My colleague Helen recently blogged about the results of an interesting Webhelp survey on personalisation in the banking industry where we found that customers are happier sharing their personal data with companies that offer a high level of customer service. Customers generally don’t trust brands to use their personal data responsibly, so this ability to create a more trusted environment will be a key step for companies wanting to offer a more personalised service.
How data is used, stored, and analysed is becoming a hot topic. Credit rating company Experian believes that 90% of all the data in the world today has been created in the last two years alone. We are generating more and more data and struggling to convert it into useful information.
Recent research by the Chartered Institute of Marketing in the UK suggests that the real problem is that people just don’t understand how brands will use their data. They found that 67% of customers would be willing to share more personal data with brands if the companies were more transparent and open about how it will be used. This connects closely to our own Webhelp research findings that showed customers with a positive experience of a brand are more willing to share their data with that company.
At the heart of the problem is a corporate tendency to ask for forgiveness rather than permission. Companies have collected data on customers for years without ever explaining how they are analysing it and when hackers strike all they can do is apologise for holding so much personal information on their servers.
Customer insights are becoming a clear source of competitive differentiation. The more you know about your customer, the easier it is to cross-sell and upsell additional products without using the blunt force of traditional sales. If you already know what your customer likes and what they are looking for today then suggesting ideas is not a sales pitch – its assistance and creates a great customer experience.
The volume of data around us is about to explode further as the Internet of Things moves from theory to reality. Smart cars that can self-diagnose engine problems by communicating with their manufacturer are already here. Homes are rapidly being equipped with Google Home and the Amazon Echo. We are personally generating and using more data than ever before.
In some cases there are spin-off benefits. Ride-sharing service Uber shares journey information with the local government in Boston, helping the city to more effectively plan public transportation and prioritise road maintenance plans. Wearable devices, like the fitbit, are encouraging more people than ever to undertake physical exercise and creating vast records of every step we take.
A detailed study from 2015 published in the Harvard Business Review found that most people are only vaguely aware of how or where they are giving away their personal information. Only 25% of people realised that their phone is constantly publishing their location, only 27% of people appreciated that their list of friends on social networks may have value, and only 23% realised that every Google search they make is stored and is used to improve future searches.
In general, people are not very aware of how brands are collecting and using their data, but they are very concerned about how their data is used. The HBR study found that 97% of people are concerned that brands might misuse their data so it comes as no surprise that when brands explicitly ask customers to share their data, customers are often unwilling.
As our own study found, the real answer is to build trust in the brand. A brand that offers a great experience with excellent customer service is automatically more trusted to look after personal data. With data becoming such an important business differentiator today this cannot be ignored. Creating a great customer experience is no longer just about generating sales and loyalty – it may in fact be the only way that customers are prepared to do business with your brand at all. I’d love to hear what you think of our research and what other topics you would like to hear about this year? Leave a comment below and let me know, or get in touch on LinkedIn.