by Kevin Cochrane

It’s a good time to be a consumer. New digital business models have flipped the customer-brand relationship on its head. No longer do consumers need to do their own background research on a product or company to find what they are looking for. Instead, brands come to us. There are more options and more channels to get what you want than ever before.

That said, there is always a downside. This seemingly limitless digital economy has brought with it feelings of overexposure. No one likes to feel as if they’re being watched, yet with technology continuing to mature, we have found ourselves entrenched in a marketing machine that has become far too intimate for anyone’s liking.

The power of digital is so great that brands have started to abuse it. And with this abuse of power has come the erosion of the trust that once existed between businesses and consumers.

Over the last decade, businesses have built marketing technology stacks to collect and organize data with the hope of more effectively targeting consumers. Driven by the promise of loyal customers and greater revenue, it didn’t take long for marketers to start using consumers’ personal data without their knowledge or consent. What’s more, the practice of buying data from third-party brokers become the norm, making customer and prospect data both stagnant and not earned. This ignited a dark process of monetizing consumers’ digital lives that has quite simply backfired for companies.

As a result of using this inaccurate data, brands began to bombard consumers with messages that were not actually relevant to their personal interests. Rather than connecting authentically, brands became alienated from the individuals they were trying to reach.

The research bears this out: Nearly half of consumers say they have left a business’s website and made a purchase elsewhere because the experience was poorly curated.¹ Further, 73% of consumers feel they haven’t been engaged in a personalized way.

It’s a tricky situation: Consumers want personalized offers that are relevant to their past behavior and future needs. To execute on this level of personalization, companies must collect large amounts of data. However, consumers want only some of their data used and only in a way that they are comfortable with.

So, what’s the right way to navigate these complexities?

When done right, personalized messages can drive real revenue. Research from McKinsey found that personalization can deliver five to eight times the ROI on marketing spend and can lift sales by 10% or more.² It’s clearly worth it for brands to invest in reconnecting with their customers.

To initiate a more trustworthy relationship, organizations must start by eliminating internal processes of acquiring third-party data. They must use only data that they have earned through explicit customer consent. Until now, the average consumer was likely unaware that when they “turn on cookies” it means they are agreeing to share their information with dozens—and in some cases hundreds—of affiliated partners. Those days are over.

Consumers should (and in the future will) have full visibility into how extensively their personal data is being monetized. This is an imperative, as research shows that 79% of consumers will leave a brand if their personal data is used without their knowledge.³ With the European Union’s General Data Protection Regulation (GDPR) officially implemented across businesses, brands have a fresh opportunity to reevaluate data practices, communicate them clearly to customers, stick to their word, and come out stronger on the other side.

GDPR and stricter privacy laws also mean that marketers will need to incentivize consumers to share their data. Consider the following best practices:

• Explain the benefits that customers will receive. Specific benefits might include more personalized offers, exclusive rewards, or access to a decision-making tool that makes life easier. Netflix is a great example: Without granting access to their personal data, customers would not benefit from Netflix’s robust recommendation engine, which is a powerful way for consumers to discover new content that is highly relevant to their interests.
• Give customers full control over the types of data they share. Of course, certain types of data are more sensitive than others. Perhaps a customer is comfortable sharing their name and date of birth, but would rather not share their home address or mobile phone number. Putting the customer in control and providing flexibility in the types of data they are able to share makes it far more likely that they will offer up at least some personal information.
• Provide tools that easily allow customers to edit their privacy settings. To do this, organizations should consider implementing a digital privacy center where customers can easily understand and manage their data choices. Part of this should be the ability to configure exactly who within an organization has access to data. Additionally, it should include a “download my data” button that quickly and easily allows customers to know the exact information that a company has access to at any given time.

The final step is maintaining consistency. It’s one thing for a customer to initially agree to data sharing but another for them to feel incentivized to continue to share it. Marketers can keep the relationship strong by adhering to privacy policies and providing consistent, valuable communication. Emerging technologies like artificial intelligence can help with this by building a single view of each customer that outlines all past behavior and communication with the brand. The way I see it, consumers will increasingly limit their brand loyalty to organizations that aid them with daily lifestyle goals. They will invest time and money in fewer but deeper relationships.

The digital era has fundamentally shifted assumptions for how individuals will do business and engage with companies. And once trust has been lost, it’s nearly impossible for brands to rebuild sustainable, honest relationships with their customers.

As marketers, we must understand that real people buy from real people. This is why authenticity in marketing messages is so important, especially in the digital age. Transparency, consent, and trust are key to forming a long-lasting brand relationship.

As the industry becomes increasingly data driven, marketers must avoid becoming too scientific at guiding prescriptive outcomes. Rather, we should use data to relate at scale to individuals and to help guide them to self-discovered personal goals. Let’s work to improve lives, not manipulate them.

TAKEAWAYS

Targeting customers has never been trickier. They want personalized offers that are relevant to their past behavior and future needs, but to do this, companies must collect large amounts of their data. Yet customers want only some of their data to be gathered and only in a way that they’re comfortable with. How can marketers navigate these complexities and maintain a strong relationship with their customers?

• Companies should start by eliminating internal processes of acquiring third-party data and begin using only the data that they have earned through explicit customer consent.
• Customers should be given full visibility into how extensively their personal data is being monetized.
• Marketers should inspire customers to share their data by explaining the benefits that they will receive, giving customers full control over the types of data they share, and providing tools that easily allow customers to edit their privacy settings.