How does one reconcile the need to collect more and more data about the consumer and not misappropriate their trust in the brand?
According to a survey conducted by Forbes Insights, 93% of marketing directors believe that collecting and analyzing consumer data is an important source of competitive advantage. Meanwhile, in a study by the Chartered Institute of Marketing, quoted by the BBC, 92% of customers declared that they do not understand how companies use their data, while 57% do not believe that they do so responsibly.
At first glance, it looks like an obvious conflict of interest: companies want to acquire data, but customers do not trust them. So the question arises: is there any magical way for both sides to be satisfied? Or perhaps it is simpler than it seems?
We see how important it has become for companies to obtain customer data on a daily basis in many projects. And while it is possible to argue about the usefulness of this or other data in a specific situation, we generally agree as an industry that “data” is the basis of marketing: today and tomorrow. Especially in today’s pandemic times, when the focus in personalizing the customer approach is shifting from direct service to online.
THE PARADOX OF PRIVACY
What is perhaps more interesting is the attitude of the consumer towards the data, who declares one thing and does something else. This phenomenon of inconsistency of declarations and behavior in the consumer approach to privacy has even gained a special name. It is called The Privacy Paradox. What does it entail?
On the one hand, after the loud scandals related to Cambridge Analytica or the leaking of customer data from another bank, the declared trust in commercial companies as data custodians is low and the willingness to provide them with data has decreased in recent years.
WHERE DO THEY GET MY DATA?
What are the effects? Of course, we are flooded with messages from e-mails, text messages to display advertisements. The problem is that it is often the communication from brands that we do not consider at all and we are “outside the target”.
Here we come to the first conclusion that the use of the so-called “3rd party data” is a double-edged sword: when used well, it allows us to reach a new audience, but also, in some cases, it can be a source of feeling in many customers that they are harassed by inadequate communication, which immediately raises the question “where do they get my data? Although this is probably the result of unknowingly giving consent, it does not change the fact that a brand that “bullies” a consumer with such communication immediately loses confidence in their eyes (damaging the entire industry along the way).
The fact that it is worth taking care of the quality of this data is evidenced by the fact that according to the Direct Marketing Association’s research, the percentage of companies which commissioned the audit of the so-called “3rd party data” between 2017 and 2018 increased from 21% to 50%.
WHEN IS THE CONSUMER WILLING TO PROVIDE INFORMATION THEMSELVES?
How, then, can we collect data in such a way that the customer is satisfied that they are sharing it and not treating it as a necessary evil? It is worth going through a few examples that illustrate different practices.
Beginning with the most common ones, the customer’s data can be treated a bit as an element of exchange – a bit “commercially”. In this case, the company offers special discounts, free products and other privileges in exchange for the data.
However, there are more creative methods.
The first example is the May 2019 campaign “Traffic jam Whopper” by Burger King to popularize the brand’s mobile application. It took place in Mexico City. As Mexico City is the most congested place in the world, the home delivery of food doomed to failure (as a side note, in the times of the pandemic, this is becoming an increasingly important area of restaurant operations). However, Burger King wanted to deliver food to customers. And they did it… when they were standing in traffic jams and were just under 3 km from a particular restaurant belonging to the chain. The sight of scooters with food sneaking between standing cars became an everyday occurrence. To order such a meal delivered straight to the car, you had to install an application and then make your location available. What is interesting, this campaign used roadside LED screens, which provided the expected time of arrival to a given driver on an ongoing basis, indicating their name and type of car. The campaign turned out to be a success (44 time increase in application downloads, which made it the most popular application in the category). But most importantly, this example shows that ingenious marketing activities and hitting the real consumer need effectively reduce the customer’s fear of data transfer.
The second example is AXA, an insurance company that has been selling insurance since 2018, which cross-referenced the data on air tickets purchased by the customer together with information from airports on possible flight delays. When it was already known during the flight that the plane was going to be delayed or that it was going to depart late, customers were compensated by AXA in real time. Without the formalities necessary in a standard compensation procedure. Bearing the prospect of such a convenience in mind, wouldn’t it just be better to share our data with AXA?
DMP IN MERCEDES-BENZ, A HOLISTIC APPROACH TO DATA
The automotive industry is one of the most engaging. A car is a purchase for years, the cost is high and the decision-making process is long. Therefore, in this category, trust in the brand is crucial. In this context working with consumer data is a big challenge.
It is worth noting that the automotive industry is one of the ones that has been most affected by COVID-19 and with the support of the customer the decision making process aims at maximizing non-contact forms of communication. Data-based personalization is an invaluable value in this context.
In the DMP (Data Management Platform) created jointly by Daimler AG and Publicis Groupe, the data management process is initiated from the first consumer visit to the website.
By using artificial intelligence and special algorithms, the user is provided with behavior-adapted content that supports them in the decision making path when selecting a car, resulting in an increased conversion rate.
Two practical examples:
- The client was on the website but did not complete the model configuration. When they return to the site a few days later, this unfinished configuration will still be there for them to complete and then to send it to the dealer. We know from the data that on the European markets the configuration is continued by about 1/3 of the customers who return to the site, which proves that this form of data collection is useful for consumers.
- The customer moves around the site, but despite active use of the site, they do not go through to signing up for a test drive. Using a special algorithm based on behavioral patterns, the website itself will offer them a test drive when it considers that their behavior is ready for it.
Such solutions support not only the effectiveness of the website itself, but also have an impact on external communication, which corresponds to the customer’s behavior on the website (and vice versa – behavior outside the website influences what the customer sees on the website itself).
The data in Mercedes-Benz is also a Mercedes ME application. In Poland, almost every new customer has it installed immediately on their smartphone after leaving the showroom. It is a good example of the symmetrical distribution of benefits. On the one hand, the customer receives a tool which, for example, allows them to close their car windows remotely, for example when it begins to rain and when they forgot to do so. On the other hand, the company receives an invaluable source of insight taken from everyday life. Example of use? When it was debated whether the Class C should be positioned as a sports car, it was discovered that barely 3% of the users of this model ever turned on the “Sport” mode, which allowed Mercedes to base the campaign on a different value.
Ultimately, in the coming months the platform will be complemented by other data sources such as Social Media, CRM or Search. This will allow the consumer to deliver the most personalized message possible, based on their behavior as well as demographics and psychography, as illustrated by the diagram below:
JAROSŁAW MORAWSKI, Digital Marketing, Mercedes-Benz Cars
DMP helps us to take digital activities to a higher level of sophistication. With an integrated system for analyzing data from different communication channels, we can plan “on-site” and “off-site” communication even better. We also gain new opportunities to optimize lead generation on the web. This gives us high hopes for this tool.
LENA KONSTANCIAK, Data Strategist Region Team Lead, Publicis Emil
The DMP platform for Mercedes-Benz has been implemented parallelly on several European markets. In this way, we gain the synergy effect in achieving the goals not only locally, but also for the entire region. This is due to the close cooperation of DMP experts from different countries, who exchange best practices on a given market.
SUMMARY, OR 3 THINGS TO REMEMBER
Originally, digital marketing was supposed to be a breakthrough in deepening the brand-consumer relationship, but in practice, it often caused customers to distance themselves from brands, especially those that were too aggressive and incompetent in their data. So what should be done so that our approach to data does not result in a loss of trust in the brand?
- Verify the sources of “third party data” – do we fully control how and to whom the messages concerning our brand reach?
- Develop and maintain “first party data” – our own “first-hand” data – generate marketing activities that will make customers willing to share data themselves.
- Think of an integrated approach to data management, just like using tools like DMP.