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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.