The Economics of Loyalty Programmes
Data, Personalisation and Privacy
Loyalty programmes collect detailed purchase data, allowing personalised offers, but raising privacy concerns.
Points are paid for with information.
What is tracked
What you buy, when and where.
Use
Personalised offers and pricing decisions.
Privacy
Consent and data protection laws apply.
Trade-off
Customers give data in exchange for rewards.
A targeted coupon
After buying diapers, a customer gets offers on baby products.
Assuming loyalty is one-sided
Firms gain data in return for rewards.
Key takeaways
- Purchases are tracked.
- Data enables personalised offers.
- Privacy law applies.
- Rewards trade for data.
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