The debate regarding data privacy has been heated. However, missing from much of the conversation is this critical point: How do people feel about privacy of their data if they trust the brand and receive meaningful value in exchange for sharing their B2B or B2C information?
Empowered Consumers And Disappointing Marketers
Never in the history of marketing have consumers (B2B and B2C) demanded so much from marketers. At the top of this list are demands for increasingly personalized communications, experiences, and offers.
Marketers are failing to meet this very reasonable expectation. Even with the power of big data, we still resort to traditional, albeit more sophisticated, “spray and pray” blasts of generic marketing. Even on a good day, 97 percent of what marketers blast gets thrown away or deleted.
According to the DMA's 2012 Response Rate Report:
- Average direct mail response rates are 3.4 percent to a house list, and 1.8 percent to a rented list.
- Average email response rates are 0.12 percent to a house list, and 0.03 percent to a rented list
We have to do better.
Consumer’s Willingness To Share Information
Important findings from research conducted by our firm, Ernan Roman Direct Marketing, indicate that consumers recognize they have to help marketers get it right. Results from more than 10,000 hours of in-depth Voice of Customer (VoC) research interviews conducted for thought leaders such as MassMutual, IBM, Symantec, QVC, Cross Country Home Services, and Songza provide powerful insights regarding how marketers can transform their marketing.
- Consumers, B2B and B2C, recognize that to receive or access increasingly relevant information they must share increasing amounts of information regarding their preferences.
- If they trust the brand and see a useful value proposition, they will opt in to sharing increasingly detailed personal preference information in exchange for the brand's promise to deliver relevant information and offers.
- This sentiment emerged with equal frequency and conviction among B2B and B2C respondents.
- This was also expressed equally strongly by both prospects and customers.
These findings have emerged so consistently across numerous VoC research efforts that we call this the Reciprocity of Value Equation. Another powerful takeaway is that this reframes data privacy concerns. Consumers, B2B and B2C, recognize that to receive or access increasingly relevant information they must share increasing amounts of information regarding their preferences.
This opt-in preference information will constantly change, grow, and be enriched through knowledgeable two-way interactions with consumers.
As a result of these interactions, consumers are more likely to open, engage with, and respond to communications and offers. This customer-driven information exchange results in uniquely accurate databases that consistently achieve 25 percent to 50 percent increases in revenue.
Similar findings emerged from a June 2013 Infosys Study, which noted that consumers overwhelmingly will share personal information to get better service; however, they are very discerning about how they share. The study showed that a wide majority of consumers (78 percent) agree they would be more likely to purchase from a retailer again if they provided offers targeted to their interests, wants, or needs.
Unique Opportunity To Reframe The Discussion Of Privacy
Traditionally, B2B and B2C consumers were passive recipients of push marketing. They had no actionable avenues to shape experience. This led to frustrations on both the part of the marketers who could only take best guesses regarding offers, and for consumers who received irrelevant messaging and low-value sales interactions.
Extremely accurate data is required for delivering competitively differentiating and personalized experiences. The most powerful data to drive this level of personalization is data that customers or prospects choose to share with you. But in this environment of increasing privacy concerns, they will only share this depth of information in exchange for significantly improved offers, communications, and experiences.
The challenge and opportunity for marketers is to earn the right to engage your customers and prospects in a Reciprocity of Value relationship where they will provide increasing amounts of personal or business information in exchange for trusting you to deliver significantly improved customer experiences.
Results You Can Expect
After implementing an opt-in preference-driven engagement strategy based on VoC research and Reciprocity of Value, Microsoft achieved:
- Opt-in rates up to 95 percent
- Open rates greater than 50 percent
- Response rates performing in the double-digits
- Revenue two times greater than the control group
And per Kris Gates, VP marketing, consumer experience, at MassMutual's Retirement Services Division, “Findings from recent Voice of Customer (VoC) research indicated that our customers wanted communications driven by their preferences and interests. We used the rollout of our new educational video series to measure the difference in response between mass emails to an entire list versus preference-driven offers to those who had opted in and told us their preferences and interests.”
Results from customers who opted in to receive information versus the mass email population:
- 94 percent higher open rates
- 1,062 percent higher video views
- 100 percent deliverability
- Zero unsubscribes
Takeaways To Help You Achieve Reciprocity Of Value
- Be humble. Acknowledge what you don’t know about how your customers define engagement and the Reciprocity of Value Equation with your company. Then...ask them for their voice of customer guidance.
- Create opt-in preference databases to drive true personalization of communications and offers.
- Achieve frictionless, high-value, engagement across every medium in the multichannel mix.
- Deliver high quality customer service in every channel. Marketing has to take responsibility.
- Make customer listening a part of every functional area, not just marketing.
- Do right by the customer, even if it hurts short-term revenue. You’ll win in the long run--and probably the short term.
- Increase the allocation of resources for retention and reducing churn versus a heavy focus on acquisition.
The privacy versus data acquisition discussion will most likely never go away. The challenge for marketers is to transform the data discussion into business practices focusing on how reciprocity of value drives the way marketers engage with consumers.