If you want to know the state of the industry – follow the money. Marketers are spending more on data-driven marketing, with 38.4% percent of panelists reporting an increase in spending this year, according to the latest DMA Quarterly Business Review from Winterberry Group. Looking ahead, marketers intend to continue to invest, with nearly half, 43.9 percent of panelists, saying they expect their organization’s spending on DDM to increase in the months ahead, while 41.7 percent say spending will remain constant.
I’d like to see more of that investment purposed specifically toward strengthening trust – which should be easy because trust is built from the same kinds of practices that marketers use to build relationships. The difference is to place emphasis on the reciprocal actions between consumer and brand.
These might include:
- Permission. The basis for all trusted relationships, but only the beginning. Trust must be earned with each encounter.
- Notice. Ensuring transparency around how marketers will use data and provide benefits.
- Choice. A preference center can be a great tool, but it’s not the only way to engage customers. There are many touch points in a member journey that would benefit from a reminder or “rejoin” permission grant.
- Employee Training. The treatment of customers in a store, over the phone and via Twitter matter. Make sure that everyone is trained, sensitive and empowered to respect customers.
- Data Governance. Your entire marketing team should be trained in data governance and stewardship, to ensure that you have the right practices for your business to protect and responsibly use consumer data. The cost to your reputation from a breach or segmentation mistake can be onerous.
From all the behavioral data we have, it’s clear that consumers WANT to interact with brands that they love and do business with – but they also want the chance to choose their preferences and channels. So the question is not really, “Do consumers tend to be loyal,” but “How can I make my program and brand so interesting, trustworthy and valuable that customers include me in their brand relationships?”
Too many marketers trust that they have trust, without actively building trust. A recent Teradata CMO study found that only 18% of global marketers say they have a holistic view of their customers. That is a real opportunity for the rest of us. While marketers are not yet there, consumers are already there. Consumers use data in all aspects of their lives to establish and build relationships.
Developing customer relationships is like going through a “dating period.” Anytime you decide to connect with another person, you start to collect third-party data. You talk to people who know the individual to get a better idea of their background, personality, and interests. If you decide that person is someone you want to meet, you may accumulate more data to get a bigger picture. You also ask that person directly for information. With loyalty programs, as in life, data is the foundation of the relationship, but it’s the value you glean from the personal interaction that is the true gold.
All this data-driven activity is generating some pretty impressive results in our economy – more than $156 billion and 675,000 jobs in 2012, according to the independent “Value of Data” study recently completed by the Data-Driven Marketing Institute, which is the think tank of DMA.
Our entire technology and marketing community – which absolutely relies on data — is dealing with a crisis of confidence right now. Consumers hear about data breaches and government spying and they think that marketers are doing something terrible with their data. All of that washes over to our businesses.
Let’s not be careless here. Access to consumer data is a privilege. And marketers are facing ferocious legislative threats – like no other time in recent history. The White House “big data” report this week that includes a renewed call for national privacy regulation is just the latest. We have to protect the data or we are going to lose the freedom to use it.
We have to start by making sure we are meeting our own industry self-regulation standards, and ensure responsible use of all data in our own companies. That’s job one for Data Stewardship – and a foundation to building trust.
Consumer Trust Checklist
- Audit your practices against the DMA Ethical Guidelines (thedma.org/compliance)
- Train your team in data governance and talk to suppliers.
- Start a conversation about data stewardship internally. “Lean in” and lead.
- Ensure your data privacy and security readiness.
- Increase transparency around your practices for consumer notice & choice.
Are you building trust purposefully, or just trusting that it will happen on its own? Let us know in the comments section below