Privacy-Centric Vs. Personalized Customer Experiences: The New Balancing Act for CX
There are two big conversations happening about customer experience right now.
There’s one conversation about data privacy being most important to customers. There is another conversation about marketing personalization being most important.
When you think about it, personalization often requires companies to be in touch with contextual customer data—the type of data customers may not want to share.
And that got me to thinking.
There’s a business case for both sides. But do we have a conflict? And if we do, then how can we expect the business debate to unfold alongside privacy legislation and calls for personalized experiences?
Here are some highlights from our LinkedIn Live chat.
What is marketing personalization? Why should customer experience professionals care about marketing personalization?
Shalini: Customers have more choices than ever. They want convenience and transparency. They want to be known as an individual. For brands to stand out right now, they must deliver the right information at the right time in the right channels to their customers.
More than 70% of customers will engage only with personalized marketing. So, it’s critical to personalize. But as a business leader, you have to ask yourself, how are you using customer data to create those personalized marketing messages, in a consented way? Personalized marketing is critical, but it is important to be mindful with how you use the data.
Stephanie: Personalization increases sales conversions! No business can survive without sales. Some personalized experiences require the use of contextual customer data to influence those conversions. This is where we are now hearing the term “CDP” used in more frequently in business conversations.
What is CDP? Why should customer experience professionals care?
Ratul: CDP stands for “customer data platform.” This is a central location where a business stores the “golden record” for customers. Businesses have so much data on their customers right now—first-party, second-party, and third-party data that needs to come together in a central place. With the rise of data privacy regulations, you need to understand a customer’s consent and the purpose of data. Is it contractual, legal, or about their warranty? CDP helps you understand your customers holistically. CDP helps to connect the dots.
Stephanie: Business models have been built in recent years on personalization and contextual data. Uber and Lyft, for example, build geolocation right into their experiences. Geolocation data helps riders find drivers! But this level of contextual data and personalized experiences doesn’t necessarily apply to all sectors. This makes me wonder…
Are customer experience leaders walking into a privacy vs. personalization debate?
Ratul: If the business believes customers are important, then the conversation flows around the customer. Think about the conversation that could be had at the senior leadership table. GDPR allowed customers to query a company to ask what data companies have on them. So, the conversation could be about creating a portal where any customer who wants to access their data can see it and control it—to define their experience. This is what digital-first companies are doing. These are positive conversations.
Shalini: The pandemic has challenged us. We went from being able to see our customers at physical events to just digital. Now we need to connect in virtual, consented ways. Don’t be creepy! That can lead to negative sentiment which can wind up on social media. Be helpful to the customer in the right moment. Nurture the customer, rather than sell to them.
Trust is the currency of your business. Customers can be won or lost in an instant. Create a connection with the customer in the context of what the customer is trying to do. Let the customer lead! -Shalini Mitha, SAP
How far can brands go in using contextual customer data?
Shalini: There are boundaries! Be helpful. Help a customer solve a challenge. Make their life easier. Trust is the currency of your business. Customers can be won or lost in an instant. Create a connection with the customer in the context of what the customer is trying to do. Let the customer lead!
Ratul: Everyone can do a better job of understanding their customers. Have all of your customer data in one place. Listen to all the signals you have. Bridge the digital and physical worlds. Work with legal, marketing, and data privacy teams to craft policies that honor customers. Don’t tell customers you’re using their data for personalization because that doesn’t tell anybody anything! Be specific. Humanize data policies and the reasons why you’re collecting data.
Shalini: Now, companies must recreate relationships in the digital world. The boundaries are not the same as when you are with customers in person. All companies are struggling with breaking through the noise right now. This is when personalization becomes key, but within boundaries.
Thanks to Shalini and Ratul, and to the SAP team behind the scenes, for opening the conversation to the customer experience community.