Balancing Trust And Personalization In The Digital Age
Personalization does not have to come at the cost of customer trust. New Microsoft research offers best practices from brands that have nailed it.
by Steve Sirich
Posted on 11-01-2019
The adoption of new technology across the buyer journey, combined with advancements in artificial intelligence and machine learning, has seen rapid growth over the past few years. This surge in innovation is helping brands deliver increasingly seamless, personalized interactions that extend beyond mere relevance to provide material value to consumers.
At the same time, while consumers have come to demand these kinds of experiences, they also expect brands to respect their privacy and safeguard their data. And rightly so.
But for many brands, achieving this balance in a way that builds trust and delivers personalization and value can be challenging. Privacy regulations such as Europe’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), combined with shifting public attitudes around data collection and usage, have left brands wondering how to manage it all.
Microsoft found some answers in the recently completed “Data-driven marketer’s blueprint for success,” a study of 200 marketers and agencies from companies of all sizes and industries. The aim of the study was to identify top-performing marketers who best understand the customer journey and are improving their marketing based on that understanding, and then examine their commonalities.
Approximately 20% of the marketers in our study qualified as “High Performers”: They have an excellent understanding of their customers’ decision journey and are seeing significant improvements in marketing performance—to the tune of up to a 45% increase in marketing ROI.
Not surprisingly, among those High Performers, privacy is a priority. Our research indicates that 55% of High Performers are very concerned about consumer backlash over how their companies handle first-party data, as compared with just 12% of Low Performers, who are still struggling to understand the buyer journey. Meanwhile, while High Performers have more customer data than their counterparts, they are also more likely to be transparent about usage and have safeguards in place to protect it.
The reality is this: Personalization does not have to come at the cost of customer trust. In this post, I’ll explore what marketers can learn from High Performers.
Your customers care about privacy—and so should you
If we’re going to build brand loyalty, reputation, and credibility, we must begin by understanding the foundational pieces of trust. Respect for privacy is at the core. While the High Performers in our study said they are more likely to use data than their counterparts, they’re also more likely to use it in a way that is respectful. For example, 50% said they have shifted away from using cookies and 48% have reduced their use of consumer tracking.
As marketers, we must be vigilant about finding ways to foster a more relevant and personalized experience while building consumer trust. When it comes to data, we must ask ourselves key questions, such as:
—Am I using data in a way that provides full transparency and disclosure to consumers as to how their data is being used?
—Am I using data that I can responsibly manage?
—Am I handling first-party data in a secure way?
Consumers must be assured that personalization does not come at a cost. Brand enagements must be relevant without feeling eerie. Consumers want to have control over what data they disclose and how it is being used (hopefully, to their benefit). They need to feel confident their privacy will not be put at risk.
Prioritize first-party data and collect it reliably
The reliable collection of first-party data is key to driving trust and transparency. Consumers want to understand directly from you how and why that data is being collected. Be forthcoming with the details and allow consumers to opt in to sharing their data. Avoid asking for more than what you need. Fifty-nine percent of High Performers said they ask consumers how their data can be used and also communicate the value of sharing their data. Giving consumers more control and visibility enables them to provide data that they’re comfortable with sharing and increases trust.
From a brand perspective, there’s a level of credibility that comes with first-party data because of how it’s collected and managed. First-party data obtained directly by your brand provides the most accurate details around existing and potential customers. The most essential sources of first-party data for High Performers include organic search data, site analytics, customer relationship management data, and call-center data.
Of course, first-party data is not the only data you should be using because it does not give you a complete picture of your customers and their journeys. High Performers said they supplement with reliable second- and third-party sources from third-party providers, market researchers, and location data companies.
Be transparent with how you use data
Transparency and disclosure are incredibly important. Being clear about how data will be used builds trust, demonstrates your brand’s integrity, and makes it more likely consumers will be willing to share their data for personalization. In addition to clarifying with customers how they use their data, 64% of High Performers said they offer incentives to consumers who do choose to share data.
The rise of digital assistants like Cortana and Alexa exemplifies this value exchange. Voice-enabled digital assistants are soaring in popularity. In a study we conducted with eConsultancy, 67% of consumers surveyed said they’d be willing to exchange personal data for the automated ordering of frequent purchases.
Setting guidelines that define how data may be used is critical. Establish a set of high-integrity, ethical principles, and then make sure your business operates within those guardrails. Fifty percent of High Performers said they have created new internal standards for data collection and use.
It’s really about putting people first. It’s about being smart and respectful of customer data and finding ways to deliver personalization without infringing on their privacy. Work with partners and solutions that protect data while accelerating personalization. Establish and enforce clear data privacy guidelines. Be definitive about how your brand may or may not use customer data. With thoughtful planning, the balance between privacy and personalization can be achieved. And in all likelihood, you’ll find that more customers will thank you with their business.
Topics: CMO by Adobe, Personalization, Insights & Inspiration, Partner Story, Experience Cloud, Digital Transformation, Digital Foundation, Analytics, Marketing, Information Technology
Products: Experience Cloud, Experience Manager, Analytics