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Loyalty and Privacy

  • Fidelity and profiling users: issues that have always been under observation by General Data Protection Regulations GDPR.

Loyalty and Privacy

The issues of customer satisfaction and loyalty have been and still are of great interest to companies and scholars. The need to respond to the needs and desires of the consumer, and therefore the sovereignty of the same as a necessary condition for the success of the company, already appeared in the 1950s, leading to a "Copernican revolution" in the field of marketing management.

In this context are inserted the policies of micromarketing for loyalty activities or the broader concept of relationship marketing. The micromarketing is a versatile toolbox that provides logic, techniques and tools to develop a lasting interaction with the customer, but the use of the information that comes from it will depend on the strategic orientation, which can be towards loyalty and /or simple business traffic.

In general, fidelity cards, before the advent of the digital revolution, were the main tools used by companies to manage and obtain information, user profiles and customer loyalty. Today they represent a piece of the different touchpoints used by the modern consumer in a perspective of Omnichannel.

From the point of view of privacy, the loyalty cards have always been put under observation by the guarantor. Already with the old Legislative Decree 196/03 the holder was required to minimize the use of personal information and use only relevant information and not excessive. In particular, as far as loyalty is concerned, it was established that only the data necessary to attribute the advantages connected with the use of the card could be processed. It was not licit to condition the adhesion to a loyalty program to the consent also for the use of data for profiling and marketing purposes. It was also included the obligation to notify the Guarantor of treatments carried out with the help of electronic tools aimed at defining consumer profiles or to analyze habits and choices of products purchased.

How is profiling defined today from the legal point of view?

According to the new GDPR, profiling consists of the following three main elements:

  • automated processing
  • performed on personal data
  • with the purpose of assessing a natural person's personal aspects.

In general, profiling means any form of automated processing of personal data, for the purpose of assessing certain aspects of a natural person, for the purpose of analysing that person's occupational performance, economic situation, health, personal preferences, interests, reliability, behaviour, location or travel.

Assuming that on average today all loyalty activities are carried out through automated data processing, it is necessary, first of all, that the information provided to users is as clear and comprehensive as possible, in order to provide the interested party with more information on how to create and use data in profiling processes.

In this context, all the inspection activities, carried out by the Office of the Guarantor, also through the Financial Guard, during 2019, to analyze and verify, in particular, the:

  • processing of personal data by companies for marketing purposes;
  • processing of personal data carried out by companies with particular reference to the profiling activities of those concerned who adhere to loyalty cards.

E-Business Consulting is a marketing agency active in projects of customer loyalty, omnichannel and consulting on profiling and segmentation of user databases, with expertise on all obligations under the privacy issues. Call now and ask for a free quote.