Balancing Personalization and Privacy

Many marketers – including us – discuss the importance of segmentation to deliver targeted ads and emails. What we haven’t discussed fully are the risks of personalization, and how to avoid them. In attempts to create personalized, hyper-targeted experiences, businesses run the risk of invading privacy, annoying customers, and even breaking laws. This article will cover why personalization is important, and how you can implement personalized experiences without driving away customers.

 

WHAT IS PERSONALIZATION?

Mass marketing can be useful for building brand awareness, but it isn’t very effective online due to the amount of competition among businesses seeking the attention of consumers in digital spaces. Consumers are constantly bombarded with attention-seeking content. At the same time, people have become experts at configuring their notifications, email inboxes, and social media feeds to only receive content they are interested in. This is where the topic of personalization comes in. Personalization is all about delivering messages that focus on relevancy rather than quantity. Personalized marketing experiences are widespread today. From personalized social media feeds to Netflix recommendations – it seems like consumers expect personalized marketing experiences. But at the same time, many consumers will lose trust in a brand if they feel like their privacy has been invaded, or if they’re bombarded with ads.

 

INACCURATE PERSONALIZATION CAN DRIVE CUSTOMERS AWAY

According to a report by the firms Econsultancy and RedEye Optimisation, 71% of organizations utilize a form of personalization in their marketing efforts, with email being the most common channel for personalization. Despite personalization proving successful for most marketers, most people can describe a time when they feel like they’ve been stalked online with ads. According to SmarterHQ’s report, nearly two-thirds (63%) of consumers surveyed saying they’ve stopped buying from a brand that employed poor personalization activities. Furthermore, 66% were annoyed when they were targeted too many times, and 44% found it annoying when brands targeted them for too long a period of time.

This has likely happened to you – You clicked on an ad that you thought was interesting and it took you to a landing page where it asked for your email in exchange for an offer. After submitting the form, you soon realize that it’s not something you’re interested in. However, even after unsubscribing from the email you continually get blasted by ads from the company over and over again. For many people, this can result in resentment towards that business, and it’s something that it could’ve easily avoided by limiting their ad frequency settings.

 

HOW TO BALANCE PRIVACY AND PERSONALIZATION

The key to developing exceptional experiences for customers is to create a good balance of privacy and personalization. Consumers make decisions every day about where they spend their money and attention, and where they share personal information. With so much competition and saturation in the digital spaces, it’s very difficult to build and sustain loyal customers. Personalization and tailored ads are one of the best ways to do this, but as stated earlier, it can have negative effects if done poorly. To achieve the benefits of personalized marketing without being creepy and turning off consumers, marketers need to track and make use of customer data in ways that feel unobtrusive and valuable to customers. Brands must also clearly inform their customers how their data is being collected and used.

Here are some ways your business can successfully create personalized and targeted experiences without driving customers away:

  • Be transparent and clear with what your company is doing with customer data. This should be done with a privacy policy page and by asking people to opt-in if you’re collecting cookies. Make sure you are compliant with the laws in this regard.
  • Don’t purchase third-party data, build up your own–and do so ethically. This way at least people will know why they’re seeing a promotion from your business.
  • Limit the number of times your ad is shown to the same person–this can be done in your ad campaign frequency settings. Ideally, you want this number as low as possible while achieving results. The ideal number is debated but is usually around 2-4 times.
  • Invest in Customer Identity and Access Management (CIAM)—this is where people register for an account with your website or app.
  • Segment your email list into categories based on how they signed up for the newsletter, or what product or service they paid for, then create newsletters tailored to those groups.
  • Create ads with messaging and imagery that tailors to your specific audiences.
  • For brick-and-mortar businesses, location-based marketing software can show automated messages or ads to people within a certain area of your business. One example would be a retail app sending push notifications to shoppers that are near the store about a sale happening. However, developers must ensure that they have made customers aware that this could happen when they register for an account.
  • You can ask people to opt-in for push notifications that allow you to create behavior-based messages for users on their browsers. Again, this should never be done without their consent.

 

FINAL THOUGHTS

Consumers are increasingly skeptical of whether or not they can trust brands with their data, but at the same time, they’re more willing to trust brands who create highly personalized experiences that make their lives easier. Brands must learn how to utilize personalization with boundaries, and be transparent and secure with that data. When done properly, personalization will strengthen customer relationships and increase customer loyalty.