Article first published on businesslive.co.za on 29 October 2021, written by Paula Sartini
Customer privacy is a term we have become all too familiar with as the Protection of Personal Information Act and the General Data Protection Regulation have come into effect. However, checking boxes to ensure that you are meeting the demands of such laws is not going to win over your customers or help you to establish connections. It could also negatively affect the customer experience and damage trust.
While customers look for tailored and personalised experiences that delight, their experiences often feel generic and don’t deliver the desired response. This is partly because companies have got stuck in the data, using information like birthdays to remind customers: “We know you and are thinking about you”. However, instead, these reminders show people that you are watching them.
To create delightful customer experiences, companies need digital transformation so that they can gather information, drive personalisation and build trust. It’s about moving away from spying on customers towards rather engaging with them.
We're watching you
As customers continue to use online platforms to search for information, shop and engage friends and family on social channels, and as they connect to the brands they love, companies are inundated with an abundance of data about purchase history, search history, engagement history and more.
This information may be useful to determine what your customers like, and possibly gives you enough information to provide targeted deals and knowledge of the product ranges they have browsed online. But it doesn’t delight your customers; it may even have the opposite effect and lead to negative responses. While some theories state that customers may respond differently depending on where they are in the customer journey, many customers believe that the fact that you have their information does not give you the right to use it.
Rather than adding to the customer experience, many of the interactions from companies remind customers that they are being watched. And while people may have provided you with their details as a trade-off for something that they wanted from you, they don’t necessarily want to be bombarded with information or spammed with offers.
Company-centric data
According to new research, how companies use customer data is becoming more important to the customer experience. However, many companies are using a mix of customer data. This can be collected from businesses’ own platforms (first-party data) from other companies’ first-party data (second-party data) and from data that may have been purchased from a source unrelated to the company (third-party data).
While collecting data from cookies or observing purchasing habits has been a quick and easy way for companies over the past few years, this company-centric approach has a rebound effect on the customer relationship and delivers a lower return on investment.
Based on this, companies need to find new privacy-friendly ways to gather customer data first-hand. This move from tracking customer behaviour to engaging people also allows companies to establish deeper relationships with their customers and build trust.
Customer-centric data
After years of tracking customer behaviour, it could be a daunting process for companies to discover new methods of gathering data. However, according to Forrester there is a way to do it straight from the customer. Forrester calls it zero-party data, and it requires asking people directly about their contexts or needs.
In this approach, customers intentionally and proactively share data with a brand. This helps companies gain insight into people’s preferences, purchasing intentions and personal context, and enables them to get information about how customers want brands to engage with them.
This aligns with justice theory, which adopts three pillars. First, customers will give data to companies based on what they will get for the data, and if they foresee a fair outcome. This is known as distributive justice. Next is procedural justice, when customers are concerned about how the process of data is handled and how well they are treated after the purchase. Finally, interactional justice is about the elements of the interaction: the tone of voice and use of language.
By gaining valuable insight and data about customers, companies can engage them more meaningfully, improve their expectations and build trust throughout buyers’ journeys. Zero-party data can also be used to tailor personalised experiences that are authentic and delight customers.
Customers know what they want
For companies wanting to embrace the customer-centric approach to gathering quality data without infringing on customer privacy, the zero-party data strategy is the way. It enables businesses to gain the information they want in a way people are willing to provide it in order to improve customer experiences.
There are several mechanisms available for this, though companies should not bombard customers with requests for information or overwhelm them with questions. Rather, gathering customer data should be a seamless part of engaging clients.
To gather this data, companies would benefit from using tools that are easily available to each employee. For example, incorporating e-mail surveys into customers’ correspondence can help businesses gather valuable insight into what people’s expectations are of the brand and how they want the brand to interact with them.
Though many companies are waiting for a magic-bullet solution, it is about really listening to your customers and allowing them to tell you what they want you to know.