Posted: 30 Sep. 2019 03 min. read

Can you have loyalty without trust?

Turning compliance into a competitive advantage

Recently the ACCC released a report into Loyalty schemes in Australia[1], effectively putting all loyalty and reward schemes on notice. 

The ACCC has three main concerns. The first is whether consumers were informed properly and that they received the benefits that were advertised. The second is the data practices, including the collection, use and disclosure of consumer data by the loyalty schemes and their partners. The third is the potential impact on competition, particularly for new entrants into the market.

Compliance should not be the only focus

The report has highlighted a lot of important gaps between what consumers are feeling and expecting and what Brands are delivering. This is as an opportunity to strategically design compliance so that it aligns and empowers the brand, rather than simply wait for regulators to dictate to brands how they should treat their Customers.

Loyalty is not the problem 

The underlying problem is how brands are managing their customers and their data rights. Common to all recent investigations, from the open banking initiative[2], to the current Loyalty Scheme report is the central importance of how businesses are treating their customer’s data. 

This rise of customer right to their data is the result of a few megatrends. 

The explosion of Data

Between 2015-2017[3] 90% of the data in the world was created and over 2.5 quintillion bytes of data are created every single day, which is predicted to increase with the added adoption of IoT devices. 

The dark side of personalisation

As we enter the experience economy, customers are demanding increased personalisation, omni-channel experience, frictionless transactions and better recommendations. But customers soon realised that there was a trade-off. Customers are realising the value of their data. Commonly quoted when someone complains about a free digital platform[4]  - “If the product is free, then you are not the Customer, you are the product”, this attitude from consumers does not create a good foundation for a trusted relationship.

Regulators have been slow to keep up

The speed of digital disruption has outpaced regulation, but we are now seeing strong attempts by regulators to put in place consumer inspired guardrails. Recent examples include the European Union and the introduction of the GDPR[5], and the California State Senate passing AB5 directed at the gig-worker platforms. Largely the responses have been reactive which has meant that businesses have not had an opportunity to put in place a proper strategic approach to compliance, opting to merely “tick a box” and comply. Local CDR initiatives have focused on data portability & the right to access. With a sector by sector approach, starting with banking, with energy and telecommunications proposed to follow. 

The rise of Customer Data Rights

What we are now seeing is a realisation from customers about the importance of personal data and its acceptable uses.

  • 69% of Consumers are more concerned about their online privacy than 5 years ago[6]. 
  • 90% of Australians say it’s unacceptable for companies to use personal data for the purpose of tailoring ads and offers to consumers. [7]
  • 90% say it is a misuse of data if it is used by an organisation that they have not dealt with and for other purposes than it was provided for. [8]
  • 36% of Australian digital platform users agreed with the statement ‘when a digital platform has a privacy policy, it means it will not share my personal information with anyone else (including other digital platforms)’[9]. 
  • 95% of Australians said they wanted companies to provide opt-out options for data collection[10]

There is a huge gap between how brands have used data and how Customers want their data to be treated 

Customers buy brands they Trust

In the latest Edelman 2019 Trust Barometer Special report[11], 81%  of respondents said that trust was a deal breaker when deciding which brand to buy. The report showed that when brands have earned Trust we can see how they are rewarded by customers. 

  • +28pts uplift for Buy First (First to try new product/service of the brand & Happy to pay more for this brand’s product or service)
  • +33pts uplift for Stay Loyal (I will continue to use this brand even if…)
  • +27pts uplift for Advocate (I will always recommend this brand)
  • +21pts uplift for Defend (I will defend this brand)

Trust is fragile - easily damaged and hard to gain back

A key event that focused consumer’s attention on the importance of personal data usage was Cambridge Analytica’s weaponisation of Facebook data to influence the US election. According to a Pew study[12]  74% of users either adjusted their privacy settings, took an extended break from the site or outright deleted the app from their phones (24%) following Facebook’s announcement of the data rights breach. “Over $119bn was wiped off Facebook's market cap. 3 million users in Europe abandoned the social network. The amount of money wiped off Facebook’s market value is equivalent to nearly the whole of McDonald’s.[13]” 

So what? We’re not doing anything wrong

Customers compare experiences based on their last best experience

Your customers are visiting international websites that have “new” consent controls and then visiting your Australian site - they are asking themselves ‘Why don’t I have access to the same controls over my data?’

Screenshot from
Screenshot from

Who should design your Brand experience?

As a Brand should you wait until the regulator tells you how you should treat your customers, or should you start earning trust by closing the gap between how Customers feel about their data and how your brand is using it?

Reactive vs Proactive

Establishing a strategic approach to Customer Data Management can mean Brands spend less time reacting, drawing precious resources away from other business priorities. A strategic approach can enhance your brand by delivering an effective & efficient roadmap to better customer experience. The eight Customer Data Rights[14] designed by the GDPR give brands a good framework of what customers are expecting.


Delivering compliance & competitive advantage through a strategic approach to Customer Data Management and loyalty

Our Customer Loyalty  Data framework looks to build trusted customer relationships through Empowering Customers & Empowering Business. Our approach looks firstly at how we can empower the customer through transparency and greater controls, and how do we represent the brand through this experience. 

The other half of the approach looks at how the business will deliver and manage the experience. We understand that it needs to be light and quick to deploy, it will need the capability to scale for the future, and finally, it should enable the business to manage all CDR requirements centrally.

Consumer’s eyes are slowly opening. They are more informed, and now have global reference points of what good looks like in terms of access, transparency and control. This is driving higher expectations of the brands they choose to do business with. In parallel, regulators are growing bolder in their defence of the consumer and their willingness to take on Business. The reality is that most companies will not take action until it is too late. Businesses that wait for the regulators to force their hand to adopt new Customer Data Policies and platforms will likely see an impact to their reputation and their bottom line.

We believe businesses that get out in front of the regulation, and provide their Customers control over their data and transparency on how their data is being used will be seen as a more trusted brand.

Our customer data framework can deliver compliance to the current recommendations from the ACCC as well as prepare your business for future compliance, enabled by a strong customer data platform.

We would love to talk to you about the ACCC report and the impact that the upcoming CDR regulations will have on your Loyalty program, your customers and your customers' data.

For more details, contact Jeremy Pitchford, Partner or Mervyn Tan, Director

Event details:
Date: Wednesday, 20 November 2019
Time: 7:45 a.m. – 9:00 a.m.
Venue: Cumulus Up, 45 Flinders Lane, Melbourne 3000.

ACCC Loyalty report breakfast briefing

The ACCC’s recent loyalty “scheme” report was a deliberate provocation from the government to address consumers’ rising concerns for the benefits obtained and the potential trade off with their personal data to obtain these benefits. The briefing will cover a brief recount of the report findings and the public responses by various organisations. We will also hear from Deloitte’s open data expert as well as a point of view from one of our strategic alliance partners on the best ways to manage the looming demands for customer data transparency and control.

We are coming to locations close to you, so kindly choose the one that works best. We hope you are able to join us.

Event Details:
Date: Tuesday, 12 November 2019
Time: 7:45 a.m. – 9:00 a.m.
Venue: Establishment - Room 1 252 George Street, Sydney, 2000.

Meet our authors