Personal Data and the Customer Experience

Just a few short years ago, it seemed impos­si­ble to envi­sion a world where near­ly every­one has a smart phone. Yet today it is esti­mat­ed that there are over 2.6 bil­lion smart phone sub­scrip­tions glob­al­ly and by 2020, there will be over 6 bil­lion with anoth­er 3 bil­lion sub­scrip­tions for devices like tablets and elec­tron­ics in our cars, office, and homes. When you include those that don’t need a sub­scrip­tion, there will be over 26 bil­lion con­nect­ed devices in just 5 years. This rep­re­sents an unprece­dent­ed oppor­tu­ni­ty to serve your cus­tomers with per­son­alised mar­ket­ing strategies.

As with most of the world, the Nordic cus­tomer is embrac­ing e‑commerce more and more. The com­mu­ni­ca­tions and logis­tics com­pa­ny Post­nord said in a report last year that Nordic e‑commerce is con­tin­u­ing to expand and con­sumers are becom­ing increas­ing­ly mature and open to it. On line pur­chas­es were up 23 per­cent last year, mak­ing Nordic e‑commerce a EUR 15.6 bil­lion indus­try. In the first quar­ter of 2015, Nordic region shop­pers spent SEK 365 bil­lion, a 7 per­cent increase over that same time last year.

Mobile devices are now the lead­ing way peo­ple shop and most of the buy­ing cycle is done by the cus­tomers them­selves in apps on their devices before they ever enter a store and some­times while they are stand­ing in the aisle in front of a prod­uct they are con­sid­er­ing. The need for data about your cus­tomer and their expec­ta­tions is evi­dent, yet over 50 per­cent of busi­ness­es don’t use ana­lyt­ics and they are miss­ing oppor­tu­ni­ties to mon­e­tise and engage cus­tomers. And I have heard from many peo­ple over the years that they want ana­lyt­ics in their com­pa­ny, but are cau­tious because of pri­va­cy pro­tec­tion laws and cus­tomer perceptions.

Today we are have access to lit­er­al­ly tens of thou­sands of met­rics through ana­lyt­ics ser­vices and it isn’t unusu­al for an organ­i­sa­tion or a busi­ness to not know where to start in decid­ing which fac­tors are cru­cial to their suc­cess and which don’t mat­ter as much. Using per­son­al data can be a great ben­e­fit to your busi­ness, but care must be tak­en in its use to uphold the spir­it of data pro­tec­tion laws and to keep with­in the com­fort lev­el of your customer.

Be sure to com­ply with per­son­al data pro­tec­tion direc­tives that have been estab­lished by the Euro­pean Con­ven­tion on Human Rights and those of the Nordic coun­tries. In sum­ma­ry, the rules want you to be sure to 1) have the subject’s con­sent, 2) use the data only for the sit­u­a­tion for which it was col­lect­ed, 3) inform the sub­ject when data is col­lect­ed and how it will be used, and 4) be pro­por­tion­al to the pur­pose for which it was col­lect­ed. Being “pro­por­tion­al” sim­ply means that if you are col­lect­ing infor­ma­tion on an appli­ca­tion for an apart­ment hunter, you can ask for income, employ­ment sta­tus and oth­er relat­ed items, but you can’t ask for reli­gious affil­i­a­tion, med­ical infor­ma­tion, or oth­er items that aren’t rel­e­vant to the pur­pose. The more trans­par­ent you are with your cus­tomers and the more you engage them in an hon­est dia­logue about how you use data, the more accep­tance you will have.

An amaz­ing array of data is avail­able, but it has to be used care­ful­ly and thought­ful­ly. Once you are sure that you are com­ply­ing with legal guide­lines, you want to make sure you are doing things that don’t stretch the com­fort lev­el of your cus­tomers too far. Con­sumers are still adjust­ing to know­ing that a con­sid­er­able amount of data is col­lect­ed about their shop­ping behav­iour and although the con­cept of pri­va­cy is being rede­fined every day and there is no absolute mea­sure, peo­ple still go by feel­ings and using too much infor­ma­tion can lead to a feel­ing that can only be described as “creepy.”

Not that many years ago, most of us were shocked when an email start­ed out know­ing our first name. Times have changed and there is a lot more accep­tance, but a few things are still the same. Your per­son­al­i­sa­tion strat­e­gy should build grad­u­al­ly. Here are a few guide­lines and principles.

  1. A cus­tomer gen­er­al­ly wants to remain anony­mous for a while when vis­it­ing your web­site, (unless they choose to reg­is­ter and sign in). Don’t start ask­ing for infor­ma­tion or using data that is col­lect­ed too soon.
  2. Before you use data, ask your­self if your cus­tomers knew how you were using it, would they find it creepy or accept­able? You may know of the sto­ry of how a sta­tis­ti­cian work­ing for Tar­get in 2002 fig­ured out how to deter­mine if a female cus­tomer was preg­nant by analysing her pur­chas­es. They sent coupons for dia­pers, cribs, and oth­er sup­plies. Short­ly after the start of the cam­paign, an irate father came into his local Tar­get clutch­ing coupons for dia­pers and cribs that had been sent to his teenage daugh­ter. “Are you try­ing to encour­age her to get preg­nant,” he exclaimed. The man­ag­er apol­o­gised and then called a few days lat­er to apol­o­gise again. The father said he dis­cov­ered that his daugh­ter WAS preg­nant and the fam­i­ly was unaware. Tar­get adjust­ed its cam­paign! Their mod­i­fied cam­paign of appeal­ing to what peo­ple need­ed before they even thought of it for them­selves rose their rev­enue that year from $44 bil­lion to $67 billion.
  3. In your emails, espe­cial­ly with busi­ness-to-busi­ness cus­tomers, use the com­pa­ny name of the recip­i­ent in addi­tion to their name. Some stud­ies have shown that click-through rates increased from about 7.5 per­cent to 15 percent.
  4. Start out by per­son­al­is­ing emails with actions the cus­tomer took at your web­site before you attempt­ed any loca­tion-based mar­ket­ing. Peo­ple assume you know their move­ments while they are at your site, but they are less famil­iar with the idea that you know their phys­i­cal loca­tion while they are on line.
  5. Use Pro­gram­mat­ic Site Re tar­get­ing (PSR) with care. With PSR, a brand can use the tremen­dous amount of data avail­able on cus­tomers’ behav­iour while on the web to fol­low them and try to get them to pur­chase prod­ucts they have been con­sid­er­ing. For exam­ple, if a poten­tial cus­tomer vis­its your web­site look­ing at a par­tic­u­lar ring in the jew­el­ry depart­ment, chances are that they are shop­ping for that kind of ring. You might then bid high with a PSR ad bro­ker to place an ad for that prod­uct on the next web­sites that cus­tomer vis­its. If you dis­cov­er that the cus­tomer has shopped around on oth­er sites for that kind of ring, you might even bid high­er. Check out this info­graph­ic about the real-time bid­ding process.
  6. When you use pro­gram­mat­ic bid­ding for your PSR cam­paign, in some cas­es you won’t posi­tion prod­ucts to a cus­tomer who has already pur­chased them (such as sub­scrip­tions). This applies to your web­site as well as the sub­se­quent sites your cus­tomer vis­its. In oth­er cas­es, such as some retail prod­ucts, sug­gest­ing they buy a prod­uct they bought before will make sense. Put some thought into your PSR cam­paign and don’t spend your ad-mon­ey try­ing to sell the same thing twice if it doesn’t make sense.

PSR is gain­ing in pop­u­lar­i­ty and accep­tance in the Nordic region. Esti­mates sug­gest that PSR spend­ing account­ed for 25% of the total amount spent on dig­i­tal dis­play ads in Nor­way last year.

Today, stud­ies show that con­sumers are very much in favour of per­son­al­i­sa­tion and they are com­ing to expect right time/right place offers, but their trust and con­fi­dence can be read­i­ly lost by clum­sy attempts or inap­pro­pri­ate use of per­son­al infor­ma­tion. While near­ly 100 per­cent of those polled in the Nordics were pos­i­tive about per­son­al­i­sa­tion oppor­tu­ni­ties, there is a near­ly unan­i­mous belief that retail­ers don’t do a good job at pro­tect­ing privacy.

For all of us who serve con­sumers, the task is clear: con­found their con­cerns and cre­ate a sys­tem with the best prac­tis­es that pro­tects your cus­tomers and pro­vides them the best opportunities.