Intelligent Use of Data Earns Consumer Trust

by Jim Berkowitz on May 19, 2010

Here are several excerpts from an article, Intelligent Use of Data Earns Consumer Trust, by Lou Cooper who notes that:  “as the lines between marketing and service blur, brands must use both behavioral and volunteered data to deliver communications that meet consumer demands.” Check out the complete source article for more:

The Direct Marketing Association’s (DMA) Robert Keitch warns that organizations that fail to treat consumer data with the respect and sensitivity that it deserves risk negative media coverage, losing customers, damage to their brand and significant fines imposed by regulators.

Large-scale government data losses over the last couple of years, together with the threat of identity fraud, have focused attention on the need to protect personal details more effectively. According to the fast.MAP/DMA Marketing-GAP Tracking Study, consumers are increasingly unwilling to agree to third-party contact and a quarter now opt out of existing-relationship company contact…

However, data used in the right way by companies to target consumers with timely and relevant direct marketing can be an invaluable tool. According to research on consumer attitudes to marketing by Experian, 83% of those surveyed express a preference for “companies that treat me as an individual and try to understand my needs”.

The key to getting consumer data right is to ensure a fair exchange between brand and customers, says Richard Madden, planning director at agency Kitcatt Nohr Alexander Shaw. “Rather than just asking customers for their personal information, companies must explain exactly how they’re going to use it and, if possible, give customers direct benefit back,” he advises.

Madden predicts that it will soon become an element of best practice for companies to talk about the security proportions around any data they use, with assurances to consumers that their data will never leave the contry or be shared with another organization.

Getting consumers to trust and engage with your brand is no easy task, but for those that achieve it, the rewards are high. Madden cites Marks & Spencer and John Lewis as two of the best in the field.

Although companies are beginning to think about whether they should implement innovative techniques such as volunteered personal information (VPI) – where people declare their interest in certain services and companies tender for their business – it seems that many brands are still failing to use basic DM data correctly.

While brands might be struggling with the basics, can using VPI really start a new phase of direct marketing? Madden says: “I think that using a combination of behavioral data and volunteered data can help deliver marketing that is indistinguishable from service.”

But the right approach is crucial, he warns: “You don’t just ask for VPI, just like you don’t just ask for people’s inside leg measurements. You observe what they’re doing with your brand, how they’re interacting with it and you introduce a piece of VPI gathering content at a relevant point.”

The softly, softly approach is equally prudent when it comes to behavioral data warns Chris Bibby, Direct Marketing and CRM Director at Virgin Media. He says that coming across as too like Big Brother will not be popular, so whenever new data services are introduced, it must be obvious to customers that this adds value for them rather than just the business.

Aside from using new methods like VPI, brands can also make sure they use data in a more effective way by carrying out better segmentation.

By sending someone an email, for example, and monitoring what time of the day someone opens it, you might deduce that this may be a good time to send other direct communication, or maybe even phone that person because you know that they’re at their desk or back home from work.  “Many organizations have this kind of data, but fail to pull it from the different silos into one place”, adds Kennedy. “Every interaction gives off data and that can be used to figure out when is the best time to get back to that person with a different communication.”

Virgin Media’s Bibby sums up: “Data is the critical component of any profitable CRM or direct marketing campaign and you can only be successful, targeted and personalized if you have a really rich source of data to do that with.”

This means that for brands to get that data, their customers must trust them. With more new techniques than ever now promising numerous ways to reach people with marketing, DM specialists must prioritize good data management principles to create truly innovative, consumer-centric campaigns.

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