Preference Centers Promote Privacy and Engagement

Preference centers are a significant area of interest for organizations looking at ways to ensure they are being privacy compliant while collecting first-party data. However, it seems to be an area where there is either great success or great struggles for marketers.

Loyalty360 spoke with supplier members for their insights and perspectives on ways brands should best incorporate preference centers into their business strategies and how they can benefit customer loyalty.  

Many brands today are looking to leverage preference centers to better understand their customers. It can be a resourceful way to collect additional customer data regarding communication channels.

“In our experience, customers are willing to share information for a more personalized and relevant experience with the brand – the critical element for success is to be prepared to act on the data – i.e.,” says Elisabeth Keller, Senior Vice President and Chief Client Officer at Brierley.

Bindu Gupta, Senior Director ICF Next, explains how with enhanced privacy laws and the depreciation of cookies, preference centers can provide valuable data to boost personalization and engagement. She says, “A preference center is an effective tool to collect zero-party data. Brands can not only collect communication channel, frequency, and content type preferences, but also field short surveys to gain more insight into customer’s needs and habits. Success lies in what kind of data brands are collecting and how they are using this data to create a more valuable customer experience.”

If a customer requests to communicate only via a certain channel or at certain frequency, brands need to honor those choices. Keller adds, “The worst thing is to ask for customer preference and then ignore the input.”

This is also critically important when considering customer preferences within the context of data and privacy regulations/legislation.

Let’s Get Personal
While personalization tactics are showing how customers are more willing to exchange information if they know they will get a better experience, brands are discovering other ways to encourage customers to share more about themselves.

Natasha Janic, Senior Product Marketing Manager, Loyalty Management at Salesforce says, “A great way to do this is to reward customers for it. We’ve seen many customers use their loyalty program as a way to gather valuable first- and zero-party data. They are collecting data as simple as a birthday, to who customers are shopping for during the holidays, to their interests and preferences.”

Keller agrees, saying, “Using a loyalty program to incent customers to complete a profile – i.e., give a customer points or badges for completing critical profile information – is a great way to encourage customers to engage.  It doesn’t need to be a large number of points – we have seen small amounts of points be successful in driving this behavior.”

Janic adds, “The key to making this work well is to deliver very clear value to customers in exchange – the benefit of sharing this information has to be obvious in the form of rewards and personalization.”

Connie Sisco, Senior Connections Strategist at ICF Next, shares this sentiment, saying, “It is also critical that brands are transparent about why the information is needed, and then deliver on that reason. Adidas does a great job of this in their Welcome Series, asking customers directly, during onboarding, to ‘Tell Adidas what you like, and we’ll send you things you love.’ The communication is direct, timely, and they state up front what they intend to do with the information shared. That’s a win for both the customer and the brand!”

Gamification – making the engagement fun - is another way to engage customers. Says Keller, “For example, complete a profile element and unlock a game mechanic such as spin to win, etc.”

Sisco agrees, saying, “Brands should look for natural moments to encourage customers to share more about themselves and make it fun! Some good opportunities are at the beginning of a new year, when a customer joins for the first time, or as a response to a customer action.”

Family Matters
Recently, brands have taken an interest in “householding” regarding preference centers and management. It can be challenging for brands market to and identify individual household members under one account. There is a debate about whether brands should focus solely on a “main” account owner in a household.

Lauren Sutherland, Senior Strategist ICF Next says that the answer depends on the industry, the program, and the product. “The basic rule is that brands must have a plan to action on any data they collect from members and consider local regulations concerning the data of minors, if applicable,” she explains. “The most common reason for collecting ‘householding’ data is to personalize a service or message—to tailor a family hotel stay or offer condolences on the passing of a beloved pet.”

Keller advises brands, “If there are multiple account holders in a household, speaking to each of them based on their specific account and purchase behavior can be important. For example, each adult in a household can have their own frequent flyer account and so it is important to speak to each member.”

Sutherland explains that the reasons to collect such data work best when there is high frequency in use of the brand’s product, high program engagement by the member, and high relevance of the data’s purpose. Otherwise, it’s best to focus on the ‘main’ account owner when there is little to no benefit to their household members when collecting data on them.

In retail programs, some may not be “main” account holders, but are influencers in purchasing, or have different purchasing behavior than the main account holders so brands should strive to market to each member in a meaningful and relevant way.

Adds Keller, “Needless to say, preference centers can help with this type of personalized messaging.”

Focus on Simplicity
Sometimes, brands find that preference centers can be overwhelming or too complex for both customers and management. But how can brands simplify the operation without sacrificing valuable data? 

Brierly cautions against gathering data for data’s sake as it creates noise and complexity in preference centers. Keller says, “Focus on what’s important to driving an improved customer experience with your brand and what is meaningful to driving a deeper connection with the customer.  Focus on the elements that you can action. This can be an iterative activity where you start with a small amount of focused data and build on it as your ability to action becomes more sophisticated.”

At ICF Next, they advise brands to establish a universal profile to store individual preferences that help manage interests and personalize content to keep your customer base engaged.

Notes Katie Berndt, Senior Director at ICF Next, “A common challenge that many of our clients deal with is providing a seamless way for their customers to share declared data (also known as zero-party data) as they interact across channels without the process feeling clunky or unnatural. We recommend using third-party cloud-based software to design quizzes and polls that capture zero-party data and minimize the complexity of building a robust preference center. Such software can integrate with tools that companies already use, which makes it easier to send customer data that’s being captured to a CRM platform, and easier for an operations manager to activate on this valuable data through marketing software.”

Preference Centers as a Tool for Privacy
With changes in data and privacy regulations/legislation, it can be challenging for brands to leverage their preference centers to manage communications and advertising permissions. It could become even more significant in the coming year as legislation continues to change.  

“This should be a more significant focus for brands,” says Keller. She explains that preference centers provide necessary opt-in details to ensure that customers are raising their hands for communications (or not) and that brands are honoring their selections (a critical element in data and privacy regulations/legislation).

Lauren Sutherland, Senior Strategist ICF Next advises that if brands do not currently have preference centers that enable account holders to specify their communications and advertising preferences and permissions, building out such options should be a more significant focus for brands moving forward.

She says, “As competition for consumers’ attention increases, allowing account holders to set their own communications and advertising preferences (including channel, frequency, and topical interests), gives brands the opportunity to send more intentional and relevant messages. When it comes to increased data and privacy regulations, preference centers can serve as a living contract between holders and brands regarding consent to share data as permissions don’t need to be limited to communication and advertising alone. At the same time, when brands demonstrate proper use of preference centers, they build and maintain trust with their members at an individual level.”

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