As the demand for personalised services from consumers increases, more organisations are looking to collect data to provide them with their desired experience. However, as uncovered by Twilio in its latest report, 49 per cent of consumers do not feel confident in sharing their data with companies due to protection concerns.
Consumers are finding themselves in a catch-22 situation. They want better interactions but don’t want to share data to enable them. In its fourth annual State of Personalisation Report, Twilio, the customer engagement platform that drives real-time, personalised experiences, revealed that despite the customer benefits of data sharing, there’s some scepticism among consumers about how brands are using their data.
When examining the changing consumer attitudes towards data management, the significance of brands being transparent with their customers becomes evident. There has been a year-on-year decline in confidence about how personal data is used with 22 per cent being less comfortable than last year.
Over half (51 per cent) of Twilio‘s respondents in Europe stated that they did not trust brands to keep their personal data secure. As a result, organisations must disclose how they are managing and storing data to build consumer confidence. Having a robust and accessible data privacy and protection strategy will help offset any negative perceptions of brands that consumers have when it comes to their data.
Sam Richardson, customer engagement consultant at Twilio comments: “With an oversaturation of brands all vying for consumers’ attention, data-led personalisation is a non-negotiable for organisations looking to cut through, and is increasingly something consumers have come to expect. But they need to make sure they are using consensually-collected first-party data to build trust with consumers. Insights can be transformed into relevant communications and can power timely, personalised engagements that respect customer boundaries.”
Overcoming the hurdles
Reassuring customers is all about transparency and giving customers autonomy; they like to know they’re in the driver’s seat. Business can rebuild consumers’ trust in data-exchange, by taking the following steps:
- Emphasise the value exchange – Data collection isn’t solely beneficial for businesses; there are real gains to be made for consumers too. Make sure to communicate the personalisation and CX benefits, and emphasise the interdependent relationship between data and personalisation as an enabler of that.
- Be transparent – Part of communicating that value is also being honest with how data will be used and disclosing when you are collecting it. That way consumers won’t feel deceived.
- Prioritise data privacy, protection and ethics – Having robust strategies, processes, and credentials in place to securely manage and store swathes of customer data is essential. Ensure this is front and centre for consumers to access.
- Give consumers autonomy and honour customer preferences – Ensure opting out of data sharing practices is an easily accessible option to give customers that much-desired control of their information.
- Don’t overdo it – Only retrieve the data you truly need. Gathering excess data not only creates unnecessary volumes of data to process and interpret, but means there’s more data for businesses to protect too.
Taking action, one way or another
A good personalised experience is every consumer’s dream. So much so that if they receive one, they are likely going to let friends and family know. According to Twilio, 49 per cent will spread the word, while 51 per cent say they will become repeat buyers after a good personalised experience. A further 33 per cent say they will become a member of the brand’s loyalty programme for deals and rewards too.
However, misusing data or not using it to its full extent could have the opposite of the desired effect. European consumers are less likely to make a purchase (36 per cent) and will potentially stop shopping with the brand entirely (19 per cent) if they have a poor experience. Eighteen per cent even state they will buy from a competitor.
Incoming: First-party data
Over a third (36 per cent) of European consumers feel personalisation has become less targeted over the last 12 months. With generic or irrelevant ads on the rise, likely due to the phasing out of third-party cookies, brands need to consider first-party data as an alternative.
Customers consensually give businesses first-party data or generate it through their interactions, and it helps to alleviate consumers’ distrust and scepticism. It also provides the most up-to-date and valuable insights when building personalised experiences. A win-win for brands and consumers alike.
Sam Richardson adds: “This disconnect between data sharing and personalisation is creating a real conundrum for brands to navigate – you can’t effectively personalise communications without leveraging customer data. It’s a co-dependent relationship. However, consumers have their reservations about data sharing. There is a lot of myth busting work for brands to do to reassure their customers and communicate the mutual gains of sharing data – including the rewarding shopping experience for consumers.
“Whilst brands must recognise the value that personalisation strategies can deliver, they must prioritise building that trust and being transparent with how they plan to use it. Transitioning to first-party data retrieval is a logical approach to achieve this.”