THE BLOG

Why You Need Human Data For Real Customer Engagement

02/26/2015 05:58 pm ET | Updated Apr 28, 2015

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Article by Ernan Roman
Featured on Forbes.com

A cataclysmic shift is occurring in BtoB and BtoC marketing. Customers are ignoring generic messaging and demanding personalized and relevant communications based on their individual preferences.

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Based on research findings, the good news is that customers and prospects are willing to provide personal or business information in exchange for more personalized offers, communications and experiences.

Marketers must meet these consumer demands by transitioning from impersonal transaction-based marketing to highly personalized, preference-based, experiences.

The Reciprocity of Value Equation

A profound finding has emerged from more than 12,000 hours of Voice of Customer (VoC) research our firm has conducted for companies including MassMutual, IBM, Norton AntiVirus, QVC, NBC, Microsoft and Songza. Notwithstanding privacy concerns, BtoB and BtoC customers are willing to provide detailed information in exchange for increased value and relevance.

To satisfy these demands, marketers must adopt transformational strategies that recognize the value of human data; true personalization of communications, offers and experiences driven by deep opt-in individual preference information provided by customers in exchange for receiving unprecedented levels of preference-driven personalization.

We call this the Reciprocity of Value Equation.

Customer Reciprocity: Recognition by customers that to receive more relevant and personalized communications and offers, they need to provide marketers with personal or business preference information.

Plus

Business Reciprocity: Recognition by marketers that they have to provide significantly more personalized communications and offers. To be truly personalized these have to be based on more than just transactional, overlay and inferential data.

Plus

"Human Data:" BtoB or BtoC opt-in self-profiled information regarding key issues, needs and expectations; decision-making process, messaging and media preferences; self-described personality types/attitudes/life stages.

Equals

Customer Experience Transformation.

But, Marketers Have to Earn the Right to Request Human Data

By earning trust through value propositions that motivate customers to opt-in and provide deep preference information, marketers will create a high quality database of responsive customers who truly want your messages.

Based on the VoC research findings, customers (BtoB and BtoC) confirmed that human data has to be earned by going through specific steps that comprise a Pyramid of Trust:

  • Do what you promised: Deliver on your fundamental brand promise.
  • Treat me fairly: Fair pricing and customer service policies.
  • Protect my information: Explain the reasons for the opt-in information requests and assure me of the privacy and safety of my data.
  • Improve my experiences: Use my stated preferences and aversions, to significantly improve my experiences.

Gilt Earns Trust and Engagement

Gilt, a top internet retailer, has used high levels of personalization to deliver relevance and drive engagement for both new and existing customers. Results of these efforts have included increased orders, decreased email and mobile push notification unsubscribe rates and boosted higher repeat-purchase rates.

According to Welington Fonseca, VP of marketing and digital analytics, "Gilt's commitment to a personalized experience is evident when customers return to the home page of the web site or mobile app. Sales within the store (men, women, kids, home) with the highest affinity to a consumer's past behavior and preferences (browse, purchase, favorite brands, wish list) are presented at the top of their home page with all other sales ranked according to relevance based on previous shopping behavior and collaborative filtering."

Another example of personalization is "Your Personal Sale," which displays the most relevant brands and products based on shopping patterns and self-stated preferences and provide Gilt with another way to interact with the customer to understand preferences in order to further refine their personalization algorithm.

According to Fonseca, "All communication is personalized, with the company sending [more than] 2,500 versions of personalized emails and mobile push notifications on a daily basis, eight times per week. Results have been a double-digit increase in orders and reduction in email and mobile push notification unsubscribes."

Five Takeaways:

  1. Differentiate your business by providing highly personalized communications, offers and experiences.
  2. True personalization must be based on preference-based "human data," not just traditional inferred or transactional data.
  3. The right to ask for increasingly deep levels of preference-based information is not a "given." It must be earned.
  4. Deliver clear and obvious value based on preference information.
  5. Customers see reciprocity as a valuable exchange of information that improves their experience.

Ernan Roman is president of ERDM.
ERDM conducts Voice of Customer (VoC) research to identify high impact Customer Experience strategies.
Inducted into the DMA Marketing Hall of Fame due to results clients achieve with ERDM's VoC research driven strategies.
Clients include IBM, MassMutual, Microsoft, NortonAntivirus, QVC and NBC.
Roman is the author of Voice of the Customer Marketing and of the Huffington Post published blog, Ernan's Insights on Marketing Best Practices.

Named by the Online Marketing Institute as one of the "2014 Top 40 Digital Luminaries" and by Crain's BtoB Magazine as one of the "100 most influential people in Business Marketing".
www.erdm.com
ernan@erdm.com