Consumers Will Share Personal Data, but Only for Valuable Customer Experiences

There are now new ways for brands to start winning customer loyalty. It is true that media fragmentation, digital technology, and an endless array of product choices, have made it more challenging to attract and retain customers. But brands must understand that many of the challenges arise from relying on outdated marketing models. The customers have changed, their behaviors are evolving, and it is imperative that brands do the same.

For some brands, it can be daunting to even know where to start. But, it should start with gaining a deep and meaningful understanding of customers. After that, brands can begin offering the authentic and relevant customer experiences that consumers now demand.

This process often begins with the collection of customer data and personal information, which, today, most people are willing to share. That is, if brands provide the right incentive for them to do so.

This topic was expanded upon in an illuminating new global study from AIMIA, a data-driven marketing and loyalty analytics company. The 2015 AIMIA Global Loyalty Lens Report showcased numerous insights into the behaviors and attitudes of global consumers, and highlighted areas where businesses can improve their ability to attract and retain loyalty.

The report found that, globally, consumers demonstrated a keen understanding of the value their personal information now holds, and they are willing to share it. In fact, an overwhelming majority (80%) of consumers are willing to share some level of information with brands including names, email addresses, and nationality. Additionally, a full 70% are also willing to share even more personal information such as birthdays, occupations, and hobbies.

But there is a catch. Since 68% do see their data as valuable, most consumers are only willing to share it for a fair return. AIMIA calls this the “data exchange economy.”

“Consumers are increasingly aware that there is a value exchange going on,” David Johnston, Aimia’s Group COO, told Loyalty360. “That means that their expectations of what they are going to get back from brands, and their expectations for how they are going to be treated by brands, are going up. And so far, on average, companies still are not doing a great job of personalizing experiences and services.”

For Johnston, this should come as a wakeup call for many brands. But it also presents a wonderful customer engagement opportunity to build and strengthen new relationships. It is an opportunity that Johnston believes will quickly disappear if brands to not act appropriately.

“Companies need to realize that the power in the Data Exchange Economy rests with the customer,” Johnston continued. “To be successful, companies must think about what they can do for the customer, not to the customer, with each personalized communication, experience, and offer.”

The Global Loyalty Lens report points out that the rise of social media and digital connectivity is largely responsible for these shifts in customer attitudes. This newfound willingness to share data when appropriately compensated is simply part of the new normal, and it is especially true among the younger generations.

In general, apprehensions over privacy seem to be dissipating, and this even extends to reduced concerns over data breaches. Such past security issues have not stopped younger consumers from sharing personal data with brands in any significant way. What’s more, year-over-year figures showed that most consumers are less worried about data privacy now than they were a year ago.

It is important, however, to note that this is not a reason for brands to loosen standards in this regard. It simply reflects the changing attitudes toward personal data and privacy.

“Nobody should take that as any form of comfort for the industry,” Johnston cautioned. “The highest levels of privacy and the highest standards and training around data protection should always be in place. But what’s happening in aggregate is that consumers, especially younger consumers, are more relaxed about sharing data because they do it in so many aspects of their lives.”

Brands simply cannot violate consumer trust, and there are other consequences to be wary of as well.

Data is crucial in creating personalization, and when it is done right, the rewards are significant. The report notes that a high degree of relevance will make a lasting impression. When brands get it wrong, or cross the line, there can also be dire drawbacks.

Being inundated with generic offers, or even too many outdated and previously relevant offers can quickly cause consumers to tune-out and even become frustrated.

Brands also have to ensure that they are using customer data in a responsible manner. And this even includes the use of data that is obtained legally and with permission. For example, it may be perfectly natural for a bank to request personal data regarding a consumer’s annual income. However, it may be crossing the “creepy” line for a grocery store to do the same.

“Brands need to understand what category they are in, and ask themselves why getting a specific piece of data will help them provide a better customer experience,” Johnston explained. “If a brand can answer those questions, then they can ask for the data. If they cannot, then they are getting into dangerous territory. The lines are in difference places for different categories.”

As they strive to collect and leverage data in order to create relevance and build customer loyalty, this is good advice for all brands to keep in mind.

Furthermore, they must also remain mindful of consumers’ newfound expectations. Personal information is not free for the brand’s taking. The consumer will ultimately expect something valuable and meaningful in return.

Recent Content

Membership and Pricing

Videos and podcasts

Membership and Pricing