Don’t let your customers fade from view
Latest figures indicate that people are becoming less inclined to hand over their personal details in return for benefits such as discounts and samples, challenging marketers to step up their powers of persuasion.
Data may be the magic ingredient that allows marketers to finetune their targeting, but research exclusive to Marketing Week shows that consumers have become significantly less willing to provide their details to brands.
According to the latest Data Tracker, conducted by consultancy fast.MAP and the Direct Marketing Association (DMA), incentives to provide data, such as store cards, discounts, money-off vouchers and free samples, are losing their appeal for increasingly critical consumers.
Data Tracker results for April 2011, compared with that of May 2010 and September 2010, show all these features are losing their attraction, with only free shipping increasing in appeal by just two percentage points to 20% of consumers.
Just 16% of people see store cards as a good incentive for parting with their details, down from 18% in September. Likewise, 24% think so for discounts, down from 28% in May 2010, and free samples, down to 28% from 30% in May.
Even having a clear privacy policy is losing its credibility just 33% of consumers say that this would prompt them to give their details to a brand, compared with 39% in May 2010.
Trusting a brand, however, remains constant. A steady 54% say this would prompt them to give their details across the May, September and April studies. But 18% say that they will not provide any data in any circumstance.
Fast.MAP managing director David Cole says there is a clear trend for shoppers being increasingly unwilling to swap their personal details for benefits of a low perceived value. This creates a problem for marketers who have become used to receiving their data through this value exchange, says DMA executive director Chris Combemale.
“In the new climate, that model is being reversed consumers increasingly expect brands to provide services or information without asking for personal data,” he observes. “Only once that initial engagement has taken place will it perhaps become possible for brands to start a real conversation and build more detailed information.”
Digging further into the data, it’s clear that consumers are willing to give certain key details away if they are clear about the benefit of what they are receiving. So while just 8% would give their phone number to create a social media account, 34% would do so to request a quote for services something that Andrew Dunkerley, marketing director at Be Wiser insurance, attests to (see Frontline, below).
People’s tolerance for marketing emails is also being tested: 47% say they would give an email address to receive a quote from a brand down from 68% in September 2010. Highlighting that people have even become more likely to turn down emails from charities, the survey shows that the number of those willing to give an email address if they have pledged support for a cause has dropped by over half from 40% in September to just 19% now.
“Digital marketing is challenged by these shifting attitudes just as much as direct marketing. Creating an online account to avoid the need for data entry in the future is no longer a persuasive argument half of consumers say they will only do this after several interactions with a site, while 23% say they never create online accounts,” the DMA’s Combemale explains.
Fast.MAP’s Cole concedes that consumers are right to be concerned about sharing their data with brands, particularly online, because as technology advances, the likelihood of personal details being compromised could also increase. But there is also an element of hype involved, he adds, as social media means the story of a consumer experiencing a data problem will be transmitted to more people online than ever.
“While the survey shows that 77% of people have not experienced a data breach, it still means that almost a quarter of respondents have,” he says. “Logic says this is probably going to continue, making consumers more reluctant to share data unless it’s absolutely essential. If this trend continues, what will the figures say in another year’s time?”
Rather than turn to more underhand practices or even give up on data altogether Cole says marketers can overcome this trend by making their activities more relevant to the data they do have. For example, if a direct mail campaign elicits a response of just 2%, marketers can engage at a higher level with that 2%.
With the promise of frequent shopper points holding up as an incentive to provide personal details 21% say this works, remaining constant from September Cole says loyalty programmes could be an option for the more data-challenged brands. “Loyalty programmes are a rich environment because they link with consumers prepared to give that extra bit for brands they trust,” Cole suggests.
“They are a tried-and-tested technique and I can’t see them not working for more brands in the future. The transactional information you get is data in its own right from which you can do a lot of targeting.”
Cole adds that brands can still utilise the web traffic information they get to their websites, such as the pages people browse there and other sites they have visited.
“Marketers can still create relevant communication based on this information, and that might be what persuades people to part with their precious data,” he says.
One piece of positive news for brands is people’s increasing acceptance of providing data to make online transactions 74% of those who buy online say they are willing to provide bank, debit or credit card information, up from 56% in May 2010. This shows that not every avenue of collecting data is closed for marketers. But Cole says that brands will generally need to work hard to find their way round this data “conundrum”. He warns that personal details will only become more difficult to prise away from suspicious consumers, many of whom have been scarred by bad marketing practices and over-communication.
As the DMA’s Combemale puts it, the old data situation is now reversed brands must find a way to use marketing to persuade consumers to give them the information they need, rather than simply having reams of data that they can exploit for marketing.
He says: “The old certainty that individual data would be available, accessible and usable is being eroded by technology and services that put the consumer back in control.”
thefrontline
Andrew Dunkerley
Marketing director, Be Wiser motor insurance
In May, we performed 89,000 quotations for insurance policies, and as the research shows, this is one of the areas where people are willing to give their data. To do the quotations, we need a lot of personal information. If somebody doesn’t want to give us this, we can’t give a quote.
We don’t share our clients’ details with any third parties, which a lot of other brokers in the industry do. The fact we don’t is advertised on our website and our telesales staff tell people this. It might make people feel more comfortable in giving us such data. Personally, I find it embarrassing for companies that have appeared to have passed my details on when I start getting contact from other companies.
For most people, once you’ve obtained your first motor insurance quotation, you know that every year you have to go through it and divulge those details so in our industry people are used to doing that.
As the research shows, we are seeing much more acceptance in paying for things electronically we might get about six cheques a month out of 80,000 transactions.
James O’Connor
Senior brand manager, Hendrick’s gin
We are experiencing the opposite situation to the one outlined in the research.
Over the past year, the size of our global database has almost tripled. We have always sought to create delightfully peculiar experiences, whether it’s unusual cocktails and gift packs or interesting events. The people who enjoy those activities are then happy to share those details to learn more about the brand through our Hendrick’s Curiositorium website.
It’s all about creating a first impression, and you don’t ask for details in the first conversation you have with the customer. We have worked hard to make a good first impression so people want to know more. And it’s not about bribery; it’s about treating the data respectfully. We keep it relevant, so if we are inviting people to an event, we wouldn’t just spam everyone, we would email people who we think could get to that event.
An example is that we recently took the Hendrick’s Horseless Carriage of Curiosity, which is a converted Victorian railway carriage, and put it in the centre of Brighton for the Fringe Festival last month [May]. Lots of people who came along, tried a Hendrick’s and tonic, then provided an email address.
For those who don’t want to share their details, there are still ways of communicating with them, through ’Likes’ on Facebook or through Twitter, for example. We’re pleased that people feel confident in sharing their details with us. It reflects the kind of relationship we’re building with our customers.
Andrew Barton
Head of relationship marketing, Oxfam
When it comes to opting into email marketing, clearly the charity marketplace is different to the commercial sector, where brands are able to give money-off vouchers and the like to help persuade people for their personal information. The main reason people don’t opt in to our emails would be to do with fundraising/ people want to give when they want to and not be asked to do it continually.
The challenge for us is to get people to want to opt in by, for example, showing them the difference their money is making. In the case of a humanitarian crisis, we could say something like “if you give us your email address we can keep you informed with how things are developing in that area using films and slide shows”. People have been quite responsive to that. The principle of having an exchange of value is there, as the research indicates.
We use other tools such as showing examples on our website of what a newsletter looks like so people can see what they are signing up to. It sets expectations for potential supporters, so they don’t think that they are just going to be asked for more money.
It’s not unusual to get only a third of people opting in for communication, as the research suggests, so you need to be able to show the value that they are going to get.
What fundraisers have learned is that if you ask for lots of extra fields of information from people you will see the conversion rate drop off. You need to ask for the minimum amount of information if you want to maximise the conversion rate. Then you can get the supporter on a journey where they are opening your emails. Then when they can see what you’re doing, they might be more willing to give you more details further down the track.
18% …of respondents say they will not provide any data in any circumstance
23% …say they never create online accounts to avoid giving personal details
54% …say trusting a brand would prompt them to give their personal details
