USE DATA TO BUILD, NOT BUST, CUSTOMER TRUST

O N E T O U G H Q U E S T I O N : P R I VA C Y
USE DATA TO BUILD,
NOT BUST, CUSTOMER TRUST
MARKETERS WHO USE CUSTOMER DATA RESPONSIBLY
WILL STRENGTHEN CUSTOMER RELATIONSHIPS AND DRIVE SALES.
SPONSORED BY
Data privacy seems to be an
oxymoron today. But it shouldn’t
be. Well-managed customer
data can lead to all-important
customer trust. How important is
that trust? According to research
from Forbes Insights, 94% of
CMOs surveyed say that building
trusted customer relationships is
critical. Further, 85% assert that
data is an important component
of building customer trust.
And customers are happy to
provide data—if there’s a value
exchange. A Harris Poll on behalf
of Transera Inc. found that 67%
of U.S. adults would be willing
to give companies access to
basic personal information in
exchange for better service
or products. Indeed, 44% of
consumers feel that in the past
12 months they’ve received more
relevant offers by sharing more
personal data with companies
they typically buy from.
This begs the question: How
can marketers create a virtuous
cycle of data acquisition and
use that to build rather than
bust customer trust? Here, 11
customer data experts give their
advice on doing just that.
–Ginger Conlon
TABLE OF CONTENTS
7 Michael Darviche, Managing Director,
Bridge22
César Montes, Global Chief Intelligence Officer and Chief Strategy Officer, Geometry Global - EMEA
8 Ryan Phelan, Email Industry Thought Leader
Dennis
Daymann,
Chief Privacy
and Security
Officer,
ReturnPath
4 Bryan Pearson, President,
LoyaltyOne
5 Dave Scott, CMO, Gigya
Len Shneyder, Director of Industry Relations, Message Systems
6 Steve Kerho, Chief Strategy Officer,
Meredith Xcelerated Marketing
10 Todd Ruback, Chief
Privacy Officer, Ghostery
9 Jeff Berry,
Research
Director,
Colloquy
Erik Ober,
CEO, Booshaka
BRYAN PEARSON
President, LoyaltyOne
@Pearson4Loyalty @LoyaltyOne
Only by using data responsibly can marketers build customer trust. Here are
five key steps to responsible data use.
Be transparent and reasonable.
When organizations explain their
intentions for data use in straightforward language, and spell out the
benefits to the customer, that customer is more likely to engage with
the brand.
Give customers a choice. Let customers choose how to share their information. Giving them control leads
to their buy-in. LoyaltyOne’s AIR
MILES Reward Program is permission-based, and 99.99% of customers
opt to share their information.
Respect and protect data. Collect only
the data needed. Use it only as promised and retain it only as long as needed. Avoid personal, creepy areas such
as financial information or questions
about children. Destroy data with care.
Monitor frequency. Brands can stand
apart by taking care not to overwhelm customers with too much information. Make sure emails are not
too frequent, while being responsive
to customers’ needs.
Deliver mutual value. Brands must
ensure that the data they use delivers
recognized value for the customer, as
well as for themselves. By value, I do
not simply mean the product, cash,
points, or coupons. I refer to creating
something more powerful: relevancy.
DAVE SCOTT
CMO, Gigya
@Gigya
Collecting the data required to deliver more relevant marketing and user experiences
without violating privacy and losing customer trust is indeed a privacy paradox. But, increasingly, marketers are turning away from surreptitious data collection methods like
data brokering and third-party tracking cookies in favor of other means of understanding
their customers—namely, through leveraging customer identity. “Identity” in this context
is everything a brand’s customers choose to divulge about themselves—from basic details
like their names, email addresses, and ZIP Codes to deeper profile data gleaned from customized registration forms or their social network accounts. By leveraging this accurate,
permission-based first-party data to personalize every interaction, brands ensure that customers have greater control over their personal data and privacy, in turn earning their trust.
LEN SHNEYDER
Director of Industry Relations, Message Systems
@LenShneyder @MessageSystems
I’m going to borrow a page from Sri Somanchi of Google’s Gmail team, who said there are
five R’s he teaches to Google’s internal marketers:
1. Right acquisition
2. Right engagement
3. Right measurement
4. Right adjustment
5. Right opt-out
At the heart of these five R’s is the idea that the entire customer relationship needs to be
based on trust, and the five R’s are a means of achieving and keeping that trust. Transparency
during user acquisition means the relationship starts on the right foot. Measuring user behavior to determine engagement levels is essential. Don’t set it and forget it; reevaluate constantly
and adjust what you’re doing with customers’ data and how you’re engaging them.
Protect that initial good beginning by limiting the scope of the engagement and safeguarding the data: Don’t sell it, share it, or let it out of your sight. That data was for you and
for a specific purpose—let that idea be your guide and ultimate arbiter of what is right and
wrong to do with customer data.
Additionally, know your market; different geographies have defined what’s possible with
customer data in very different terms. What’s legal in a specific geography is highly problematic in another. Let’s remember, just because you can doesn’t mean you should. So, exercise good judgment regardless of where you or your customers are.
And finally, don’t be afraid of losing a customer. If the experience of disengagement is
painless there’s a chance they’ll return.
STEVE KERHO
Chief Strategy Officer, Meredith
Xcelerated Marketing
@SteveKerho @MXMtweets
Data collected must benefit both consumers and marketers. The benefits to marketers
are obvious: enhanced targeting, effective
messaging, and offers that deliver superior
performance. The advantages to consumers
are often missing from the conversation.
To deliver true transparency to consumers, the following elements are required:
1. Consumers should be able to determine
what is being tracked about them.
2. Consumers should be able to view the
data that is collected about them.
While these are simple goals, creating a
failsafe process to realize them is another
matter. Lack of consumer understanding
and sophistication is a key barrier.
As marketers we’d do well to place ourselves in the consumer’s shoes. If a tracking, measurement, or targeting program
feels creepy, too personal, or intrusive,
then it probably is. Just because we can
track behavior or draw a specific inference
doesn’t mean that we always should. Consumers must have good reason to believe
that their data is safe. Without a system
that warrants their trust, consumers will inevitably opt out, bringing one of the most
powerful Information Age data engines to
a grinding halt.
As marketers, it’s our responsibility to
treat consumer data with the highest levels
of respect, transparency, and professionalism that it deserves. Our motivation to protect consumer data shouldn’t simply be to
avoid the potential threat of a public backlash; we should do it because it’s the right
thing to do.
MICHAEL DARVICHE
Managing Director, Bridge22
@Digitargeter
It’s true that data privacy is largely a concept and not really managed. Regarding consumer activities and thoughts, it’s a wide-open door today. Marketers receive such huge improvements
in terms of purchases and ROI from this kind of customer data that it’s unlikely the industry will
self-regulate. And with plenty of closed-system marketing platforms (Facebook, et al) capturing this data at scale, marketers have all the more reason to try to keep up.
Consumer trust isn’t black and white. It varies from marketing situation to situation. Consumers are implicitly OK with their data being accessed if and when they get real value—emotionally, like access or entertainment, or financially, such as discounts or rewards. Marketers who
directly touch consumers around a product or experience can create remarkable data acquisition at scale. Beyond Facebook, game apps are a savvy example. Cleverly, they opt consumers
in to agreeing to share contacts, emails, location, and transactional information at the emotional moment of download, and they
continue to access behavioral and interest information every day, with every game played. The trust builds for purchasing the
next app, because the rewards are positive—and the data risks are sold downstream and not apparent to the user. Consumer
trust can continue to build here, via increasing and frequent rewards, group social connection, and the all-important transparent
protection of data use and exposure. Marketers can maintain and grow the cycle, using engagement to remind and reconfirm
this agreement frequently.
CÉSAR MONTES
Global Chief Intelligence Officer and Chief Strategy Officer, Geometry
Global- EMEA
@GeometryGlobal
Data is a powerful tool for building customer trust, but only if it’s harnessed to create and
deliver messages that are truly relevant to the consumer. Geometry Global’s 2014 Connected
Shopper study on global shopping behaviors revealed that while 76% of respondents were
concerned about whether companies were handling their personal data responsibly, an almost
equal number (75%) was willing to receive relevant communications, offers, and coupons from
brands. Even though 43% of those surveyed felt they lacked control over their data trail, as
many as 26% of respondents were willing to trade off a degree of privacy to benefit from the
full advantages of e-commerce. In other words, when people express concern about how companies handle their data they’re not saying that they want companies to stop communicating
with them. People don’t mind brands using their personal profiles to engage them as long as
they receive something interesting (right message) and appropriate (right moment and channel).
So, the discussion should actually focus on how to find the proper mix of message, moment, and channel to make communication relevant. Marketers must pay greater attention to understanding shoppers’ purchase-decision journey to find the correct
points of influence during which communication will be most relevant. This is the key to enhancing the effectiveness and efficiency of brand communications while simultaneously alleviating customers’ privacy concerns.
RYAN PHELAN
Email Industry Thought Leader
@RyanPPhelan
More and more companies are going to struggle with the balance between the data they have and
their ability to use it. Consumers want a closer relationship with companies that they love and information they can use, but not to the extent that it creates awkward and creepy situations. Companies have to have an internal governance policy for the use of data that determines what data
the organization will use for analysis and what it will use for direct communication. This governance
changes over time, but at the core keeps the customer relationship as a connection—not, as some
have discovered, an intrusion. This is important because as we grow in our technology, information
such as real-time behavior data is going to become more accessible. Think about how much data a
fitness company collects based on a wearable device. What can that tell a company about individual
behavior, especially coupled with third-party demographic/psychographic data?
As technology grows, the consumer’s level of trust grows, but the use of that data retreats to those communications that build a
relationship and enhance the user’s contextual life. Exceeding that intended use will end up being a violation that will ensure that
consumers retreat from providing data.
So, when developing a customer strategy, recognize that twist in your stomach. When that happens, step back and evaluate if
you’ve crossed the line. Having governing principles will back you up.
DENNIS DAYMAN
Chief Privacy and Security Officer, Return Path​​
@DDayman @ReturnPath
It really comes down to hyper-transparency. Courtesy of the Internet, people everywhere have at
their fingertips the most powerful tool ever for finding out what’s really going on and informing
others. They’re gaining unprecedented access to all sorts of information about governments, corporations, and other organizations in society—and the same exists for those organizations and
corporations that have more data on people than they’ve ever had before.
The uptick in breaches isn’t helping the trust we need to build with consumers and the non-permissioned, over-collection, and use of personal data isn’t either. Too many companies are buying
data and using it without the notice, consent, and choice of the consumer. Fostering trust between businesses and consumers begins with the business granting choices and control to their
consumers, especially concerning its products and services that are being used for data capture.
This simple strategy allows businesses to start earning trust from their end-users.
Once consumers see repeated respect for their privacy, they’re more likely to provide information to
the business. To be honest, I think the idea or confusion behind the term Big Data has caused problems
in marketing—and in email marketing in particular. Marketers think that there’s a new set of ideals or processes in place to send email marketing, when in reality the oldest and simplest processes of sending
relevant, targeted, and permissioned messaging still stands. When businesses keep a privacy-centric focus, and keep the needs of the end-user in mind, trust is immediately built.
JEFF BERRY
Research Director, Colloquy
@Colloquy
When LoyaltyOne surveyed 1,000 U.S. consumers on the data privacy issue, no less than
77% said they don’t feel they’re receiving any benefit from sharing personal information. This
survey result underscores that consumers are disappointed and becoming reluctant to share.
For years they’ve provided their valuable information and they’re not realizing something of
suitable worth in return. Brands need to act quickly to demonstrate that they have the consumer’s best interest at heart or they risk an erosion of the business-to-consumer relationship.
There’s encouraging news, too. In the same data privacy survey, 63% of respondents said
they’d be willing to give more personal information if companies sent them relevant product
and service offers based on the personal data they had provided. Brands that operate loyalty programs should make it a priority to find the sweet spot where relevant engagement
meets the need for personal details.
ERIK OBER
CEO, Booshaka
@ErikOber @Booshaka
Marketers need a way to improve returns by connecting customer data and making it actionable, but customers are understandably reluctant to share personal data with brands
that abuse their trust. Fortunately, there’s a secure solution that allows marketers to create
targeting groups on Facebook and Twitter from existing customer email addresses, phone
numbers, device IDs, and other data—all without compromising customer privacy.
Facebook and Twitter allow marketers to create custom audiences using customer data, and
with the right technology, marketers can use their data to deliver more relevant customer experiences while keeping consumer data private. To create custom audiences, marketers can “hash”
customer data before it is uploaded, turning it into a short fingerprint that can’t be decrypted.
For example, data hashing would turn an email address like “[email protected]” into
an encrypted digital fingerprint such as “9a510e527f.” The encrypted data could then be
uploaded to Facebook or Twitter securely to create an audience, ensuring that the data is
only used to create an audience, then promptly deleted and not shared with other parties.
Hashed data is unreadable, even by Facebook or Twitter.
By using this technology, marketers can create an audience, deliver a more relevant consumer experience and respect customer privacy. Hashed data delivers a win for everyone,
enabling marketers to identify lookalikes and deliver more precisely targeted offers while
making sure customer data stays private. That’s how marketers can create a virtuous cycle
of delivering value to customers while improving marketing ROI.
TODD RUBACK
Chief Privacy Officer, Ghostery
@CPORuback @GhosteryInc
The collection and use of data in new and innovative ways will continue to spur the marketing
industry to new heights. However, the business
landscape is changing quickly—from the skyrocketing use of mobile as a default screen to
interconnected devices, commonly known as
the Internet of Things (IoT). Marketing will naturally flow to new business practices based on
both, but must do so in a thoughtful way that
not only complies with evolving privacy laws
and well-established privacy principles, but also
in a collaborative way that engenders trust. It’s
important because both mobile and the IoT are
predicated on massive data collection, which
will allow for new uses of data to be devised.
The new uses of data, in addition to having potential ground-shifting social benefits, will also
drive new channels of revenue.
As exciting as the new frontier appears, it
comes with huge challenges; in marketing,
namely, how to apply old privacy laws and principles to new technologies and uses of data. To
bridge the gap, businesses must strive to be
open and honest about their data collection and
use practices, even as they change and evolve
quickly. Transparency is always a good idea, but
in the context of mobile and the IoT, marketers who have a well-thought-out transparency
strategy will find that privacy is actually a valued process, something that will separate them
from their industry peers. Transparency creates
a collaborative bidirectional relationship with
customers that invests them into the business
relationship and serves to empower the consumer, which helps to build brand value and
long-term relationships. Transparency always
has been a best practice and always will be, regardless of new paradigms.