San Francisco Chronicle

Verizon’s rewards program has a twist

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Verizon Wireless is launching a nationwide loyalty program this week for its 100-million-plus subscriber­s. There’s a twist, though: To earn points for every dollar spent, subscriber­s must consent to have their movements tracked so the company can help target ads that match their interests.

Verizon is the first wireless carrier to roll out a comprehens­ive rewards program, and it’s expecting big benefits. The program has already been offered for a few months in some states. Jeffrey Nelson, vice president of wireless marketing, suggested that even that limited program helped with customer retention, though he didn’t provide details. On July 10, Verizon said customer retention was “very good” in the second quarter.

Because nearly every adult American now has a cell phone, the industry is past its days of heady growth. New customers have to be lured from other carriers, and defending the customers you have against such overtures is paramount.

Nelson said Smart Rewards is designed as a loyalty program, but the company is also using that to encourage enrollment in Verizon Selects. That program, launched in 2012, uses subscriber surfing and location data to better target ads they see on the phone.

Enrollment in Selects is mandatory for subscriber­s who want to use Smart Rewards, but they can then leave Selects and keep using Smart Rewards. Those who stay with Selects get additional Smart Rewards points every month.

Verizon Wireless says the Selects program doesn’t give personally identifiab­le informatio­n to advertiser­s. Verizon says the program differs little from Web advertisin­g programs like Google’s, which uses vast amounts of personal data for ad targeting. But the addition of location data gleaned from cell towers makes Selects a test of where subscriber­s will set their privacy limits.

Customers will also earn points for every dollar spent on wireless service, as well as for upgrading to smartphone­s and recycling old phones, among other activities. The points can be used for discounts on hotel rooms, car rentals and products from a Verizon catalog, or they can be used to bid on phones and other devices in auctions on Verizon’s site.

The program is run by Destinatio­n Rewards, which lists Citibank, Coca-Cola and Time Warner Cable as clients.

 ?? Charles Krupa / Associated Press ?? Verizon is the first wireless carrier that is rolling out a comprehens­ive rewards program.
Charles Krupa / Associated Press Verizon is the first wireless carrier that is rolling out a comprehens­ive rewards program.

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