How to create relevant, data-driven customer experiences while limiting data collection
A quick recap on the importance of relevance
We've told you that poor personalization sends 40 percent of customers running for the hills. Fortunately, this frightening percentage is countered by Adweek, which states that three quarters of customers are more likely to buy from a brand when they are recognized, remembered or served with relevant recommendations – relevance being the operative word in this sentence. After all, a message is only truly personalized if it's adapted to meet the needs or interests of its receiver, that is, when it is relevant.
A quick recap on the threats of unrestrained data gathering
Relevance can only be achieved by getting to know your customers through and through. Enter data gathering: by tracking our audiences, we are perfectly capable of collecting even the tiniest, most personal details. This opens doors to a wealth of possibilities but more often than not, it leads to over-personalization.
The same data-driven machines that store all your customers’ information also put the data to use in ways that can become creepy, or at least awkward. Imagine a bank suggesting discounted golf clinics to non-athletic clients, while failing to catch on to the fact that they pay for yearly museum subscriptions. They will miss out on an opportunity to make relevant offers.
And this isn’t the only downside to gathering data with reckless abandon. As it turns out:
- Returns of scale on data will eventually decrease, as the information will stop being relevant to what you are trying to achieve.
- Blatant data gathering might result in a breach of trust, especially when companies can no longer explain why they wish to collect certain information.
- It will also make prioritization harder, leading to higher costs and decreased accuracy.
- Unforeseen and swift developments, such as GDPR, may render investments useless.
- Social norms are still evolving. The first company to try something new risks falling flat on their face.
- There is a genuine risk of backlash when customers find out that you misuse data or use it to their disadvantage. Using data that wasn’t obtained directly from them is also not done.
- Customers will be put off when they feel you don’t respect their time or take into account what you should know about them.
This is why you should continue to gather customer data
All in all, there are some serious threats when it comes to data gathering. On the other hand, proper collection and application will lead to the data-driven customer experiences that will keep your clients coming back for more. It is, in fact, the best way to distinguish yourself from your competition, as relevance is the key to your clients’ hearts.
Data-driven customer experiences are the best way to distinguish yourself from your competition, as relevance is the key to your clients’ hearts.
That said, relevance isn’t the only benefit of selective data collection. Carefully considering which data to collect will also allow you to determine your goals more clearly, and make (IT) investments accordingly. Knowing what you will use the information for will lead to more relevant data sets. This, in turn, will lower costs for storage, maintenance, quality assurance and security.
How to create data-driven customer experiences without being creepy?
Ultimately, online interaction with your clients should become similar to face-to-face contact, where you would not misuse information but rather treat what is shared with you confidentially.
In order to achieve relevant and secure contact with your client, we advise you to take the following to heart.
Create an experience architecture
First of all, break free from tradition. Generally speaking, data gathering is done by IT, whereas interpretation, personalization and the building of customer journeys is a task carried out by marketing, sales and service departments. Service staff interacts with customers personally, but sharing the information they gathered it is not incentivized.
In order to make the most of your customer information, you will need to bring people from IT, data, brand management and marketing together in one team. Experience engineers, or analytics translators, will now be able to bridge business, data and implementation, allowing for the design of a truly human-centric experience architecture.
This will require the tackling of political issues. One way to achieve this, is by combining a common framework (with cost, gains and likelihood for implementation dimensions) with planning poker. This agile methodology will enable teams to come to an understanding of financial impact across departments.
Do this and you will be able to put your data to use in a much more efficient way.
Lay out a sound foundation
Remember Maslow? This American psychologist taught us there are different levels of needs, ranging from physiological needs to self-transcendence. Each need requires fulfillment in order to ‘access’ the next level.
Similarly, there is a digital hierarchy of needs. Personalization is off the table so long as your website keeps crashing. Data gathering is pointless if your product does not meet your customers’ wants or needs.
We tend to focus on trendy tools like crows are drawn to shiny objects, but we need to remain patient and solve the root problems before latching onto the cool stuff. Therefore, make sure your website works by monitoring basic parameters, such as load-time, outages and 404s. Also, ascertain whether your services are easy to use by your customers.
To lay out the foundation, design research is your weapon of choice. Service design blueprints, mental model templates and user personas are among the artifacts that will allow you to capture and communicate the essentials within your organization.
Talk to your customers!
Get to know your customers and develop a feel of when it is appropriate to target them. Remember what we said about recognizing customers, knowing their preferences and serving them with relevant recommendations? Indeed: 75 percent are more likely to buy from you when you do this right. And they are more than willing to help. Accenture’s Personalization Pulse Check 2018 found that 74 percent of customers would find it valuable to tell brands exactly what they want.
We strongly advise you to research what you are delivering now and what you should be delivering to satisfy your customers’ needs – and to do so on a regular basis.
Prioritize business impact
Although prioritization according to business impact seems obvious, we need to keep in mind the internal feasibility. Again, politics are at play, influencing decision-making, even when we wish to base our arguments on more objective information, like revenue and costs. This is something to take into account when drawing up your plans and budgets.
Ultimately, online interaction with your clients should become similar to face-to-face contact.
Determine the optimal point of investment in data
Data gathering enables you to build so-called living profiles: collections of your customers’ unique preferences, passions, and needs that are continually optimized. Measure the costs of set-up, storage and application of these data sets. Measure the value they bring, both quantitatively (increased sales, decreased churn rates) and qualitatively ("Do they help me become a more lovable brand?").
Insights into these matters will allow you to determine whether you’re collecting too much data – risking a breach of trust and subsequent loss of revenue – or just enough to create the relevance you seek.
Empower the user
We mentioned the potential backlash you might suffer when customers feel you are misusing their data. To avoid this, consider the deployment of data-sharing preference management and privacy by design, which allows the user to see and adjust the level of data storage and personalization. Do consider what it is the consumer wants when his or her data is being shared.
The above-mentioned Pulse Check 2018 details that 83 percent of consumers are willing to share personal data to enable a high level of personalization, provided that the brand is transparent in how it’s used and that the customer has control over that usage. Therefore, said system might be an ideal solution.
Keep it up
Attitudes change, so consider investing in research with a small panel or carrying out a pulse check to see where your customers stand.
Furthermore, we recommend that you regularly check your available data to remove irrelevant information and that you stop capturing data that does not tie into operation and personalization use cases.
Less is more: collect only what you need
We have seen the threats that come with data gathering and have reached the conclusion that less is more. Determine which information you need to collect and why you need it. Establish from whom you need to collect it and when. Collect only what you need and don’t overstep your bounds. This will enable you to create truly relevant data-driven customer experiences that your customers covet.
Of course, this is not an overnight job. There are many things to take into consideration. However, we encourage you to get started and invite you over for a good cup of coffee and discuss where you are, what you want to achieve and how to start reaping the benefits of trustful, meaningful customer relations.
With regard to Adweek countering the findings, we now say that poor personalization leads to people switching companies, but personalization done well leads to more sales. That’s what we meant when we said people are recognized, remembered or served with relevant recommendations. It’s essentially an explanation of what we mean with ‘personalization’.