Digital marketers are facing a conundrum. They are expected to offer more personalized and improved experiences to customers while using as little personal data as possible.
Over the last few years, research by Salesforce and others points to personalization being key to improved customer experience and conversion rates. Yet, at the same time, Gartner also expects that personalization efforts will undergo significant change and even be abandoned within a few years.
Brands struggle with managing customer data in line with both legal as well as consumer demands and are not seeing enough ROI from those efforts. Moreover, the sheer amounts of customer data are beginning to overwhelm companies and hamper their marketing efforts.
And let’s not forget that the last couple of years have seen private data being repeatedly exposed and exploited on Facebook and other networks. As a result, individuals have grown suspicious of the use of their data and demand greater accountability from social media networks and businesses.
So is this an “either/or” choice between data privacy and personalization or is a “yes, and” approach possible?
Keep reading to find out how you can balance personalization without breaching your customers’ fundamental right to privacy.
The privacy paradox.
The privacy paradox refers to the mismatch between online users’ stated views and intentions and their actual behaviors. Increasingly, consumers are wary of the ways in which their data is being handled by brands. At the same time, they are willing to provide their data if they are likely to get something in return, such as a more personalized experience.
Personalization is an important driver of increases in sales, brand loyalty, and customer engagement. According to Twilio Segment’s 2021 report, 60% of consumers say that they will likely become repeat buyers after a personalized shopping experience. Moreover, according to the 2020 Salesforce State of the Connected Customer report, 52% of customers expect offers to always be personalized.
At the same time, the Pew Research Center found that a majority of people feel they have very little control over their data and are concerned about how it is being used. They also think that the risks associated with data collection outweigh the benefits.
So what can companies make of this? Is there a way out of the paradox?
The challenges and opportunities that businesses are facing.
Not only are consumers signaling that they want less of their data to be disclosed and used, but big tech companies and governments are also introducing more significant data privacy requirements.
This includes developments such as Google’s decision to phase out third-party cookies. It also includes the introduction of the California Consumer Privacy Act (CCPA) and the General Personal Data Protection Law in Brazil following the introduction of the GDPR in the EU.
But it’s not all challenges for businesses. For example, Facebook recently announced that they are entering a new stage in developing better ways for businesses and customers to find each other.
Given how much Facebook’s model relies on business participation, the social media network will significantly be improving product and business discovery for consumers in the following years. It will do so through making recommendations to users based on contextual cues and further integrating the use of its other networks and apps, such as Instagram and WhatsApp in the process.
At the same time, and in line with consumer sentiments, they also declared that they will be giving people a greater say via so-called privacy-enhancing technologies over how their personal data is used in advertising.
So while personalization may be challenged, the moment also offers businesses a unique opportunity to make more out of less. Predictive analytics and AI are other segments of technologies that are increasingly being used to determine outcomes and possibilities where data is insufficient. Similarly, immersive technologies such as augmented reality (AR) can provide an experience that is sufficiently customizable without requiring sensitive data to be revealed.
Are you wondering what the best course of action is when it comes to balancing between personalization and data privacy? Here are a few tips on how you can proceed.
How to handle customer data responsibly and offer personalization.
Data privacy and personalization on social media are not mutually exclusive. By sticking to the following general guidelines you will be able to handle data responsibly while still reaping the benefits of offering personalization to your followers.
1. Comply with legal requirements.
Data privacy policies will likely be increasing in the coming years so complying with them as soon as possible, and as thoroughly as possible is a priority. This way you will avoid legal troubles as well as the need to revamp your whole marketing strategy in a rush due to not taking them into account earlier.
But legal compliance is also important for another reason. By being serious about your compliance you are also taking toward a more customer-centric focus. When your customers know that you are strict, they will be more likely to trust you and develop a more solid relationship.
2. Stick to relevancy and data consent.
According to the Salesforce report cited above, 66% of customers expect companies to understand their unique needs and expectations. This means that unless you want to risk alienating customers, your brand needs to focus on the meaning of data to provide only the most appropriate offers.
Past purchase data, intent, affinity, and location, as well as any other type of first-party data provided willingly by customers, need to be assessed carefully. Similarly, evaluating the most appropriate channel to address them is also required. This degree of relevancy may sound granular but it is key to building customer loyalty.
3. Offer transparency.
Given people’s fears of how data is being used, offering transparency is another way in which you can win their trust.
Ideally, you should provide users with a clear and concise description of the types of data that you collect and an explanation about how you intend to use that data. Your company’s privacy policies and practices need to be easily accessible and understandable. Allowing for easy opt-outs is also important since it gives people a sense of control over their data, and how much they want to make available.
On the reverse side, you must make sure that in communicating how you handle data you don’t overwhelm them by offering them a level of detail they likely don’t need. This can make them anxious about whether they understand the full implications of data collection and whether they are not underestimating the risks.
4. Don’t be pushy.
Even if you comply with all legal requirements, provide relevant offers, and be transparent about how you utilize data, you may still end up being pushy.
Utilizing “creepy tactics” is one of the ways in which you can alienate followers and customers, and you should be wary of using them. These, according to SmarterHQ include things like sending push notifications for products and brands that users previously looked at or products they purchased. Advertisements featuring brands or products that users have looked at may also come across as pushy.
It must be noted that there are generational differences in what comes across as pushy, as Gen Z is less likely to experience push notifications in that way. Just to be on the safe side, though, a degree of discreetness when advertising to your followers is warranted.
5. Let brand values drive brand loyalty.
Brand values are increasingly a factor in whether customers stay or go. In this sense, they are also related to personalization because they need to match customers’ ethical requirements.
This is especially valid with younger generations, who hold companies to a much higher standard than older ones. Brands now need to demonstrate their values clearly, particularly when it comes to their advocacy for human and civil rights, the reduction of fossil fuels, the ethical use of tech, and so on.
For both individual consumers as well as business buyers, this aspect of companies’ image and culture has grown in importance and must be taken into account if a company wants to retain its followers and advocates.
Ways to personalize your social media content.
Lest you feel like you’re left to yourself when it comes to personalizing your social media content while respecting followers’ privacy, we’ve rounded up several examples of how to do that. These offer you ways of connecting to people while being aligned with principles outlined above.
1. Use retargeting ads.
Wait, retargeting? But doesn’t that cross privacy boundaries and make people feel like you’re spying on them and being pushy? It may but only if you have not asked them for consent and informed them clearly about what data you collect and how you intend to use it.
This isn’t simply a way of dodging responsibility. Some people will genuinely like to hear from you and receive further offers. You must only make sure to state in a simple and clear way how you intend to use their data. Then, once people opt-in, you should feel free about using it for retargeting.
That said, retargeting campaigns offer great possibilities for personalization. If you’ve segmented your audience well, you should be able to use that information and retarget people in a way that clearly addresses their pain points.
Retargeting campaigns can offer similar products to the ones that users have already purchased (like Amazon does). They can also serve the purpose of reminding people that they didn’t finish a purchase. All this aligns perfectly with being relevant, being transparent, and asking for data consent.
2. Collect information with polls, quizzes, and questionnaires.
These types of content are more about gathering personal information than about offering personalized content. They are an effective way of learning about your followers and, again, people have the prior option of giving their consent to their data being used.
The advantages of quizzes and questionnaires is that they are highly shareable and that they can be used by both B2C and B2B businesses. And depending on how you design your quiz, it may also include useful information that you offer to your followers, alongside quizzing them on certain topics.
3. Provide personalized messaging and support.
Chatbots are a great way to deliver personalization and boost your customer service with Messenger.
While chatbots can’t lead a whole conversation, they certainly provide you with the option of automating conversations with followers as well as collecting important information about their preferences and pain points.
You can also effectively use chatbots to provide personalized information to followers in the form of responses to questions and relevant content and links. Bots can also be used to engage followers who have expressed interest in your events or to contact those who haven’t completed a purchase and offer them customer support.
4. Create videos.
Video content is great because it generates a lot of engagement. So what if you could personalize videos? Sure you can! Facebook’s personalized videos that depict the history of the friendship between two people are a very simple way to do that.
Obviously, brands don’t have the same capability as Facebook but the lesson here is that as long as you’re allowed to use people’s data, you can create simple personalized videos for them that will increase their engagement, and provide them with something cool to share with others.
Personalization doesn’t need to come at the cost of jeopardizing individuals’ private data. Even though there are greater requirements for companies, plenty of possibilities for personalization exist — from using alternative identifiers to collecting first-party information in a consensual way.
Falcon can also help you learn about your followers and identify their interests in an ethical way. Thanks to the analytics capabilities of the platform you will be able to create enriched individual profiles of your followers and target them appropriately, all without being nosy.
Are you interested in giving Falcon a try? Get in touch to request a free demo, and let’s see how we can help you with your personalization efforts!