Commentary

Facial recognition and customer loyalty: The new reality

Facial verification using facial recognition can play a role for customer loyalty programs. By identifying and verifying customers, it can enhance the customer experience by streamlining enrollment, offering personalized rewards, promotions and more.

Image: Adobe Stock.

May 29, 2023 | by Randy Hernandez, Brierley

Facial recognition technology and facial verification have quickly become norms in the self-serve equipment world, particularly with customer loyalty programs. Today, kiosk operators and retail marketers can use facial recognition to personalize and transform the loyalty program's customer experience like never before.

This technology can maximize customer engagement, increase sales and improve your loyalty program's return on investment.

But like all emerging tech, facial recognition has faced some challenges. Additionally, some consumers have concerns about facial recognition technology, particularly regarding privacy and data security.

Facial recognition versus facial verification

The terms "facial recognition" and "facial verification" have different but overlapping definitions or meanings. What's the difference?

Facial recognition technology can identify individuals by analyzing their facial features. In marketing and loyalty programs, this technology can be used to identify customers and offer them personalized promotions and recommendations based on their past behavior, purchase history and demographic information.

Facial verification is a common feature that relies on facial recognition technology. It's used to confirm someone's identity by comparing their face to a previously stored image or video. Facial verification is commonly used for authentication purposes, such as simplifying a kiosk loyalty or rewards member login.

Facial verification using facial recognition technology can play a key role for kiosk loyalty programs. By identifying and verifying customers, it can enhance the customer experience by streamlining the enrollment process, offering personalized rewards, promotions and more.

Benefits of facial recognition, facial verification

Facial recognition can radically streamline and remove friction from many commonplace customer interactions, especially kiosk and retail loyalty programs.

For example, imagine enrolling and logging into a loyalty program using your face instead of providing your smartphone number, email address or QR code. Retailers can personalize offers based on your prior purchases and preferences, and you can quickly and easily redeem and pay for it with a quick facial scan at the register.

Corporations in the financial services industry already see the opportunities facial recognition technology can provide, especially in improving the customer experience of transactions by making them virtually effortless.

For example, Apple's FaceID does this by allowing you to use your face to lock/unlock your iPad or iPhone and make purchases.

Regulations to consider

However, businesses must use facial recognition technology in a way that complies with consumers' privacy laws and regulations. Laws and regulations in many countries and states require businesses to do everything possible to safeguard their customers' data.

Brands should always be transparent about how they use the technology and store customer data. If you are worried your customers may be apprehensive, you could include a "new feature" tutorial in your loyalty program that briefly explains how facial recognition works, how your company uses customer data it collects and how opting in for facial recognition benefits the customer.

Because facial recognition technology provides numerous opportunities for marketers to increase customer loyalty and drive sales, it seems like an innovation worthy of every business's attention. However, companies may want to test-pilot facial recognition in their loyalty program to gauge its impact before fully committing.

Facial recognition isn't perfect

Facial recognition can help customers save time and remove friction points while allowing marketers to increase personalization and drive efficiency. That said, history shows that any new or emerging technology cannot usually be taken at "face value" (apologies!).

Facial recognition technology, even for facial verification, does raise valid privacy concerns for many people. After all, you only have one face.

Importantly, self-service equipment operators should ensure their privacy and data security policies are easy to understand. Companies should also consider additional data privacy, security and infrastructure requirements, in addition to those of the partner providing the facial recognition technology for your loyalty program.

Facial recognition and face verification are still evolving technologies and still imperfect. For example, many facial recognition algorithms used over the past few years were shown to be less adept at recognizing darker skin tones. A major imperfection like unintentional racial discrimination could turn consumers against the brand, the technology, or both.

Over the past few years, the accuracy of facial recognition technology has significantly improved. While still not perfect, modern facial recognition algorithms, enhanced artificial intelligence and vast new datasets have helped improve these flaws in facial recognition technology's early iterations.

'Facing' the new reality

Facial recognition isn't going away — it's here to stay. And as we "face" (sorry — last one!) this new reality, every self-service equipment operator or retail business should consider the potential benefits of integrating facial recognition into their customer loyalty program. These benefits include an enhanced customer experience, improved personalization, reduced consumer friction and increased customer engagement.

Facial recognition technology as part of a customer loyalty program can be a huge advantage for a self-service equipment operator to enhance the customer and increase the loyalty program's profitability.

Randy Hernandez is the vice president of strategy at Brierley, a provider of loyalty solutions with offices in Frisco, Texas and London.

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