Marketers must adopt a different approach to gathering consumer data if they are to gain access to the information they really need
How many of your customers want to receive the marketing communications you send them? What proportion of your prospective customers – people you don’t currently have a relationship with – want to hear what you’ve got to say? Before you read on, note your answers to these questions. Now read on.
When market research agency CCB fast.MAP asked these questions it uncovered some disturbing answers – 63% of consumers would prefer not to be contacted at all by companies they don’t have a relationship with. Among those with existing relationships, 23% would still prefer not to be contacted.
This degree of aversion to marketing communications is bad enough, but it’s compounded by marketers’ complacency. According to CCB fast.MAP’s research, marketers predicted that only 7% of consumers don’t want to be contacted by companies they have relationships with. Likewise, marketers thought that only 37% of consumers would prefer zero “cold” contacts. In other words, marketers’ perception of the scale of the problem is way off the mark, hence CCB fast.Map’s title for its survey: the data perception gap.
Consider a few more findings. Marketers thought that 62% of consumers would be happy to receive information about banking by mail, but only 27% of consumers said they were. Marketers thought that 51% of consumers would be happy to accept information about cars by mail, but only 18% of consumers agreed. For charities, the figures were 51% versus 20%; for financial services generally it was 43% versus 16%; for telecoms (broadband, cable, landline) 42% versus 20%, and so on.
The perception gap remains when it comes to data gathering – 86% of consumers told CCB fast.MAP they always look for the third party opt-out box when providing personal details. Marketers’ predicted that less than 40% of consumers would do so. “Marketers seem to be ignoring the changes advancing technology, the Telephone Preference Service and the opt-out box are making in their industry,” warns David Cole, managing director of CCB fast.MAP. “People are less happy about revealing information and especially of allowing third parties to share it.”
How should marketers address this challenge? Over the past few years the direct industry has retreated into a shell of denial and defensiveness in the face of a media hostile to junk mail and “the surveillance society”. A recent Sunday Telegraph article – “How Big Brother watches your every move” – reported that each week the average UK citizen has 3,254 new pieces of personal information stored about him or her.
The industry’s stock reply to consumer concerns is “we need more data (and more skills in analysing and using this data) to generate more relevant, targeted communications. This would stop putting people’s backs up and add value”.
But this answer is part of the problem, not part of the solution. How can this be? The current dream of better data/ analytics delivering the necessary step-change in relevance is just that, a dream. Given today’s set-up the dream will never come true because, no matter how hard direct marketers try, they will never gain access to the data they really need.
Heresy this may be, but it’s true thanks to two factors, one structural, the other cultural. The structural reason is that the behavioural and transactional data most companies rely on for their data analytics can never deliver a real “single customer view”. Most companies’ interactions and transactions with their customers are simply too infrequent, cover too restricted a range of transactions or relate to too small a slice of the customers’ total category spending (and life) to give anything but a partial, misleading picture.
To fill the holes and “round out” their existing data marketers then go in search of extra data – a quest that catapults them from a rock to a hard place: the intrusive data gathering and data sharing that consumers, the media and regulators are hot under the collar about.
Lurking behind this pillar-to-post dynamic (of too little data on the one hand and excessively intrusive data gathering on the other) lies a set of legacy attitudes and practices that undermine trust, namely the wide- spread industry assumption that consumer data is a corporate rather than a personal asset; metrics that focus 100% on benefit to the marketer (eg response rates) and 0% on benefits to the consumer, and so on. Together, they undermine the critical ingredients of successful win-win relationships – mutual benefit and trust. By the way, this applies just as much to spanking new digital techniques as old fashioned direct mail.
There is a way to cut this Gordian knot, but it requires taking a completely different tack. The only method of ensuring real relevance is to let individuals specify what information they want to receive, when and how, and the only way marketers can gain access to these specifications is if individuals volunteer them. The future of direct marketing doesn’t lie in gathering more and more data “about” consumers behind their backs, but in eliciting information from them upfront.
Google illustrates the transformational power of volunteered information. It seized its pivotal role online on the back of one small piece of volunteered information: the search term. The challenge now is to realise the full potential of volunteered information across the board: information about changing personal circumstances, preferences, priorities, plans, doubts, queries and so on – information with the potential to make every aspect of marketing much more relevant at much lower cost.
But individuals won’t volunteer information if it’s sold on to third parties behind their backs, used to invade their privacy or to spam them. Volunteered information not only requires new infrastructure and processes, it also requires a new information sharing/marketing communications “social contract” based on respect for the individual (as distinct from statistically derived “targeting”); a recognition of personal data as a personal, not corporate, asset; empowerment, giving individuals control over what data is gathered and shared, how, and who it is shared with; direct and immediate benefits for participating in information sharing activities; and transparency about both benefits and processes.
In other words, it requires that consumers be recruited as active and equal partners in the process of commercial exchange rather than disempowered “targets” of companies’ marketing activities. This alternative “social contract” may be a far cry from today’s status quo. But the longer the industry lets denial and complacency stifle experiments with new ways of working, the bigger its problems will get. vv For more on volunteered personal information, visit www.AlanMitchell.biz