We’re always looking to get to know our customers better. Ideally with a 360-degree view that has aggregated all the masses of data available to us in order to better understand what they like, what they don’t and possibly what they might get up to in the future.
For the most part, having a good relationship with your customers results in a tailored experience and benefits both business and consumers. A survey from Accenture reports that 73% of consumers say they prefer to do business with retailers who use personal information to make their shopping experience more relevant, while Janrain reveal that 75% of consumers like it when brands personalise messaging and offers. It stands to reason that the more personalised your services become, the greater your revenue, right?
Many customers – in particular those between the ages of 18-24 – are willing to offer up their data, being accustomed to a web experience which has been designed to make their lives easier, more rewarding and personalised to their tastes. According to a report from the Columbia Business School, over 75% of 8,000 respondents are more willing to share various types of personal data with a brand they trust.
At the same time, consumers are developing a better understanding of the value of their personal information and it is becoming increasingly apparent that the ‘trade-off’ between them their giving you their data and the service they receive in return is not often balanced in their favour.
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The important word from the previous statistic is ‘trust’, and the concern is growing about how customer data is being handled is reaching a tipping point. Indeed, the same report states that 86% of customers want greater control over the data that companies hold about them.
One of the main issues is that consumers are feeling increasingly obliged to offer their data in exchange for services or rewards, rather than offering them willingly. A University of Pennsylvania paper reports that 65% of people agree with the statement “I’ve come to accept that I have little control over what marketers can learn about me online.”
There are many other issues at play. Along with a growing belief that they have been misled about what permissions they are giving to a brand, customers are also anxious about data security, with their fears fuelled by numerous high profile reports of breaches and thefts.
Clearly, organisations need to address such fears about control, consent and privacy and the soon-to-be-implemented General Data Protection Regulation (GDPR) plans to tackle many of these concerns within Europe.
Many finer points of the GDPR proposal are still being negotiated, but it is expected to include rigorous regulations for collecting data, raising the age of consent from 13 years to 16 years old, a need to remove information when requested, and new rules to inform EU authorities about data breaches within 72 hours of discovery.
Along with this, consultants Ctrl-Shift have put forward their suggestions for a framework they believe this new ‘data relationship’ should take.
For starters, it recommended a new regulatory approach be based on principles rather being more prescriptive – the poor reception of the 2009 ‘EU cookie directive’ is cited as an example of a prescriptive regulation designed to empower consumers being derided as a nuisance more than anything else.
It also suggests that trust can be built on a foundation of accountability, consistent integrity in the data chain (breaches often occur when personal data is distributed to other collectors) and transparency about policies and practices. Importantly, it recommends that there is a commitment to offering people more granular control over what personal data is collected, with clear limits about how it is used and shared. Finally, there is a need for value innovation to bring the balance of the trade-off back towards the consumer and deliver genuine market enthusiasm.
Implementing this recommended code of conduct is undoubtedly a challenge, with each point likely to raise a series of problems. Not least that presenting consumers with a more open approach to data collection asks for an investment of time and understanding (hands up who reads all the T&Cs before ticking the box?). Nevertheless, the relationship is already shifting and organisations will need to change their ways before customer leave you for someone that will treat them better.
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What strategies are organisations adopting to drive new, actionable customer insight and value from their data?