Originally Published in Customer Think
Written by Mark Smith
Customers today expect personalization. In fact, it is a major driver of loyalty. According to Accenture, over 90% of consumers are more likely to shop with brands that recognize, remember, and provide relevant and personalized experiences.
Personalization only happens, however, when brands know a lot about their customers. This means that contextually appropriate and relevant customer experiences are fueled by massive amounts of customer data and, for better or worse, we’re currently in an age defined by acute data paranoia.
The paranoid ones, though, aren’t the consumers themselves. For all the headlines about security breaches and privacy concerns, consumers remain surprisingly amenable to handing out their data, provided they get something in return. The same Accenture report found that a full 83% of consumers were willing to share their data to enable personalized experiences and 73% of consumers said they had never received communications from brands that felt too invasive or personalized. That being said, it does make customers uneasy when they suspect that brands are using, or even selling, information they didn’t knowingly or directly share.
The data paranoia we see is seemingly now being felt more on the other side of the relationship — by the brands themselves. And that paranoia is justified. The European General Data Protection Regulation, which went into effect nearly two years ago, and the California Consumer Privacy Act, which rolled out the beginning of this year, have had a chilling effect on brands’ approaches to customer data. Concerns over new regulations or the threats of new regulation, in fact, were found to be the biggest obstacles to data-driven marketing activities.
So if the bar for consumer willingness to share data is actually lower than expected, how can you get over your data paranoia, while at the same time ensuring you’re fully compliant with existing and still-to-come regulations around data privacy? Here are a few key steps:
Focus on first-party data. If you are currently subject to GDPR, you’ve probably already changed the ways you use of third-party data. GDPR and CCPA have imposed numerous restrictions on allowed usage of third-party data and marketers have had to adapt. To build out the kind of data needed for 360-degree customer views, focus on improving your first-party data acquisition programs. Make what you’re offering worthy of a customer’s opt-in and make it clear that you’re collecting it only for your own use, not to sell to other parties. Focusing on building better first-party data programs gives brands more control over their data, and, when done responsibly, shields them from any potential consequences of non-compliance.
Adopt compliance best practices, such as double opt-in. Double opt-in serves a few purposes. First, it ensures you don’t have fake email addresses making their way into your lists or any typos or incorrect information. It also weeds out those who aren’t actually interested in what you have to offer — if a customer or prospect has signed up and confirmed their interest, you can treat them as qualified. On the regulatory front, it gives you a paper trail for compliance, allowing you to demonstrate proof of consent for every one of your contacts. Finally, it allows a customer’s first experience with your brand to be more interesting and dynamic. Your confirmation email, for example, can serve as a welcome email, allowing you to introduce your brand and build a relationship with your new contact from the very start.
Bake transparency into your CX strategy — don’t leave it as an afterthought. The touchpoints in your customer journey related to data privacy and opt-ins are some of your most sensitive because they are all about building trust. Be transparent. When you ask a prospect for their information, let them know what you plan to do with it — 70% of consumers report that they are comfortable sharing their data if a brand is transparent about how they will use it. Better yet, give your customers control over their data. Three-quarters of consumers say they are fine with sharing data if they can control how it’s used.
When you ask customers to share their data, explain to them the benefits of doing so. Data enables rich personalization, real-time decisioning around the next-best action at every stage of the customer journey, and better customer experience from end to end. Design experiences that are worthy of a customer’s opt-in, and let your customers get a peek behind the curtain to give them the nudge they need to sign up.
The paranoia around customer data has its basis in reality — no one wants to get hit with huge fines companies like British Airways ($230 million), Marriott International ($125 million), or Google ($57 million). But with smart practices, transparency, and ceding control back to the customer, brands can overcome data paranoia, both their own and that of the customer. while continuing to reap the rewards of personalization and next-gen customer experience.
Read the original in CustomerThink: http://customerthink.com/customer-journey-management-in-an-era-of-data-paranoia/