It is a predicament: consumers' expectations towards businesses are higher than ever, as they demand an experience when buying a product, not just the feeling of a mere necessity. Hence, personalization is the keyword here, so that offers, product recommendations and discounts are available on the right channel at the right time and in line with the customer's current expectations and needs. All this is possible and only needs as prerequisites data-based 360-degree customer views, but that's exactly where the problems start. For fear of abuse, consumers are more reluctant in giving their data to businesses.
Bringing personalization and privacy in sync is unfortunately a challenging balancing act that (often) fails because companies can only offer a high degree of personalization if enough data is available. Anyway, the Apteco Trend Report 2019 shows that there is still room for improvement in personalization, stating that three out of ten marketers still use a minimal form of personalization, e.g. limited to the use of salutation and names only.
One of Accenture Strategy’s research, for instance, got granular on the question what today’s consumers really want and that often it is completely different from what you think. Accenture’s report Exceed Expectations with Extraordinary Experience points out that it all comes down to providing outstanding customer experience (CX) and that speed and convenience are the most important criteria here. Besides that, “purpose-led brands have the potential to create stronger and more resilient customer relationships and translates into more sales and greater customer lifetime value”, Accenture reveals. Purpose also bolsters confidence in a brand and provides an extra layer of protection from the almost inevitable “trust incident”—and ultimately protects the bottom line.
According to Accenture Strategy’s findings, a breach in trust adversely affects a company’s competitiveness: the direct impact on future revenue losses due to trust events conservatively totaled US$180 billion for the 7,000+ companies analyzed, which comes to approximately US$4 billion for a US$30 billion company. Defining and activating a meaningful purpose can potentially mitigate the damage a trust event might have on a customer relationship (and sales) by giving consumers another reason to believe in the companies with which they do business.
Further results of the study illustrate the "data paradox" that marketer face: 49% of consumers surveyed said they were frustrated when companies failed to provide personalized and fitting shopping experiences. At the same time, however, 54% of respondents said they had concerns about the use of intelligent services due to the protection of their personal information.
The General Data Protection Regulation (GDPR) plays of course its part here as well with its main objective of standardizing the processing of personal data for better protection. Still, there is mistrust of collecting and storing data. The reason for the fear of data abuse may date back to historical events that sparked a fundamental distrust in the use of personal information - or may come from more recent events, such as the data scandal around Facebook and Cambridge Analytica last year. However, more important than the actual trigger for loss of confidence is the question of how companies can restore consumer confidence.
To provide the experiences that customers expect and to demonstrate a 360-degree understanding of each customer, companies need a new breed of tech as well as a heap of data, the study State of the Connected Customer of the software provider Salesforce claims, naming three areas that companies should focus on to face the personalization/privacy dilemma:
1. Control: For 92% of customers, the ability to control which personal information is collected makes them more likely to trust a company with that information. Building trust, and balancing personalization with privacy, will be key for companies to meet customer expectations in the ‘Fourth Industrial Revolution’.
2. Transparency: Businesses should clearly identify the purpose for which data is needed and how it helps to create a personalized customer experience. 91% of the respondents consider a higher degree of transparency as crucial for more trust.
3. Clear commitment to privacy: Through easy-to-understand privacy policies and openness about privacy practices, companies can demonstrate that they care about protecting their customer data and treat that information as an asset.
Since our culture is shaped by constant connectivity and instant gratification, me” and “now” have become the magic words at every stage of the purchase process. “For 84% of customers, being treated like a person — and not a number — is very important to win their business. Another 70% say connected processes are very important to win their business (such as seamless handoffs between departments and channels, or contextualized engagement based on earlier interactions). This means that the marketing, ecommerce, sales, and service teams that have traditionally concerned themselves only with one part of the customer journey must now consider every customer touchpoint” Salesforce states in its report.
The key is to win (back) consumers' trust which can be achieved by considering the three core points mentioned above that pave the way to a personalized customer experience.
By Daniela La Marca