No knowledge enterprise is value compromising your buyer expertise

Last Christmas I bought a friend of mine a subscription to a science and culture magazine. She had discovered the magazine while on hiatus, so was thrilled when they showed up at her door.

The gift was a hit even though I misspelled her name. But then other magazine offers arrived in the mail. Then there were calls for donations from charitable groups. Next, travel agency ads. And then came the political mailers.

When she activated her digital subscription, it got worse. Although Google’s algorithm kept some spam out of their inbox, the same companies showed up to overflow their mailboxes. Eventually she replaced that email address with another that the magazine didn’t know about.
How did she know the magazine had sold her data? Because my spelling mistakes were popping up everywhere. Fed up with it, she checked the magazine’s privacy policy; She had no choice but to cancel her subscription, and did so months before it expired.

Customer experience is more important

The magazine lost its business when it sold my friend’s data. What did it win in return? Probably around $ 0.20. Although the value of a customer’s data varies based on their circumstances, it rarely sells for more than a dollar.

In summary, the sales of user data add up. But no advertising money can remove the blemish that sales leave on the customer experience. In a study published last May, the data sharing Insights Network found that 90% of consumers consider it unethical for companies to share personal information without the user’s consent. Although some customers overlook the data exchange, which they consider unethical, customers like my friend will not.

It doesn’t matter whether my friend is the exception or the norm. Importantly, almost three quarters of consumers consider customer experience to be an important factor in their purchase decision, according to a PwC report published earlier this year. And nothing puts the customer experience at risk like the unethical handling of personal data.

Treat customer data like your own

Of course, customers have different expectations of how their data is handled. So how can you tweak your data policies to get the best experience for most customers? Follow the golden rule: treat user data the way you would like your own to be treated. In other words:

1. Don’t buy data; Ask about it.

In the US alone, companies spend more than $ 10 billion annually on third-party audience data. The problem is that 65% of consumers feel uncomfortable having their personal information shared with for-profit companies, according to the Insights Network report.

But where, if not from data providers, can you get customer insights? What about the customers themselves? Snapchat and other companies that focus on the customer experience partner with companies like Jebbit to collect what is known as declared data. Declared data is first-party information that consumers voluntarily provide about their motivations, intentions, interests and preferences.

While it seems impossible to collect enough declared data for big data initiatives, Jebbit points out that online experiences and conversations can make the collection scalable. Since customers indicate this voluntarily, declared data is also usually much more precise than data from third-party providers, of which two-thirds of the consumers surveyed found Deloitte to be mostly inaccurate.

2. Give something back to the customer.

The question is, are consumers really ready to share their data? Most are – provided they get something in return. According to a survey by Acxiom and the industry group Data & Marketing Association, 58% of consumers decide on a case-by-case basis whether a service upgrade is worth sharing their data.

What exactly do customers want in exchange? In a world of personalization. Research from Epsilon shows that 80% of consumers are more likely to buy from brands that offer personalized experiences. Most consumers realize that products and services cannot be tailored to suit them unless they share a certain amount of personal data.

For inspiration, check out Spotify. The music service not only uses user data to create custom Discover Weekly playlists, but also creates limitless daily mixes in the user’s favorite genres. Last but not least, its Release Radar helps users find new releases from their favorite artists.

3. Get consent before sharing or selling user data – or better yet, don’t sell it at all.

While the US doesn’t have a comprehensive law like the European Union’s General Data Protection Regulation that requires companies to obtain customer consent before sharing or selling their data, new laws like the California Consumer Privacy Act point to a shift in this Direction. Just because the practice is currently legal in the U.S. doesn’t mean it is a smart business move.

To show that you are serious about protecting your customers’ privacy, first update your privacy policy to make it clear that you are getting informed consent before selling or sharing their information. The University of Michigan Inter-University Consortium of Political and Social Research provides an introduction to model language and phrases to avoid. Although it focuses on research data, leading companies take a similar approach to their marketing data.

At a time when the customer experience is paramount, stealthily selling user data just isn’t a smart move. The science magazine would have earned a quarter of it, but it would also have turned a paying customer into a newcomer.

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