Personalisation is one of the hottest topics in marketing; the promise of segmenting customers into ‘markets of one’ is alluring for any brand.
But the pushback from consumers is almost as strong. That feeling of being ‘watched’ may be enough for consumers to abandon a website or leave a store.
So what can marketers do to get the benefits of personalisation without the backlash?
To find out, Econsultancy held a roundtable event, Understanding the Customer Journey: Optimising Engagement Levels for Greater Customer Acquisition & Loyalty in Melbourne, Australia. Dozens of client-side marketers came to discuss the trends, best practices, and issues they are facing in CX.
The roundtables were moderated by subject matter experts from Econsultancy and our event sponsor IBM Marketing Cloud. Participants brought their own experiences, questions, and challenges to the table for open discussion.
Below are recommendations from brand marketers about how to personalise without being ‘creepy’.
1) Be clear about the data you are collecting
According to participants, the first step to avoid being creepy with personalisation efforts is to let consumers know what data is being collected about them.
Many jurisdictions, such as the EU and Australia, have well-defined privacy laws which, when followed, go a long way toward satisfying this requirement.
Brands can do more, though. Instead of burying the data collection policy on a privacy page, a simple banner at the top or bottom of the page lets consumers know that their browsing or purchasing behavior may be used to enhance their customer experience.
Doing so can pay off in greater engagement. A recent study published in The Journal of Retailing, Unraveling the Personalization Paradox, found that firms who used overt data collection were able to use the data more effectively.
In a controlled experiment, participants were more likely to click on personalised ads when the brand disclosed its data policy to consumers.
The graph below shows that in the study, click-through intention online increased when the brand was open (‘overt’) with its data gathering policies.
2) Know the acceptable limits of data collecting and usage
Telling consumers how you are going to collect and use data is not enough, however. Brands should also keep a close eye on what is currently acceptable to consumers, according to attendees.
Though what consumers find acceptable changes over time, it is likely that consumers currently appreciate a lot less personalisation than most marketers believe.
In a 2015 survey of over 1,500 American consumers, researchers at University of Pennsylvania reported some surprising findings:
- 91% of respondents disagree that “If companies give me a discount, it is a fair exchange for them to collect information about me without my knowing.”
- 55% disagree that “It’s okay if a store where I shop uses information it has about me to create a picture of me that improves the services they provide for me.”
- 84% agree that “I want to have control over what marketers can learn about me online.”
Also, RichRelevance, an omnichannel personalisation provider, recently conducted research in the US and the UK to discover what consumers find ‘cool’ and what they think is ‘creepy’.
Whereas mobile product scans are deemed ‘cool’ by 76%, facial recognition technology is still largely seen as ‘creepy’ by three people in four (75%).
Both reports are worth reading before launching a personalisation project.
3) Use only some of the data that you have
Participants felt that consumers respond well to some personalisation but are turned off by too much.
One attendee said that seeing their first name in an email is fine, but they don’t want to see their name in an ad on the website.
A recent study conducted at Stanford Graduate School of Business shows that simply adding a first name to an email has a profound effect.
Researchers found that adding the name of the message recipient to the email’s subject-line…
- increased the probability of the recipient opening it by 20%,
- increased sales leads by 31%
- and reduced unsubscribes by 17%
4) Personalise without personal details
Finally, another way attendees suggested that brands can use personalisation is to provide a ‘personalised’ service without identifying a consumer personally.
Though it may seem like using less data would be less effective, avoiding the creepiness factor altogether may produce the best results.
Pampers, the US diaper brand, recently A/B tested content for consumers on China’s ecommerce platform Tmall.
Existing customers saw discounts and exclusive deals, whereas new moms saw content about brand reputation and its loyalty programme. The results were then compared to consumers who saw the standard brand page instead of ‘personalised’ content.
According to a report from L3, post-personalization conversion rate more than tripled for consumers who saw the targeted content.
Personalisation is certainly the next frontier for marketers to explore. Offering one-on-one messaging and offers is a great way to grow awareness and increase conversions.
It comes at a cost, however. Brands who overdo personalisation risk being perceived as creepy which puts customers off from engaging.
Through arriving at a careful balance of the potential of personalisation while avoiding creepy tendencies, attendees agreed, marketers should be able to use personalisation without damaging the brand.
A word of thanks
Econsultancy would like to thank all of the client-side marketers who participated on the day and especially our table moderators for the Personalisation table, Mallory Martel, Marketing Manager, Sidekicker.
We’d also like to thank our sponsor for the event, IBM Marketing Cloud, and we hope to see you all at future Melbourne Econsultancy events!