Brand Marketers Strike a Balance Between Personalization, Privacy
Individualized marketing is a powerful tool for brands looking to engage with customers on a deeper level, but with one wrong step, personalization can quickly become creepy.
Although 62% of consumers today say they expect personalization from their favorite brands, just 40% say they actually trust brands to use their data responsibly and keep it safe. The disconnect is one that martech executives like Shekar Raman are working overtime to overcome.
Raman is the CEO and co-founder of Birdzi, a martech company that works primarily with retailers and brands in the grocery vertical. He says that while the primary goal of most retail marketers is to tailor messages to each individual’s unique preferences, and create meaningful interactions through that process, there’s an ongoing struggle that takes place when marketers try to balance personalization with privacy.
As more retailers move toward an individualized approach to personalization, shoppers are worried that their personal information is being used inappropriately. Technology continues to evolve daily, and the lack of information customers have about how the technology works or the benefits it can provide can also create fear or distrust. Raman cautions that marketers must make building that trust a priority as they increase their personalization investments, or they risk alienating the very consumers they’re trying to reach.
“By being cautious and protecting customer privacy, grocers have an opportunity to win over wary shoppers. When brands are transparent about data collecting methods and what they are using said data for, customers are more likely to trust the brand,” he says. “When customer preference can switch on a dime — or with one negative experience — it’s essential for customers to build loyalty from the get-go. Then, by showing customers that they’re making the most of their personalization investments and receiving rewards in return, grocers can build long-term trust and retain customers.”
Personalization to Combat Inflation Pains
Because Birdzi works primarily with grocery retailers, the bulk of Raman’s focus is on serving the needs of marketers in that vertical. He’s noticed that as grocery prices have risen, personalization has proven to be a successful technique for increasing engagement and basket size.
To continue building on the success they’ve seen so far, though, grocers need to focus on being transparent about their data-collecting methods, and they need to offer guarantees that they’re keeping customer data safe.
“To establish immediate trust, grocers must be upfront about the customer information they will pull and remind them that their data is protected and private,” Raman says. “As well, grocers must give customers the option to opt-in or out of personalized communication and the level of data used. The balance comes from only collecting the data that is necessary for the personalization of services and only using it for that purpose.”
The Role of Individualization
Where does individualization fit into the average grocer’s marketing strategy? According to Raman, it comes down to establishing trust by personalizing outreach to the individual customer.
“When it comes to customer experience and engagement, individualization [or] personalization delivers higher value and better optimization of marketing budgets,” Raman says. “Segments give retailers a very good understanding of the attributes driving customer behavior.”
Raman also sees AI playing a role in the individualized marketing strategies favored by grocers. For example, he says that by using AI, grocers can quickly individualize coupons based on a customer’s purchasing patterns and ultimately create a stronger customer journey that inspires larger basket sizes and more frequent visits.
“Individualization makes it easy for grocers to offer true personalization to customers. With personalization, grocers can use past shopper purchasing behavior, commonly shopped categories, typical basket size or average budget,” Raman says. “When customers know that their data is being used to their benefit with relevant promotions or offers, long-term loyalty increases.”