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Personalized marketing and customer trust go hand in hand

Marketers strive to provide personalized experiences to their customers. But customers will only reveal personal information in exchange for trust.

Old techniques of proliferating a generic message in multiple places are giving way to more personalized, relevant...

communications based on customers' individual preferences. In marketing, this represents a shift from impersonal, transaction-based messaging in favor of preference-based, tailored experiences for customers.

Voice of Customer (VoC) research by Ernan Roman Direct Marketing Corp., indicates that, notwithstanding privacy concerns, customers and prospects are willing to provide personal information to companies in exchange for something of value. It's up to marketers to meet these demands, but they can't get anywhere without good, quality data and a rich, reciprocal relationship with their customer bases.

The reciprocity of value equation

Marketers must change their strategies to use data to craft personalized communications. Companies need to take their customers' individual preference information and figure out what to offer them. A way to remember this is to employ the reciprocity of value equation:

Customer reciprocity + Business reciprocity + "Human data" = Customer experience transformation

Customer reciprocity refers to customers' acknowledgment that, to receive more relevant and personalized communications and offers, they need to provide marketers with personal or business preference information. Business reciprocity refers to marketers' recognition that they have to serve customers with content that caters to their preferences. To be truly personalized, content has to be based on more than just transactional, overlay and inferential data. Human data refers to opt-in, self-profiled customer information on needs, expectations, preferences, demographics and other personal data. When these aspects are combined, the customer experience will be more individualized and focused.

Earning the customer's trust

But marketers have to earn the right to request human data in the first place. By earning trust through marketing campaigns that motivate customers to opt in, marketers will create a high-quality database of customers who truly want to interact.

VoC research found that B2B and B2C customers won't allow companies to use human data unless specific promises are kept, including the following:

  • Deliver on the fundamental brand promise.
  • Treat the customer fairly in terms of pricing and customer service policies.
  • Protect customer information: Explain the reasons for the opt-in information requests and ensure the privacy and safety of data.
  • Improve customer experiences by using stated preferences and aversions.

Retailer earns trust and engagement

Gilt, an online retailer, has personalized its marketing efforts to drive engagement for new and existing customers. The company has increased orders, decreased email and mobile push notification unsubscribe rates and boosted repeat-purchase rates.

"Gilt's commitment to a personalized experience is evident when customers return to the homepage of the website or mobile app," said Welington Fonseca, Gilt's vice president of marketing and digital analytics. "Sales within the store [men, women, kids, home] with the highest affinity to a consumer's past behavior and preferences [browse, purchase, favorite brands, wish list] are presented at the top of their homepage with all other sales ranked according to relevance based on previous shopping behavior and collaborative filtering."

Another example of Gilt's personalization strategy is the algorithm-powered Your Personal Sale feature, which displays the most relevant brands and products based on individual shopping patterns and self-stated preferences, providing Gilt with another way to interact with customers to understand their needs.

"All communication is personalized, with the company sending [more than] 2,500 versions of personalized emails and mobile push notifications on a daily basis, eight times per week," Fonseca said. "Results have been a double-digit increase in orders and reduction in email and mobile-push-notification unsubscribes."

Key takeaways

Companies are competing for consumer attention in an ever-changing landscape of technology and evolving preferences. Make your business stand out by providing highly personalized communications, offers and experiences. Start with preference-based human data, not just traditional inferred or transactional data. But it won't be easy to use this information, because trust must be earned before the data can be used. A valuable exchange of information between the customer and the company will make the customer's experience better while boosting sales.

Next Steps

Customer personalization key business differentiator

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Is your digital content strategy up to snuff?

This was last published in March 2015

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How does your company's marketing department continuously provide value to your customers?
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Our marketing department has shifted from the typical generic message that is used in multiple places or for different individuals to more specialized and relevant communication that is based on customers' preferences. This kind of tailored experience is important notwithstanding privacy concerns. However, our aim is to develop a rich reciprocal relationship with our customers so that we do not become a bother even when discussing a new product.
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Hmmm, speaking from the perspective of a consumer, I'm not sure how I feel about the idea of more personalized marketing. My trust is definitely hard to earn. I find businesses that want to sell me something inherently distrustful. Additionally, I feel completely desensitized to almost all forms of marketing. I avoid ads and commercials, but if I happen to see one, I couldn't even tell you what it was about.

I suppose being targeted for personalized marketing could be a good thing, but only in those few instances when I'm actually shopping around for a product or service. 
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We try to view every one of our sales as a one-off, uniquely tailored to the needs of each customer. That's rarely the case - there's no need to reinvent the wheel every morning - but we do rework our work so that it's best suited for one customer. Sometimes we're lucky enough to reuse that design. It's essential for us that customers are pleased with both the intent and the content. When we don't feel we can do that, we walk away and hope we're developing a new client for future use.
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Essentially, by knowing the value we provide to them. In one of my roles as the CCO for a real estate brokerage, we have a very defined value proposition. As long as we're delivering accurate info about available properties and the best way to contact us, then our job is done. Our process includes social outreach, #inboundmarketing and direct mail efforts. I'd be interested to see what steps other companies use to keep their business clicking along.
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We hired a marketing resource to focus on this, but the results haven't been optimal. We're looking at alternative ways to make this happen.
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This is a long-term process. You will never get your customers to trust you unless you are creating outreach that isn't always selling. The best method I've found is to reach out to your customer base eight times a year - and in six of those touches, don't include anything about a product or service. On the fourth and eighth touch, you can share a subtle call to action to give them more info. That way you're not scaring them away. Ultimately you are providing more value than other firms and sales people who are crashing down their door with "BUY NOW" messages. The trust builds and when something does arise, these customers turn to you because you didn't hard sell them.
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Jeff Cutler has it just right. "Trust" is neither quick nor easy nor a short term fix to anything. It's an investment that take honest, long-term action. It requires listening and reacting and - frightening word in this marketplace - actual, honest caring. "Personalized" marketing takes an honest, long-term relationship with our customers. And a deep understanding that our customers actually know when we're being phony.... 
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