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Verizon Smart Rewards Is a Sign of Things to Come

  |  July 29, 2014   |  Comments

Programs like Verizon Smart Rewards demonstrate that consumers are warming up to the idea of sharing data about themselves, as long as there is a benefit such as coupons or offers.

A new rewards program from Verizon offers discounts in exchange for tracking and, some say, reflects increased consumer willingness to share data about themselves as long as they benefit from it in some capacity.

The program, Verizon Smart Rewards, gives customers points for activities like signing in to the online account management tool, paying their bills, using Verizon's Trade In program, and choosing paperless billing.

In turn, Verizon says participating customers can receive discounts on brand-name merchandise from more than 200 "well-known" brands, as well as at hotels and on Verizon products. They can also receive offers on local shopping and dining establishments redeemable from their wireless devices and "opportunities to win NFL game tickets," the brand says. And points can also be used for daily deals, auctions, and sweepstakes.

According to a Verizon rep, customers can buy sweepstakes tickets for one or two points apiece, while local offers start at 200 points.

But Verizon has not created this program purely out of the goodness of its heart.

In order to sign up, the wireless carrier says customers "may be required" to enroll in Verizon Selects, a marketing program that uses location, Web browsing, and app usage data, as well as other information including demographic and interest data, to glean insights about customers and ultimately better target ads.

Verizon is not serving ads directly, but the program helps the brand's ad partners serve more relevant ads, the rep says. And while she notes the program is in its early stages, she says early partners include Kraft, 1-800-Flowers, and the Phoenix Suns.

The Verizon news comes on the heels of a report from omni-channel engagement and insights platform Punchtab, which looked at consumer sentiment related to retailer mobile tracking.

Punchtab found privacy was the top consumer concern related to mobile tracking, with more than 50 percent of respondents citing it as the reason they would not want a retailer to know their location.

However, despite this concern, 27 percent said they would still likely allow mobile tracking if they were given the right incentives.

The most popular reason for sharing location? Coupons and offers.

Similarly, Lars Albright, chief executive (CEO) of mobile loyalty company SessionM, cites a digital trend report from Microsoft that found 45 percent of customers are willing to sell digital data to the right source for the right price and that 59 percent of consumers will buy from a company if that company rewards them for sharing their digital information.

"The backdrop is that people are getting smarter. They know digital data [like location and browsing history] is valuable and they want something in exchange for that value," Albright says. "They're really tapping into that theme of giving value for data and I think that is a big trend that's going to continue."

He says these so-called value exchanges are gaining more and more traction, using the additional examples of location analytics firm Placed, which he says rewards users for having tracking enabled for location, and his own firm, which gives rewards for in-app engagement and for user data like preferences and locations.

According to Albright, Verizon's move highlights the importance of this first-party data, which comes directly from users and is "more accurate and actionable and leads to better results as opposed to different third-party data sources and [brands] making inferences [from there]."

In addition, Albright says the news demonstrates that digital marketers shouldn't be scared of value-exchange-based programs.

"Massive corporations are using the concept of a value exchange to motivate consumer behavior to a meaningful outcome," Albright says. "Verizon is just another step in showing this is an ongoing trend we'll continue to see.

Kevin Lee, CEO of digital marketing agency Didit, says there's a fight brewing over who will get to use all this mobile data.

"So is it going to be third-party apps - the Groupons, Living Socials, and shopping apps like Yelp - or the carriers themselves?" Lee asks. "Anyone can be in the business of facilitating local deals if you share geolocation with that party, so I think this is going to be really interesting. To my knowledge, this is the first time a carrier has gone into this business directly."

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Lisa Lacy

In addition to ClickZ and Search Engine Watch, Lisa's work has appeared in The Huffington Post, The Luxury Spot, LearnVest, MarthaStewart.com, GoodHousekeeping.com, amNewYork, and The Wall Street Journal. She's a graduate of Columbia's School of Journalism.

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