Retail's Data Conundrum: Think Bespoke, Not Big Brother

9/15/2015
Let's state the obvious: data-sharing is a controversial topic in the U.S. today.
As companies become more skilled in applying data analytics to their business models, they are asking consumers for more and more of it. For companies like Netflix, this is an easy ask. In fact, most people probably can't even count how often they share data when they repeatedly watch their favorite TV show or rate that really bad movie sequel. Unfortunately, when it comes to brands in the retail world, asking consumers to share data perpetuates an impression it will only be used to squeeze more sales. The end result? Consumers want to hold that data even closer.

So how do we solve today's data conundrum – a tug-of-war between brands eager for data-driven insights, and consumers weary of those companies' intentions? Will retail consumers ever really be willing to share their data?

The answer, surprisingly, is yes. In [24]7's recent Customer Engagement Index, we found that 7 out of every 10 respondents said that they were willing to share some form of data to improve their experience.  What does this tell us? If retailers want to create the best possible customer experience, they need to start by painting a more mutually beneficial picture of data-sharing – one that actually enhances a customer's engagement with their brand of choice.

Shaking data-sharing's bad reputation
Before retailers can encourage customers to share more data, they must first dispel the negative reputation clouding the potential benefits of data sharing. With the rise of email lists, targeted advertising and unsolicited spam, most customers today will tell you that the number one reason they don't want to share their data is that they don't want to be inundated with unwanted offers.
To reassure consumers that their data is being put to valuable use, brands need to be transparent about how and when they are using customer data. One way this can be done is by targeting their data-sharing efforts towards more frequent and loyal customers. These are the customers that already "buy-in” to a brand and will be more open to engaging with that company in order to get the best possible experience out of that brand.

When it comes to new customers, brands should tread lightly and rely more heavily on their self-service resources to ensure new customers enjoy a positive experience. These resources can leverage customer data from past interactions and help prevent first-time buyers from feeling overwhelmed with requests to share their data. Once a retailer has earned the trust of these new customers through self-service resources, shoppers will be open to sharing data to create a more personalized relationship with a brand. 

The key to data sharing – show your work!
The solution to today's data conundrum dates back to what every one of my high school teachers used to repeat time and again: "you need to show your work!” When it comes to encouraging your customers to share their data, this advice rings true. The reason companies such as Netflix or Amazon are able to gather as much data as they do from consumers is that they show the direct benefit. Netflix is the best example of this -- you can see immediately how your rating of a show or movie earns you more personalized, tailored recommendations. By awarding five stars to The Notebook, Netflix understands your penchant for sappy love stories and introduces you to other must-see romance titles for your next movie binge. 

According to our Customer Engagement Index, this type of service is setting the standard for all businesses. In fact, of those surveyed, 53% noted that customer service should be effortless and fast, while 29% also noted that anticipating a customer's needs is a top attribute for great customer service. This makes the formula for data-sharing easy; show your consumers how sharing their data will help your brand deliver a richer experience for them.

As businesses look to build their digital customer tool set through smart virtual agents and self-service resources, they understand that data is critical. However, their customers need to understand this as well. Highlighting that pathway in the same way as Netflix or Amazon will enable your consumers to see data sharing as a way to build a mutual and personal relationship with their favorite brand. Instead of being a retailer a customer browses through for clothes, your company can become a resource that shoppers rely on to help them spot the best new styles for their unique tastes. In return, companies are able to aggregate thousands of data files from dedicated customers in order to provide the optimal customer experience and even trace key findings back to their overall business strategy. 

And the benefits of data sharing don't end there. It can even help guide customers through an informed and efficient purchasing experience. Let's take the example of a shopper browsing skirts online, but unsure about sizing. They could start by asking their question – in natural, everyday language – to a virtual agent on a store's website or mobile app to easily access a sizing guide. And if that same customer wanted to try the skirt on in-store, they could seamlessly chat with an agent, who would understand the context of the customer's inquiry as well as key customer data – such as where they live, the sizes they usually purchase and what locations they most often visit- to help guide that customer to the most convenient store location carrying a skirt in that customer's size. Data-sharing can make customer interactions predictive and personalized, providing a low-effort customer experience that builds trust and loyalty.

The key to solving the data conundrum is to create a more in-depth and personalized relationship with every single customer. As digital and mobile capabilities continue to expand, consumers will gain more control of what brands they interact with, as well as when and how. Leveraging new ways to connect and establish a personalized, easy and efficient relationship with consumers will be the key for brands who wish to stay relevant in this ever-changing market. 


Kathy Juve is CMO of [24]7, a company that provides customer engagement solutions for services and sales.
X
This ad will auto-close in 10 seconds