Customers are constantly connected, and the opportunities for data capture are only set to grow.
By Jill Brittlebank, VP, Strategy & Analytics at Zeta Global
In today’s smartphone society, brands know more about their customers than ever before. But many customers are concerned and bewildered about how their data is used.
Recent reports from The Chartered Institute of Marketing and The Information Commissioners Office have highlighted the public’s concerns around what data businesses collect, how they do it and what their data is used for.
Data drives the way we do business, and the benefits of deep-dive data analysis are abundant. It provides unprecedented consumer understanding, increases customer engagement, and drives sales.
However, effective data usage is threatened by lack of consumer trust. This separation between consumer sentiment and commercial ambition could prove a major stumbling block to marketing efforts – no matter how well intentioned.
The extent of consumers’ concerns is highlighted in The Chartered Institute of Marketing’s recent report, “Whose Data is it Anyway?”, which reveals that 57% of those surveyed do not trust companies to handle their data responsibly.
A second study released this month by The Information Commissioners Office provides a breakdown of these concerns. Their Annual Track survey gauges consumers’ awareness around data use. The survey reports that concerns around data stem from its potential to be stolen by criminals (75%), exploited by cold callers (72%) or sold to other companies for marketing purposes (60%).
Restoring consumer confidence
In the wake of highly publicised data breaches and poorly conceived marketing strategies, consumers have been left feeling insecure, exposed and uninformed. Brands must work to restore customers’ trust before it’s too late.
Demystifying the processes behind data usage is key. The CIM report found that only 16% of people read terms and conditions agreements, a stat hardly surprising when one considers their length and complexity. In many cases, Ts&Cs only fuel confusion.
Though it is easier said than done, simplifying and clarifying data policies from the outset will benefit brand perception. For example, providing a crib sheet of the main points of contention in your Ts&Cs could help give customers a basic understanding of what they are signing up for.
Creating preference centres will also give consumers greater control over what communications they receive. While businesses are legally permitted to send communications in relation to their service, provided customers have opted in, preference centres allow customers to select the specific information they receive and channels that they want to be contacted via, whether by SMS or push notifications. For brands, this can prove an invaluable way of understanding what types of messages customers tend to engage with, and allows for future communications to be streamlined and improved.
By granting the consumer more control over the types of information they receive, brands will communicate with a smaller but more engaged audience, with a greater confidence that these brands are using their data in their best interests.
Practice what you preach
The CIM report shows that 51% of those surveyed complained of being contacted by organisations that had misused their data. Therefore, it’s clear that businesses must pay more than lip service to their guarantees. If brands are to earn their consumers’ trust, they must be transparent about their intentions around data usage, for example, by setting-up preference centers. More importantly, the promise to not pass information over to third parties without prior agreement from the customer must be kept.
As with any data collection, it comes back to the value exchange. Therefore, it is important for brands to emphasize how tracking improves and adds value to the customer experience.
Centralising data through a Single Customer View will be key to using this information effectively, allowing for tailored and targeted messaging that meets a customers’ need to feel understood. Making sense of oceans of data is often a complex challenge for many businesses, but breaking down data into smaller, more manageable and effective pools can help to unlock the value in your data – and in turn restore consumer confidence. An example would be to create “data marts” that centralise specific pockets of data proven to be effective in managing interactions for a particular sub-segment of customers, or at a particular lifecycle point.
By utilising data smartly and sensitively, brands can instil customers with the confidence to share more, to better their experience. Once brands can demonstrate that the benefits outweigh the risks, customers will become more informed and, in turn, forthcoming.