Why Achieving Experiential Personalization Relies on Transparent Data Practices

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By Michael D. Fisher, Ed.D., Chief Executive Officer of 3radical

Data privacy continues to be a hot topic for marketers and rightly so. Not only are governments across the world tightening privacy laws and data regulations but tech giants are also taking matters into their own hands. The end of third-party cookies is already underway and Apple’s App Tracking Transparency (ATT) feature is an early example of a more privacy-focused approach. Both of these trends are the result of a clear shift in consumer attitude towards data privacy but not in the direction you might expect.

We Need to Talk About Consumer Data

3radical’s 2022 Consumer Survey highlighted that brands need to improve their data policy communications. Eighty-four percent of respondents would prefer brands to be more open and transparent about the information they collect and how they plan to use it. Alongside this, a recent study by McKinsey noted that consumer trust in companies is generally low. Only 10% of respondents trusted that consumer-packaged goods or media and entertainment companies were protecting their privacy and data.

Fostering trust and honesty with customers should be a key goal for brands. Research by Deloitte found that trustworthiness, integrity and honesty are the emotional factors that consumers feel most align with their favorite brands. That trust and honesty starts at the very beginning of the customer journey with a brand’s data collection policies.

The Rise of Experiential Personalization

With the recent media attention around data privacy, you’d be forgiven for thinking that no customer is willingly sharing any personal data. But our 2022 Consumer Survey showed that only 8% of respondents would refuse to give their data to a brand for any incentive – down from 12% the year before. Customers are seeing the value of their data like never before but will still share that information if they see the benefit of doing so. This is where experiential personalization comes into play.

Experiential personalization uses first-party data shared directly from the consumer to deduce sentiment, interest and motivation. It considers contextual intent to deliver relevant marketing messages, in the moment, to shorten the digital shopping aisle and improve customer experience.

Adopting transparent data policies is a key component of experiential personalization. It puts consumers front and center of decision-making so that they can define better experiences for themselves. It also delivers a compliant and fully consented consumer experience that produces rich, actionable data.

Here are a few tips to help start that conversation with your customers:

How to Ask Your Customers for Their Information

1. Allow customers to provide their data on their terms

Give your customers the ability to share their preferences and invite their feedback on current customer experiences. Build the science of feedback loops into your customer journey, let your customers tell you what they want and you can provide them with a better service. By giving them a better experience, they are more likely to choose your brand over a competitor. A virtuous and rewarding cycle for both parties.

2. Pick the right moment

Our consumer survey revealed that the moment that consumers were most willing to share personal data was when they are signing up for a loyalty program. In this scenario, there is a clear value for the consumer – exclusive and personalized offers – and the data will be used to their benefit. ‘When signing up to newsletters’ came in second and also had a strong YOY increase of 11%. Again, there is a clear and recognized value exchange in this scenario. Successfully asking for personal data is about picking the moments that make the most sense for each audience.

3. Clearly say what you will do with the data

So you’ll give your customers 10% off in exchange for their personal data. But what are you going to do with it? If brands collect data without a clear purpose that they are happy to vocalize, the implication is that there are more covert plans for it. So don’t just gather data for the sake of it, have a strategy and let customers know exactly how you’ll use their data to improve their experience.

4. Reward customers with better brand experiences

When it came to the rewards that consumers were willing to receive in exchange for personal data, the biggest YOY increases concerned better brand experiences. ‘More personalized promotions’ and ‘more personalized shopping experiences’ both jumped up by approximately 30% in one year. Showing value doesn’t just mean discounts and offers, it also means helping to shrink the digital shopping aisle and provide a better customer experience.

About the Author

Michael D. Fisher, Ed.D., Chief Executive Officer of 3radical, brings over 25 years of experience in organizational transformation through research, education, and revenue growth. He specialized in helping companies build collaborative, connected, cohesive cultures, with a commitment to personal and professional development and success. Disciplines include: progressive leadership and decision making, responsive data and analytics, nimble sales effectiveness, and agile customer data and business intelligence technology assessments. Additionally, Michael is on the board of directors of TheCustomer.net.