Question – Why does everyone seem to point to retail when issues of data privacy arise?
Answer – Because consumers are more aware of their data vulnerabilities than ever before and retailers, by definition, are front and center.
Consider this: Only 11% of consumers trust retailers to properly handle data breaches, according to a survey by First Data.
According to a 2020 Deloitte study, consumers place 83% of the responsibility (the lion’s share) on retailers to ensure their data privacy & security. At some point in every retail transaction the issue of trust arises – usually implicitly but more and more explicitly as data breaches and less-than-transparent practices become more frequent and more apparent. The net effect of that is an astonishing erosion of the most foundational value of any customer / vendor relationship: trust
So, what do your customers expect? According to Edelman’s 2021 Trust Barometer, businesses are expected to shore up the trust gap created by the combined effects of political discord, biased media, and heightened anxiety related to COVID personal and economic hardships. That’s a big burden for corporations to bear. The need for brands to embrace a trust-based approach to customer interactions has never been more apparent.
What Does a Trust-based Approach Look Like?
- It’s based on an informed, equitable value exchange.
- It’s based on engagement mechanisms that demonstrate understanding, empathy, and care.
- It’s based on a longer-term timeframe than the immediate transaction.
The power dynamic has shifted. Consumers have more control over the transactional “conversation” than at any point in history. They are more informed. They are more fickle. They are more entitled. And they know you want their business and data. This new dynamic requires brands to re-configure both their expectations and their processes to accommodate customers who are demanding – and promiscuous in their shopping habits.
An Informed, Equitable Value Exchange
The issue is not a quantity issue. Retailers need to re-orient themselves to a data-gathering process that enhances the relationship – and that’s very different from a typical “vacuum-everything-up” approach.
- What if customers gave you their information willingly?
- What would happen if brands asked for consumers’ help to make the relationship more productive – richer, as it were?
- How would the brand/consumer relationship change?
- And how useful would the data that came from such an exchange actually be?
Engagement Mechanisms that Demonstrate Understanding
Those questions are behind a growing trend toward fully-permissioned or “consented” data capture methods that are having a radical effect on everything from top-of-funnel processes to re-configured customer-lifetime-value calculations.
The data utility factor from customer information that has been gained transparently is far greater than traditionally captured data. It is derived from an ongoing, trust-based “conversation” with the customer – meeting their expectations every step of the way.
– Michael D. Fisher, CEO, 3radical
These two screen-captures were part of a series of gamified engagement mechanics that were delivered to customers after the initial sale and before any other offer or ask was made. The sequence took the focus off of the transaction and onto the customer in a fun and potentially rewarding way. The brand, in this case, was able to gain deeper levels of customer insight:
- Social Channel Preferences
- Demographics (Gender / Age Band)
- Prize Preferences
- Customer Referrals
The brand was also able to increase engagement “stickiness” to over 400 days – an improvement in that metric of more than 300% over previous efforts.
Marketing Timelines that Go Beyond the Transaction
The popular marketing definition of “personalization” often translates into methods of customer identification that allow for targeted messaging based on some set of purchase-intent criteria. But empathy goes beyond that into areas that are much more relational than they are transactional, requiring an approach that has been calibrated to quite literally put the customer first. Nurture the relationship and the brand affinity follows. Nurture brand affinity and transactional metrics improve across the board.
Count on the fact that breaches will increase and the buying public will become even more aware of – and sensitive to – issues of trust with the brands who are vying for their spend.
Keep in mind, trust can be built. It can be earned. In some cases, it can even be earned back. It takes radical authenticity and it takes an approach to customer interaction that is both transparent and engaging.