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The Personalization Paradox: Transforming Consumer Perceptions with Declared Data

Striking a balance between respecting consumer privacy and providing a personalized experience is quite a challenge for the modern corporation. Learn how to utilize transparency to gain consumer trust and loyalty.

Marketers face a real conundrum when it comes to personalization and privacy; consumers want personalization but are wary of businesses harvesting the data needed to achieve it. This is commonly referred to as the personalization paradox, and there’s no shortage of evidence to illustrate just how much-personalized experiences impact the buyer journey.

According to Infosys, a third of consumers want a more personalized experience, whilst an Accenture report said 91% of consumers are more likely to shop with brands who recognize, remember, and provide relevant offers and recommendations. The segment reported that 44% will become repeat buyers after a personalized shopping experience. They’re more likely to purchase a product they didn’t initially intend to buy, as well as buy something more expensive than originally planned, according to a Pure360 survey.

Personalized Vs. Invasive

Despite this, there remains growing consumer concern over online data privacy, and many marketers are misfiring. From a customer point of view, there exists a fine line between “personalized” and “invasive”. The Accenture report noted that 41% of consumers find it creepy when they receive a text from a brand or retailer as they walk past a physical store, and 35% find it creepy when they receive ads on social sites for items they’d browsed on a website.

In other research (by HubSpot), 79% of consumers say they had blocked ads because they felt they were just being targeted for items they’d purchased in the past. But more significantly, 77% of consumers prefer to filter ads rather than block them. This illustrates that consumers pay greater attention to personalized ads if they are aligned with their interests.

Whilst this research is indicative of general sentiment, there do exist some generational differences in attitude and expectation. Older generations feel somewhat violated by personalized digital targeting, whereas younger groups appreciate seeing ads that are relevant to them.

It’s clear there is an urgent need for better education around data, privacy, and personalization. Consumers want to understand how marketers use their data and also how targeting actually works. Marketers must clearly articulate the value exchange between self-reported data and how it’s used, to provide better customer experiences. A Salesforce survey showed that 57% of consumers are willing to share personal data in exchange for personalized offers or discounts.

Of the 27% of consumers who reported a brand experience that was too personal or invasive, almost two-thirds say it was because the brand had information about them that they didn’t share knowingly or directly, according to the Accenture report.

It’s this confusion and lack of transparency that is causing concern. New regulations, such as the California Consumer Privacy Act (CCPA), due to be enforced in 2020, means businesses have to be more transparent and give consumers better control over their own data: accessing it themselves, knowing who else has access to it, and refusing its sale.

By being transparent, marketers can build trust. Through a two-way digital dialogue, they can create “living profiles” that customers can actively control and update themselves to curate their own experiences. This is a way to be hyper-relevant without crossing the creepy line.

Personalization requires great data – declared data – and great sensitivity. As we move into the era of AI and machine learning, and with that, a whole new set of fears, the marketers who are able to evoke human trust, empowerment, and accountability around the use of data, will be the ones who rise to the top.

 

This article was originally published by PureProfile.

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