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Loyalty Program Compliance with Data Security & Privacy Regulations.

Data security and customer privacy are critical parts of every successful customer loyalty solution. Recent privacy laws and regulations reflect how individuals value their personal data and online privacy. It’s vital those individuals trust your brand enough to voluntarily share their data — and trust you to keep it safe. Not adequately securing customer data can result in obvious loss of loyalty and damage to your brand’s reputation, as well as regulatory fines.

Loyalty programs are one of the most important tools in obtaining customer data and understanding their behavior. However, to protect your customers’ data and maintain your brand’s reputation, it’s essential for brands to comply with current privacy laws and regulations, as well as those anticipated in the future.

Loyalty Member Data Security & Privacy Regulation Compliance

The modern emphasis on user privacy and data protection has resulted in data and privacy regulations in countries around the world. However, there has been no creation of a federal standard for data privacy in the United States. Instead, individual states have created and continue to create statutes intended to protect consumer privacy.

Every digital marketer is likely aware of the two most comprehensive data privacy laws to date: Europe’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). The standards set by these two laws provide best practices for brands to follow as part of their digital marketing strategies.

Balancing Privacy And Personalization

Many online users have valid concerns over online privacy and data security, yet they also desire personalized experiences from brands. This tightrope-walk has made it challenging for marketers to create amazing customer experiences while also complying with privacy regulations.

Balancing compliance and customer experience requires being transparent and considering the value exchange. When joining loyalty programs, customers expect to be recognized, receive a personalized user experience, and likely have access to member-exclusive sales, discounts, etc. This is part of the value exchange in joining the program: customers share data in exchange for the benefits of a personal and relevant loyalty experience. Marketers can use their loyalty members’ voluntarily given data to better understand their customers and further optimize their loyalty solution’s personalized customer experience.

Loyalty programs should always be opt-in and permission based. Your customers must voluntarily provide their information and then trust your brand to protect and not misuse that data in order to maintain brand loyalty. Proper disclosures when your members opt-in should make clear to customers what data is being collected and how it will be managed.

“Of course, brands need to ensure they are compliant with regulations, but should not become so risk-averse that they shy away from any level of personalized customer experience.” —Graeme Cook, Brierley Senior Security Administrator

Loyalty programs are one of your brand’s most important marketing tools and method to collect customer data. Loyalty programs are able to both comply with privacy laws and provide a personalized customer experience. This positions customer loyalty and rewards programs as an important foundation for the future of brand marketing.

Steps For Privacy & Data Security Compliance

Brands may find it overwhelming to ensure their loyalty solution complies with evolving data and privacy regulations. Many companies wonder where to start, or they may have trouble determining which methods are best to comply with privacy and data security regulations.

Brands should follow these steps to remain compliant with privacy and data security laws:

  1. Read and fully understand the regulation or legislation

  2. Fulfill the regulation by implementing required data security protocols

  3. Act upon customer requests regarding their data quickly and appropriately

  4. Ensure the accuracy of personal data utilized in communications, customer experience, offers, etc.

  5. Monitor the news for new privacy regulations

How to Prepare for Future Privacy Regulations

How should brands best prepare themselves now for additional, or potential, legislation coming down the road, especially in the United States? In the future, additional states and countries will enact regulations and legislation affecting online privacy and data security. Bearing this in mind, companies should follow these best practices to prepare for future data and privacy regulations:

  1. act proactively to ensure the protection of loyalty members’ data

  2. follow the principles outlined in GDPR/CCPA, regardless of whether your sales area operates in Europe or California

  3. show transparency to deepen or build additional loyalty

  4. be consistent across all brands

By proactively following these best practices and ensuring your loyalty solution meets GDPR/CCPA requirements, you will build greater trust with your customers and save your company larger headaches in the future.

“The short answer is that yes, companies should prepare all their brands to follow the same data and privacy standards across the board.” —Elisabeth Keller, Brierley Chief Client Officer

When brands operate in multiple regions with differing privacy laws, developing a consistent loyalty strategy can be difficult. Because of the variation of laws and regulations in different countries and states, ensuring your brand is compliant where it operates can quickly become a major headache for marketers.

Update Your Loyalty Program And Protect Your Brand

Complying with privacy and data laws means taking measures to protect and secure your loyalty members’ data. Your loyalty program’s data security protocols may include common aspects like proper data classifications, data loss prevention, encryptions, access controls, and more. That said, not all ‘common’ data security approaches are easy to implement, straightforward to manage, or appropriate for your specific requirements.

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