It’s eleven o’clock. Do you know how your data is being used?
According to research recently released by marketing analytics firm Aimia, the average consumer now realizes their data is valuable to marketers – 42 per now see their data as being highly valuable – but they still don’t understand how it’s being used. Nor do they know how their data is being collected, what is being collected, or how they can maintain control over their personal information.
This insight arrives courtesy of Aimia’s annual Loyalty Lens report, which involved surveying more than 15,000 customers in nine countries in order to predict customer loyalty standards for the year ahead.
Unsurprisingly, the research shows that customer expectations and behaviours are evolving: As companies increase their use of customer data, those customers in turn are becoming more aware of what they share, and many now want to explicitly understand the value they get in return for sharing.
Traditionally, the assumption has been that customers were more than happy to share their data through an “implied consent” model. However, the Aimia report found, there is now an emphasis on “informed consent.” As they knowingly sharing data, customer expectations are increasing, and getting discounts and reward points are no longer sufficient. The price companies now pay for customer data is the expectation of consistent surprise and delight.
In light of this evolution, the Aimia report said that companies must move away from simply collecting data; instead, they must use it to provide more value for customers, along with a better experience. Otherwise they risk both their reputations and data quality, since consumers are better able to withdraw previously given consent to use their information and voice their dissatisfaction through social media, researchers said.
Ultimately, the researchers came away with five insights into customer loyalty that marketers should keep in mind in this data-driven era:
- The value of data is rising: Aimia found that the number of customers globally who view their data as highly valuable has increased by a third since 2014, while more than six in ten customers expect better experiences with companies whom they know hold their data.
- Different data has different value: Internet savvy consumers believe that online behaviours and contact details are worth more to companies than lifestyle and demographic data.
- TMI: More than seven in 10 customers worldwide don’t know who knows what about them, but are still sharing an increasing amount of data with companies every year.
- Young and carefree: Younger customers place a lower value on their personal data than their older counterparts, viewing data exchange as an integral part of doing business. But as previously mentioned, because they are more willing to share data, they also expect a better experience.
- More digital wallets: Customers are becoming more likely to use digital wallets, and as the technology moves into the mainstream, marketers need to consider how they can use them to get closer to their customers.
As for what marketers should do with these five insights, Aimia has five recommendations:
- Personalize your product or service’s value proposition to meet customer expectations.
- Be transparent and responsible about how it uses data.
- Rethink targeting using data.
- Become a better custodian of customer data.
- Shift focus from, “What can we do to our customers?” to “What can we do for our customers?”
Not surprisingly, customers are looking for more simplicity in their lives, so businesses must ensure they employ technology not to complicate or obstruct a customer’s journey, but rather to make it smoother, quicker and more enjoyable, while also keeping data secure, the researchers said.
Otherwise, customers are going to revoke their informed consent.