Marketers Struggle to Balance Personalization and Privacy
Striking the right balance is never easy.
While consumers are increasingly coming to expect personalization in their inboxes, too much personalization can damage trust and steer customers away. Nobody wants to feel like they’re being watched, but recent surveys show consumers are also growing increasingly frustrated with marketing materials that aren’t targeted enough.
Seventy-one percent of consumers now say they expect companies to deliver personalized interactions, according to research from McKinsey. Companies that excel at personalization generate 40% more revenue than their slower-growing counterparts.
With every buyer interaction now at stake, personalization has become the key to making a lasting impact. That’s leaving brand marketers to question where the sweet spot really is and whether their personalization efforts are creepy or cool.
What’s the best way to prove to customers that you know them on a personal level without relying on third-party cookies or other outdated data collection tactics?
Owler’s Derrick Jenkins says it begins with a simple ask.
“As marketers, we need to be clear on how we ask consumers for the right to capture their data and how we will use it. It’s crucial to remember that we are marketing to people, not just data points,” says Jenkins.
Jenkins believes that personalization can hurt the consumer and brand relationship if the consumer is confused, startled, or bothered by how a brand has tried to figure them out.
“It’s effectively a breach of trust with the brand and the channel when an overly personalized message is delivered,” he says. “All marketers want to attract the right person, but there is a balance between being welcoming and creepy.”
Brand Loyalty Is Suffering
Brand loyalty is suffering in 2022. Three-quarters of consumers have switched to a new store, product, or buying method during the pandemic. Job changes and supply chain disruptions have contributed to the decline. While robust loyalty programs can help encourage repeat visits, research shows it’s personalized communication that really prompts consumers to return or reconsider a brand. According to McKinsey, 78% of consumers say they are more likely to refer friends and family to companies that personalize their communication, and 76% are more likely to consider purchasing from brands that personalize.
Non-personalized communication poses a business risk that brand’s can’t afford to take. But finding the sweet spot, where marketers are gathering zero-party data from consumers without making them feel analyzed or surveyed, isn’t always easy. At the moment, data sensitivity is high.
Jenkins suggests gathering information from the consumer in a way that isn’t overly personal or sensitive, similar to how you might behave on a first date. In the case of marketing personalization, surface level intelligence is enough to build on.
Personalization Done Right
“Amazon does a good job with personalization, which makes sense as it’s a retail environment with an abundance of purchase history. StitchFix ensures the consumer has a great experience. They ask an abundance of questions to help develop a portrait of your personal style and they suggest new clothes to consider,” Jenkins says. “On the other hand, some brands do a poor job of personalizing their efforts. Some of the retargeted health ads that suggest you may have a condition based on a symptom you may have searched. These ads are misleading and unsafe.”
Zero-party data could end up being the solution the industry is looking for, Jenkins says, since it’s significantly less assumptive. He hopes to see more education, so consumers have a better understanding of how personalization is done and how it benefits them, as that can help to mitigate consumer fears that are holding the industry back.
“We’ve seen the stats that show consumers welcome personalized marketing experiences. However, many want to understand how it’s done and why it benefits them,” he says. “You often hear comments such as, ‘It seems like they’re reading my mind or listening in on my conversations.’ Explaining how personalized marketing is executed might help to mitigate any fears or concerns.”
Stephanie Miles is a senior editor at Street Fight.