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The Consumer Data Dichotomy

Posted on: May 8, 2020 | Posted by: Sona

Bridging the Gap between Desires for Personalization and Privacy

Data collection is all around us—even if consumers aren’t aware of it. In January 2019, Pew Research conducted a survey about customer awareness regarding the data Facebook collects about them. 74% of users did not know Facebook maintained a list of their interests and traits, and over half of users were not comfortable with this information being compiled. However, when looking at instances where data collection was considered by the consumers to be accurate, perception trended more positively.

This unveils a critical data dichotomy: while consumers desire greater privacy, they also value personalized content. In fact, seven out of 10 consumers state they want content and ads personalized to their interests, and 58% of consumers said personalized ads and content improve brand perception—further emphasizing businesses’ need to access the right consumer data to drive 1:1 interactions. 

The reality is, 72% of consumers will only engage with personalized marketing messages, despite 86% being concerned about data privacy. This apprehension often stems from uncertainty about what data is being collected and used. In order to address consumers’ needs, businesses must prioritize a higher level of data transparency. At the same time, they must ensure data is used to create memorable, personalized experiences. 

Complying with Data Regulations from the Start

Bridging the gap between personalization and privacy begins with businesses ensuring they align with government regulations for data usage, such as the General Data Protection Regulation (GDPR), which dictates strict rules for controlling and processing personally identifiable data (PII). This ensures consumers’ privacy demands are upheld from a legal perspective. 

Next, businesses must tackle privacy from a perception perspective. After all, if a consumer feels their privacy has been compromised, they will not engage with a brand—even if the engagement was fully legal. This requires brands to take an intelligent approach to personalization, one that requires a deep understanding of each customer’s unique preferences. This includes:

Engaging with the Right Amount of Personalization 

Critical to successful personalization is the ability to provide a tailored message to each individual. Yet, 38% of consumers stop doing business altogether if personalization becomes creepy. It’s vital to ensure that data isn’t overused, which occurs when too many data dimensions are taken into consideration. Each added data dimension increases relevance by 5% but simultaneously increases the risk that the message will be perceived as invasive, thus impairing the effectiveness of personalization efforts and leading to more drop-offs in the consumer base. 

The right balance is achieved by tapping into the personal information of targeted consumers and utilizing a limited amount of data based on its ability to deliver value and a relevant impact in line with privacy concerns. For example, a hotel group can deliver customized mobile experiences based on location in accordance with local weather and events, leveraging a single data dimension to increase customer experiences and satisfaction without getting into overly personal outreach from the get-go.

Determining the Best Channel of Outreach

The channel on which a business engages a customer can make or break the interaction. For instance, 82% of text messages are read within 5 minutes, but consumers only open 1 in 4 emails they receive. This trend indicates a prioritization of text messages over email. At the same, consumer’s preferences are unique, with some deeming text messages as a channel for person-to-person communication, rather than business communications. Therefore, it’s important for true personalization not to use market trends to determine action, but to leverage customer’s specific data to make decisions. This form of personalization occurs behind the scenes, tailoring the customer journey to the individual’s unique preferences in a subtle manner.

For example, if a banking customer frequently taps on notifications sent to their mobile app, a bank can use this data to prioritize a push notification encouraging them to engage in a new retirement saving plan, rather than deploying the same offer in an email. This targeted outreach builds upon consumers’ previous behavior in order to offer a more convenient experience on the customer’s preferred channel. 

Bridge the Personalization-Privacy Gap with ZineOne 

While 1:1 personalization is imperative for building long-lasting relationships with customers, it is vital that engagement efforts are not perceived by customers to come at the expense of privacy. This requires businesses to offer full transparency from the onset, enabling consumers to opt into outreach opportunities. 

With ZineOne, businesses are empowered with the best of both the personalization and privacy worlds. Our AI-powered Intelligent Customer Engagement (ICE) platform allows companies to instantly harness data on customer’s historic, in-the-moment, and environmental context to ensure every interaction resonates. At the same time, our platform does not store customer PII and receives customer consent in line with all government regulations to ensure personalization efforts do not compromise privacy or security. Schedule a demo to find out how.