Companies face a paradox.
Consumers want to be rewarded for their loyalty to a company or brand, but recoil when asked to share their personal data. At the same time, companies risk losing their competitive edge by not personalizing their offerings and acknowledging loyal customers.
Marketers toss around terms like “value” and “transparency” when explaining how to win a customer’s trust, but a company’s understanding of these terms may differ from consumer expectations.
When Forrester Research surveyed approximately 5,000 US adults on why they’d share personal information with companies and how companies can win their trust, it found tangible rewards like cash are more desirable than convenience.
Forty-one percent of respondents said they’d share personal information with companies for cash rewards. Nearly 30% would share their data in exchange for loyalty program points and only 11% chose faster customer service.
Being transparent about how you handle consumers’ data is also critical, said the report’s author, senior analyst Fatemeh Khatibloo. “Despite the demand for relevance and recognition,” she wrote, “customers are loathe [sic] to think that their data is out of their control, and that it’s being used not just for preferential treatment, but potentially to discriminate against them too.”
A transparent privacy policy should explain when the company collects user data, what it does with the data, whether it will sell or share the data and whether it will delete the data when asked to, according to the report.
“Transparency can start with process and design, so that may be the easiest thing that many companies can do,” Khatibloo told AdExchanger. “As for meaningful choice, this is the one that has the most upside for the marketer – there is so much waste in marketing communications, that simply asking customers to choose how they want us to communicate can have a positive effect on marketing efficiency.”
Providing customization options instead of just allowing consumers to opt in or out of interacting with one’s company is another way to keep people engaged. “The single most powerful tool in a marketer’s arsenal is the preference center,” according to Khatibloo.
When given the option, consumers are more likely to tell companies what they prefer, according to the survey findings. Nearly a third of consumers have used a preference center to indicate their channel preferences, and 27% have used one to indicate their frequency or interest preferences.
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Implementing these changes can seem extensive and daunting, Khatibloo acknowledged. “The recommendations all disrupt the marketing tech stack a little, so which one a company tackles first depends not only on their desire, but what they can do,” Khatibloo said.
The bottom line, Khatibloo wrote, is that being transparent and offering meaningful choices will make customers receptive to telling businesses how, when and where they want to interact.
