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Verizon Wireless is launching a nationwide loyalty program this week for its 100-million-plus subscribers in the US. The good news comes with a caveat: 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 come up with a comprehensive rewards program, and it’s expecting to benefit from it.
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. The company, however, confirmed that customer retention was very good in the second quarter.
The industry is headed for growth because almost every adult American now has a cellphone. Any new customers have to be lured over 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 which was launched in 2012 and 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 start taking advantage of 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 any personally identifiable information to advertisers. Verizon says the program differs little from Web advertising programs like Google Inc.’s, which uses vast amounts of personal data for ad-targeting.
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.
Verizon Wireless is the country’s largest wireless carrier and is a subsidiary of New York-based Verizon Communications Inc.