How to Balance Personalisation with Privacy in Digital Marketing
Personalisation can help enhance customer experiences and drive revenue. But with growing concerns around data privacy and intrusive marketing, how can businesses use personalisation in digital marketing while maintaining consumer trust?
The Importance of Personalisation in Digital Marketing
Personalisation is a powerful tool for creating engaging and memorable experiences, for customers, but too much can put them off your brand.
- 91% of consumers are more likely to support businesses that make relevant recommendations and offers (smarterhq.com)
- 36% think brands should offer more personalised marketing (circul8.com.au)
- 86% of ANZ marketers say that personalisation improves their marketing programs with 27% utilising AI and 29% utilising voice-activated personal assistants. (which-50.com)
The problem? Marketers find it difficult to strike the delicate balance between personalised marketing and consumer privacy.
- 51% of global marketing teams say they’ve become more mindful about balancing personalisation with privacy compared to two years prior (which-50.com)
- 32% of ANZ marketers find it challenging to balance personalisation with privacy compared to the global average of 35% (which-50.com)
The Privacy Paradox refers to the inconsistency between consumers’ discomfort with brands following them online and showing them remarketing ads based on browsing history and past purchases and their willingness to provide data for convenient and personalised shopping experiences.
- 78% of respondents believe that companies don’t take adequate measures to protect consumers’ personal data (cmo.com.au).
- When asked which companies consumers trusted most with personal data, 70% and 61% cited financial institutions and telcos respectively while streaming services (20%) and studios and networks (15%) came last (cmo.com.au).
- Despite their distrust of companies, consumers are willing to share personal data in exchange for personalisation and if the service meets their expectations. But they also want to be able to have their data removed (cmo.com.au).
- Millennials, in particular, are willing to provide personal information in exchange for convenience and personalisation despite being less trusting of brands, showing a gap between privacy concerns and actual behavior (gartner.com).
- Further 70% of millennials are willing to let brands track their online browsing and shopping behaviours in exchange for an enhanced shopping experience (circul8.com.au).
- While 62% of consumers believe they should have the right to ask companies to delete personal data, only 31% would actually do so if it meant giving up online shopping features like personalised product recommendations. (cmo.com.au)
Why Personalisation Matters in Digital Marketing
Personalisation is an effective way of reaching consumers without overloading them with information. It is about delivering curated content that contains the information they need at just the right time.
It’s a strategy marketers use to create tailored experiences for each consumer by showing them only the most relevant content based on data collected over an extensive period of time.
To personalise marketing, brands typically collect and analyse specific data based on:
- Purchasing history
- Browsing history
- Shopping cart
- Social media activity
- Google search terms
- Click behaviours
- Newsletter subscriptions
In order to execute personalised marketing effectively, brands must deliver highly relevant and timely content that resonates across different channels and is segmented by site traffic and customer personas.
But before brands can even begin to think about driving sales, they must first concern themselves with creating positive and meaningful relationships with consumers at each point of the buyer journey by addressing individual pain points, interests, and behaviours.
But not all brands deliver on this front. Only 12% of consumers say they get customised assistance from brands (gartner.com).
When consumers feel that they are not being recognised, they may go elsewhere for a better and more personalised experience.
Fortunately, there are many points throughout the buyer journey that present opportunities for personalisation, including:
- User device
- Communication channel
- Time of day consumer is most likely to engage
Brands can also personalise media content such as:
- Mobile app content
- Discount offers
- Sale alerts
- Product recommendations
- Transactional communications (i.e. invoices, receipts, shipping notifications)
To make personalisation more effective and less invasive, brands need to make it relevant and useful to consumers. Online shoppers are more forgiving of disruptive ads that are of genuine interest to them.
Brands should also be aware that bad personalisation is worse than no personalisation. Addressing consumers by the wrong name (or no name at all) in emails, for example, can do more harm than good.
With some coding, brands can set emails up to address recipients by the name they provided upon signing up or subscribing to your email list. If there’s a glitch in the system, back-up coding will make these emails revert to a default greeting like “Hi there” or “Hello, friend”.
But even with these functions, some brands can still get it wrong. That’s when consumers receive emails with openers like “Hello unknown”.
How to Balance Privacy with Personalisation
- Recast the relationship between personalisation and privacy as reciprocal and collaborative as opposed to diametrically opposed. With that in mind, redefine the requirements for collecting, accessing, and using consumer data for creating contextualised and trustworthy customer experiences.
- Keep the focus on consumers. Only use their data to enhance their experience of your brand and make the online buying process more efficient. Keep all media content and direct communications in context.
- Educate key stakeholders in your organisation on how respecting consumer privacy can enhance their experience with your brand and its role in building consumer trust and generating genuine value.
- Stay up to date on consumer data privacy laws in Australia and other laws governing the collection, storage, and use of individual data across all national and international territories you serve.
- Use best practices for consumer data protection in day-to-day business operations.
- Be more transparent by making sure that consumers know that you have their personal data and that you will use their data for their own benefit. Reassure them that their data isa safe with your brand and that it will not be resold or used for harmful purposes.
- Collect all possible data to create buyer personas that will help you create more relevant and contextualised content and targeted ads. When collecting data for personalised marketing, be careful not to ask too many questions, which might feel intrusive or cause them to abandon the survey altogether, but don’t ask too few questions that you are unable to gather usable data.
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