When Does Personalization Get Too Close For Comfort?

Article by Ernan Roman
Featured on on TheDMA.com

One of my colleagues recently had an unnerving experience with a local car dealership. She was investigating cars online and hopped on the chat. After a few questions, the chat agent said, “OK I’ll email you the information.” That caused my colleague to have an uncomfortable question…how do you know who I am and my contact information? The chat agent casually replied that the chat matched her up with the dealership files, so the agent had every bit of information about her, including contact information, past purchases, etc.

So…when does the use of data cross the line? It is a fine line that marketers walk each day. Consumers want a personalized experience and the convenience of quick information—but at what cost? Is the lack of privacy worth the benefit of easy access?

Recently, LL Bean announced that it would be embedding tracking chips in its coats and boots in an effort to track consumer usage of its products post sale. This begs a major question, do consumers really want “this much” data usage?

What Do Consumers Really Think About Data Use?

In a study by YouGov for [24]7, 32 percent of those surveyed noted in regards to personalized messages that “it felt like an invasion of privacy” and 53 percent were “doubtful that providing additional information would lead to an improved experience.”

However, per the study, once consumers did share information, 47 percent said they “had higher expectations about their customer experience as a direct result of sharing personal information with companies.”

Takeaway:
Companies need to be transparent regarding the use of data and let consumers lead the way on how they want to participate and what they expect in exchange for supplying their information.

Netflix Data Drives Every Decision

Netflix uses every bit of available subscriber data to analyze literally every consumer movement related to content. According to the company, “If we can get each user to watch at least 15 hours of content each month, they are 75% less likely to cancel. If they drop below 5 hours, there is a 95% chance they will cancel.”

The company dives deep into incredible details of viewership data in order to decide on current and future programming as well as subscriber retention and prospecting actions. Literally every movement a consumer makes affects a decision.

According to Jenny McCabe, Director of Global Media Relations, “We always use our in depth knowledge (aka analytics and data) about what our members love to watch to decide what’s available on Netflix….If you keep watching, we’ll keep adding more of what you love.”

Takeaway:
Netflix bases every aspect of their operation on what consumers are watching. Their tracking, though comprehensive, delivers a tangible benefit to consumers by providing a significantly improved experience because their preference and viewing data drives better content options. So, their data powers their experience.

Brands Understand that Better CX Means Better Data Use

Most brands understand the importance of data utilization to drive company and marketing initiatives. However, many are still struggling with this conundrum: what is too much data to collect vs. critical data gathering to keep up with rapidly changing consumer demands?

According to the Data & Marketing Association in their latest DMA Business Report, 76.6 percent of companies said “elevating the customer experience” is a key business priority for their organization, with 57 percent calling it a “top” priority.” And “over 70% of marketers say investments are driven by customer expectations of more personalized and relevant brand interactions.” But with this, many companies still report that managing and optimizing identity data remains a challenge.

Final Takeaway: 
One of the key issues according to DMA is that there is “simply is no common standard for managing identity data across the industry.”

Data is a valuable tool for marketers, it provides amazing abilities to provide fine-tuned consumer experiences. But marketers need to be responsible and transparent to consumers in the use of their information in order to gain it…use it…and benefit from it.