know this. ;-)

 

Birthday
  • 9/24/2013 1:34:07 PM
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While the retailier would love as much personal information as you are willing to provide, my guess is your birth month and day will be used to email a discount coupon to you on your birthday next year. Happy Day!

Re: Birthday
  • 9/24/2013 1:50:20 PM
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I'll be waiting!

Re: Birthday
  • 9/24/2013 10:10:02 PM
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@Beth I have a Banana Republic Visa card. It does offer me birthday bonuses of $15 to be used toward purchases. I also noticed that it has some kind of verification system tied to the birthdate. When customers use it for purchases, the cashiers ask for the driver's license. They don't do this to match the person with the photo ID but only for the expiration date (I know that's all they are concerned with  because I recently placed an order via phone in a store for an item that was out of stock in my local store and online). In NY, driver's licenses always expire on a person's birthday (so you'll remember when you need to renew). 

Re: Birthday
  • 9/25/2013 1:56:04 PM
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It does look like sales agents are reluctant to ask for a customers age. in fact during a marketing call I received today when they asked for the age they said,' I assume you are over the age of twenty three.' Why twenty three? It looks like they are going out of their way not to offend people specially ladies when they ask for the age.

Re: Birthday
  • 9/24/2013 5:29:30 PM
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I agree with you, BethK. Sending you a birthday card is one way to increase affinity. But they probably are using more sophisticated data-mining tools to get at your birth year, too, and there's not much you can do about it. Are there other companies that specifically don't?

Price Loyalty
  • 9/25/2013 8:12:59 AM
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I don't think any manufacturer or retailer could snag me other than on price. There's not too many products I'll be "loyal" too unless their pricing is attractive. So I wonder how many are out there that behave likewise, no brand loyalty, but very attentive to the best price for comparable products?

Re: Price Loyalty
  • 9/25/2013 8:20:07 AM
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Ah, I would suspect quite a few of your fellow shoppers are exactly like you -- and that's exactly why retailers like Walmart and, more recently, Albertson's, have done away with their customer loyalty card programs and instead market themselves on value pricing alone. 

Re: Birthday
  • 9/25/2013 8:02:15 AM
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Yes the month and day will likely be used to send promotions on her birthday but I also suspect that they will determine her birth year at a later date or that they only really want a rough guess in instances like this.  I've run into cashiers who admit that they don't need all of the information and that they have been instructed to put in their best guess if a customer won't answer a specific question.  I got into an argument with a cashier who was pumping my 10 year old daughter for information in a store while she was spending her allowance.  I had to have a talk with my daughter later about not handing out information to strangers.

Re: Birthday
  • 9/25/2013 2:51:24 PM
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@SaneI wow, you probably could have had a talk with the pumper. I'd think that the privacy protection inherent in COPPA should extend to real life info collection of that sort.

Re: Birthday
  • 9/26/2013 7:19:30 AM
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The girl behind the counter was dazed to say the least when I told her my daughter wouldn't be giving her any personal information. There were a couple times where she said "I just need her email address" and I replied that my kids don't hand out personal information to people that they don't know.  It was awkward and she was a bit confrontational, it really made me not want to take my girls back there again but I understand that this was probably part of a procedure that she didn't really understand and she was just doing what she was told to do.

Re: Birthday
  • 9/27/2013 4:03:49 PM
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" It was awkward and she was a bit confrontational, it really made me not want to take my girls back there again but I understand that this was probably part of a procedure that she didn't really understand and she was just doing what she was told to do."

@SaneIT,

I think you're right for not wanting to take your girls back there.  Sure, the girl was just doing her job but any kind of confrontational attitude is simply not acceptable.  It sounds to me like the company needs to do a better job of training their employees on how to handle a customer's refusal to give information.  Actually, this is something that every single company should be doing.

Re: Birthday
  • 9/28/2013 8:11:15 PM
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@SaneIT that store is just looking for a lawsuit if that's they way they go about things. Really, while you can probably get away with nagging your adult customers for information like that, I'm absolutely certain it is illegal to try to draw such information out of children under 13 without parental consent.

Re: Birthday
  • 9/30/2013 7:17:29 AM
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I'm not sure what the legality is but I assumed they could just claim ignorance and skate by if someone confronted them.  My girls love the store so it's hard to tell them we're never going back.  We actually talked about going back to they can spend some allowance money and the first thing from the younger one was "if they ask me for my email address I'm going to give them a fake one".  I had to laugh then let her know that she can just tell them she doesn't have an email address.

Re: Birthday
  • 9/30/2013 8:54:01 AM
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@SaneIT yes, and she could also offer this URL http://www.coppa.org/comply.htm

Re: Birthday
  • 10/1/2013 7:32:59 AM
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That covers information collected online but what about face to face collection of data?  Is consent by the parent implied if I'm standing there next to my child letting them blurt out every piece or information they are asked for?

 

Re: Birthday
  • 10/1/2013 9:33:08 AM
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@SaneIT Once they ask for an email for the child, they already seem to be crossing over in the online guidelines. I receive emails from K'nex and other companies every time they send something or receive something from my kid online, including signing up for emails. They specify that they do this to comply with COPPA regulations. 

Re: Birthday
  • 10/2/2013 7:22:18 AM
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I get emails from sites that my kids have accounts on to play games, like Lego and Webkinz for the initial setup of their account to be sure they are allowed to do so but I've never seen a follow up or an email saying that they are sending my kids in game messages which they do on birthdays for example. Would this be outside the rules of COPPA?

Re: Birthday
  • 10/2/2013 10:53:02 AM
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@SaneIT Perhaps once they inform you that your kid has signed up and get a genral permission for particular types of email, they don't have to send a copy each time. My youngest actually doesn't have her own email, so she puts down my gmail account for herself and my verizon one as the parent one. So I do end up seeing all her emails anyway.

Re: Birthday
  • 11/11/2013 2:53:14 PM
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In my last two engagements, we discovered that customer age quickly became less relevant as the relationship matured. Purchase history and online behavior trump age-based treatment, at least in my limited experience. Some personas, for instance the "benevolent grandparent" as we came to call it, aren't treated well using customer age. Valuable personas have behavioral signatures that often defy age. After two or three shopping or purchasing experiences, digging up a birth year just wasn't helpful. Sure, we could correlate with this or that additional database, but the juice wasn't worth the squeeze, as they say. We did try to collect the birth day to send out a personalized coupon, and we told the customer up front that was the reason we didn't want the birth year.

Is anyone getting much use from the birth year?

confusion -loyalty cards vs loyalty value
  • 9/24/2013 9:14:24 PM
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I specialize in Business Analytics with an enphasis on decision support systems to create or tighten corporate strategy.

My comment may have been addressed though I want to make the topic clear from an analytics point of view.

I often encounter conversations relating transactional data to "loyalty" cards. Tracking transactions via a card with a unique ID is technically not a means to track loyalty. This method tracks product purchase patterns to create up/cross sells programs via market basket analyses. As well as potentially helps calculate the customer life cycle and purchase pattern cycles. Bottom line I beleive the name of the card has been misleading, it's not a loyalty card, it's more of a tracking device to better serve the customers purchase pattern.

My point is a Loyalty measurement and category assignment has been known to created more operational improvements and product selection to give the customer the option to become loyal.

Most of the information to measure loyalty is obtained from the shopper and customers. Either face-to-face or phone interviews, email surveys, custome panels,, etc. The voice of the customer VOC is the optimal metric.

The VOC to capture ranges from satisfaction, refferal, and most important the level of expectation vs. performance of the major facets for your business. Let's say we include store associate professionalism/attire, cleanliness of store, hours of operation, parking lot lighting, changing product tags during the mid-day of the last day of the promotion, associate product knowledge, out of stock, display presentation, manager response time, etc.

It appears this method may not apply to some retail but mainly should apply to most. And it also depends on executive support, resources, and budget.

After the VOC is gathered then metrics are calculated to identify the customers in the 3 buckets; advocacy (finds a particular specialty and shouts to the world), cognitive (particluar with product details and pricing, out of stock, really does the research), and overall retention (customer for convenience, and may or may not have a choice where to shop, or just feels comfortable and will not shop despite coupons from competitors).

The analysis will identify most important facet of the business that would address lower cost or an increase revenue. Affected areas can be operations/marketing/advertising/merchandising.

My opinion about retail preference pertains to the loyalty measurement, and really want to voice my opinion that the "loyalty card" does not always promote loyalty and may lead to picking lower margin products.

 

Here is a process that a shopper/customer probably follows:

Interest in a product

Perception

Intention

Expectation

Experience

Performance

Assessment

Satisfaction

Zero-Tolerance

and 3 degrees of Loyalty is created to identify categories for

Cognitive,

Advocacy, and

Retention cusomters.

I did enjoy the time,

Ken

http://www.linkedin.com/in/kennethrkrawczyk

Loyalty and the perks
  • 9/25/2013 1:58:03 PM
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 Beth I guarantee you will get a birthday something from the retailer. It was my birthday this month and I got more free stuff than I can probably use! Also with your name and address the retailer can bounce your data against any number of public databases and it will append your age--sorry we can't hide from much anymore!

Re: Loyalty and the perks
  • 9/25/2013 3:17:40 PM
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Free stuff, really free? I've received nice savings offers -- iike 40 percent off, say, my birthday purchase, but nothing actually free. And, I know, there's no hiding now!

Re: Loyalty and the perks
  • 9/26/2013 12:33:32 PM
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@Beth,

Nothing is really free, but but a 40 percent discount might be a real deal depending of the actual price of the item. But discounts might just be a marketing strategy to make you buy more items.

Re: Loyalty and the perks
  • 9/27/2013 11:40:06 AM
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That's true. There's so much cushion between the wholesale and retailer prices. But we as consumers are at their mercy!

Re: Loyalty and the perks
  • 9/30/2013 10:47:26 AM
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Yes Beth actual free stuff. A local restaurant gave me a glass of champagne and dessert. I received $15 no strings attached from a vendor. Another gave me $10 no strings attached.

Granted I did get some emails with a birthday wish and nothing else--if you are listening Chicos don't bother next year! :) I would call that birthday spam!

 

Re: Loyalty and the perks
  • 9/30/2013 1:15:37 PM
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@Maryam -- you definitely know how to pick a good loyalty program! I'm surprised Chico's doesn't offer a discount for your b-day. I wonder if it doesn't for any customer or whether you don't make the cut in terms of dollars spent there? I'm not a frequent Chico's shoppe; in fact, I've only been to the store once. But while there, I was absolutely flabberghasted by a woman next to me at the register. She was definitely a frequent shopper, but used one of the sales clerks there to do the shopping for her. She was returning some items and exchanging a few others for different sizes. Her receipt was probably two feet long. I kid you not. And I definitely got the impression that this was a regular occurence. I can't imagine Chico's not giving her a nice birthday discount!

 

Guessing age is easy if you have other info
  • 9/26/2013 9:34:20 AM
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Most of my Facebook friends publish their birthday (month/day)...because those birthday messages are such a big part of the Facebook experience!

But many withhold the birth year from the public. I suppose that, like you, they are trying not to give up too much information.

But do you know what they do share? High school and college history, including name of institution and year graduated -- so they connect with their old school pals!  I wrote a Facebook app and SAS program that shows how easy it is to infer a birth year from this.

Also, public records can reveal this information.  In NC it's the law that voter registration records be available to the public in electronic format.  Up until just a few years ago you could actually download the voter rolls in Wake County in CSV, revealing name, districts, party affiliation and birthday.  It's a bit tighter now for the general public, but surely a marketer could find or purchase a list with similar information and combine it with what they've collected from you.

Re: Guessing age is easy if you have other info
  • 9/26/2013 12:16:40 PM
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Chris -- I love that you created and shared the Facebook app and SAS program for inferring year from day and month. What do you think we're talking about here in terms of time involved to gather a customer's month and day of birth at POS and then either mine Facebook or a purchased or public database and use a program like the one you've created to get to a person's age? Is it worth a marketer's time and effort -- or only if there's a remarkedly compelling reason to get that info but not ask the person for it?

Re: Guessing age is easy if you have other info
  • 9/26/2013 1:06:48 PM
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Beth - I'm not a marketer by trade, but here's what I think.  The best predictor of how a customer might respond to an offer is probably his/her past behavior -- the classic recency-frequency-monetary method of segmentation.  So if you can track behavior of a customer, regardless of demographic, that's probably most useful.  If you are looking for a YOB to help with segmentation, then I think you limit the effort to what's easy to get or to infer. (Did I buy Geritol versus baby diapers? Guess my age.).  If you are looking for specific birthday info for important promotions (as casinos do), then you better make sure the customer provided that info willingly, lest you creep them out completely.

Re: Guessing age is easy if you have other info
  • 9/27/2013 11:35:31 AM
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Behavior tracking can go so wrong, though -- irritatingly so, I might say. I can't tell you how many mailed promotions I've gotten in the last year from Buy Buy Baby. I'm assuming this is because I've bought a few baby items during this period -- but all as gifts. I didn't actually purchase anything at Buy Buy Baby, but I have shopped at Bed, Bath & Beyond so I have to think the parent company must be doing some cross-referencing of some sort and maybe tapped into another purchasing database that had info on my baby-related purchases. I suppose I wouldn't be so irritated if I didn't know that the company could be using better analytics to optimize its marketing campaigns -- and save money in the process. 

Customer Loyalty
  • 9/26/2013 2:08:12 PM
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It's difficult to resist large discounts when it's free and takes seconds to sign up for a customer loyalty program. Merchants can get use rewards and discounts to get customers to give out information they would otherwise not. 

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