We share our data for personalized experiences - but are brands delivering?

Profile picture for user barb.mosher By Barb Mosher Zinck August 1, 2019
Summary:
Are consumers willing to trade data privacy for personalization? And is personalization living up to its billing? Fresh data raises questions on both fronts.

man-asking-question

Do consumers have to choose between ensuring their privacy and the security of their personal information, and getting a personalized experienced? Do consumers even want a personalized experience? And if they do want a personalized experience - is there more to consider than privacy?

The new data economy

It's been over a year since GDPR came into law, and there are now even more data privacy laws in place or progress that will affect how brands create digital experiences. After GDPR, came the California Consumer Privacy Act (CCPA) which comes into effect January 1, 2020. Many other states are looking at enacting their own data privacy laws, and that means brands are going to have to figure out the best way to comply with them all if they are going to deliver on the promise of personalized, relevant experiences.

In Promise and Permission - The Role of Trust in the New Data Economy, Tim Walters from the Content Advisory states that:

In the emerging new data economy, marketers and other customer experience teams will be on the front lines of a competitive battle for the rich personal data required to fuel and sustain the relevant experiences consumers demand. As consumers assert more control over their data, they will tend to share it with companies that are both reliable data stewards and attractive partners in a mutual exchange of value. In short, the perceived trustworthiness of a company will be the decisive factor that determines whether consumers provide access to personal data.

The effect of data privacy on personalization

Data privacy is imperative if a brand wants to keep its customers. But the need for privacy presents challenges to creating personalized experiences.

Acquia, a digital experience platform vendor, surveyed 1,000 US-based consumers on data privacy and found a few interesting things :

  1. 65% don't know which brands are using their data
  2. 55% don't know how brands are using their data
  3. 65% would stop using a brand that was dishonest about how it was using their data

Acquia writes:

Brands have a responsibility to educate consumers about data usage, proving that they can trust the Internet again," said Tom Wentworth, SVP, product marketing, Acquia. "This new research from Acquia indicates the beginning of a new paradigm where businesses need to find personalized ways to engage consumers without going too far. Allowing consumers to opt-in or out of data sharing will become more common over time as brands recognize that giving consumers back control of their data is not only the right thing to do, but it will also benefit their business in the end.

Research by Walters of the Content Advisory found similar data on privacy:

content advisory - personalization

From Promise and Permission - The Role of Trust in the New Data Economy

It's become very much about trust. And giving consumers the ability to dictate what information they want to share and when. Acquia recommends a kind of phased approach to personalization that gains the consumer's trust over time.

  • Crawl: Establish transparency and trust by introducing basic personalization like geolocation, device type or visit frequency
  • Walk: With trust established, the brand can take the next step and personalize further by segmenting consumers based on browsing behavior and pages viewed, or recommending next steps after a certain action is taken.
  • Run: This is where you take advantage of technology like marketing automation and CRM to deliver even higher levels of personalization.

Walters says that "In order to access personal data and build desirable experiences, marketers need to ‘move trust upstream' - i.e., devise ways to motivate consumers to enter a trust-based relationship at or near the beginning of the engagement lifecycle." He's saying that it is not only about the security of personal data, but the trading of that data for something of value to the consumer:

As consumers assert control and ignite a competition for their personal data, they will consider not only whether firms will use it properly and securely. The additional factor will be what value they receive in exchange for parting with their data. These value-fordata propositions will used by consumers to differentiate and evaluate the numerous requests for personal information.

Is personalization really a priority?

There are two perspectives on this which point to the challenges marketers deal with. Recent research by eMarketer notes that consumers may not be looking for a personalized experience all the time. In fact, for some, personalization doesn't necessarily equate to a better experience. As per Nicole Perrin, principal analyst at eMarketer:

Marketers, especially digital marketers, love data and the promise of optimization it holds. And many report a lift in engagement, conversions or other behaviors they're trying to drive, based on tailoring relevant messages. But while a 1-point lift for a marketer may be a result worth celebrating, it doesn't necessarily mean consumers are perceiving those messages as personalized and highly relevant.

It appears that where you apply personalization is more important than simply personalizing everything. In The Art of Personalization- Keeping it Relevant, Timely and Contextual, research from Periscope By McKinsey shows the types of personalized experiences preferred by consumers, with the top two types being showing products related to interests (50%) and showing similar products recommendations based on purchase or search history (43%).

mckinsey on personalization

Perrin also noted that "As they've [consumers] become more aware of the personal data collection that underpins marketing personalization and targeted advertising, they've also started indicating they're not sure it's worth handing over their personal information in exchange for relevance."

On the other hand, an Accenture Pulse Check 2018 study found that personalization is a priority with 83% of consumers willing to share their data to get it. However, there is still a limit to what consumers think is appropriate. Of those surveyed, 27% reported an experience that was too personal, some almost "creepy" because the brand seemed to have information about them they didn't knowingly share.

What types of personalization did they think was creepy?

  • Getting a text message when walking by a store
  • Getting a mobile notification when walking by a store
  • Ads on social sites for items the consumer looked at on a brand website

They did, however, like getting an apology email after a poor in-store or online experience, or seeing an apology posted on a brand's web site.

My take

Consumers expect great experiences, but many are getting weary of giving away personal information and getting little to nothing in return. The strange thing is that many brands think they are doing a good job on personalization, yet according to a Nielsen report, consumers are becoming more disloyal to brands than ever before.

There is more at play to building loyalty than creating a personalized experience, but is it possible that while marketers think they are doing a good job creating these types of experiences, they may be focused on the wrong things? Marketers need to figure out what their customers want in terms of a personalized experience, and focus on delivering that - instead of applying blanket personalization techniques that don't deliver value to the customer.