Balancing Personalization and Privacy: 3 Ways To Successfully Do It
Data breaches and unethical use of data by some brands have made consumers wary of sharing their data with businesses. Yet, they crave personalized experiences. Here, Dimitris Sotiriou, VP of product management, Persado, discusses how brands can balance personalization and data privacy.
Burned by breaches and big tech sharing data without permission, consumers have questioned their data-sharing habits throughout the past decade while craving more highly personalized experiences. As marketers, we need to walk a fine line between providing customized experiences and reaching our audiences in a non-intrusive and authentic way. Below, I’ll break down the key steps brands should take to successfully balance customers’ data privacy with the growing need for personalization.
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1. Build Trust
Building trust with your customers is a critical step in balancing data privacy with personalization. Without trust, customers won’t pony up their data. And 81% of them won’t even give you their business, according to a CommerceNext report. Scandals like Cambridge Analytica opened the public’s eyes to how their data was being shared, sold, and controlled by ecosystems such as Google, Facebook, Apple, and Amazon. With brands increasingly demanding more data, consumers have become more cognizant of the companies they share it with. To deliver a highly personalized customer experience, however, marketers need access to these targeted data points. Recent CommerceNext survey results reveal that trust is the most important deciding factor in whether consumers will share data with a brand to receive more personalized content.
2. Communicate Authentically and Openly
While consumers can be receptive to sharing a spectrum of personal data, transactional value exchange is not enough on its own — branding and messaging still matter. Respondents from the above survey overwhelmingly revealed that brands that communicated in authentic, simple, and transparent ways were more memorable, leading consumers to interact and ultimately trust them more than others. This communication involves choosing the right words and phrases that will resonate most powerfully with the intended recipients and progressively using more targeted language as more data insights become available. By doing so, brands will demonstrate to consumers that they’re listening and respectfully sharing the content they want to see. According to BCG’s recent research, this marketing method can deliver an average increase in conversion rates of more than 40% across engagement channels along the customer journey, effectively reaching intended audiences and delivering the authentic and targeted communication they crave. Whether you’re a sole marketer or overseeing a brand, it’s essential to be authentic and genuine when interacting with customers because the need for quality content will continue to grow as we shift to a privacy-first world.
3. Empower Consumer Data Sharing
While consumer data has increasingly been used to inform brands’ strategic decision-making, the difference in today’s landscape is the level of transparency and control customers now have over their data. With a focus on improved consumer privacy, brands will need to move away from relying on third-party data through cookies and instead gain access to consumers’ first-party data voluntarily. To encourage consumers to share first-party data, brands need to clearly illustrate what it will be used for and the exchange value, such as delivering personalized content and experiences. Consumers want clear and concise answers to questions like, “what are you doing with my data?” and “are you offering me any incentives to give you my business?” By communicating personalized special offers, personalized emails, and product recalls that demonstrate intentional and insightful data collection, brands can ease their customers’ privacy concerns.
One successful example of this is the digital banking company RappiCard, which took its deep, holistic view of its customers and responded by creating a credit card that met customers’ needs and filled industry gaps. RappiCard offered no annual fees, more cashback, and nearly frictionless access to help build life-changing credit within Latin America, home to 650+ million people, nearly half of whom are unbanked. Using data-driven decision-making, RappiCard avoided the inefficiency of guesswork and subjective opinions on how to engage its customers about this new offering and communicated in insightful ways evident to consumers, ultimately delivering a 179% uplift in conversions and 250,000 new cardholders in the first six months. Without truly relevant content personalization, consumers won’t trust that a brand is being thoughtful about the data it’s requesting, and brands will miss numerous opportunities to connect with their consumers.
See More: Share and Bolster Data in a Privacy Safe Way With a Clean Room
Consumers Are Ready to Trade Data for Personalization
Looking ahead, marketing is moving in a direction filled with creative and meaningful ways that retailers and marketers can strengthen their relationships with customers. At the forefront of that shift is the desire for personalized experiences amongst consumers — now, brands just need to get it right. A successful strategy starts with a foundation of trust, authentic and transparent brand communication, and a focus on empowering consumer data sharing.
What steps have you taken to deliver personalized experiences while maintaining customer data privacy? Let us know on Facebook, Twitter, and LinkedIn.
