Data Privacy vs Brand Personalization

Jun 2, 2021

The value of personalizing marketing and e-commerce experiences has been recognized for almost a decade now. However, many brands still find it challenging to collect the data required to build a genuinely personalized CRM system while retaining the trust of their customers.  

That’s because there is a fine line between data privacy and brand personalization. Walking this line requires two things to that brands. The first one is to manage the technical aspects of their CRM system, such as using cookies and feed data into their marketing. Besides, they also need to understand why consumers have concerns about the number of information companies hold. 

In this article, we’ll look at the key concerns that customers have, how these impact the way you can personalize your marketing, and outline some best practices for doing so.

Understanding your customer’s concerns

A customer’s attitude toward data privacy also depends on how you are perceived to use the data. If you bomb customers with poorly personalized marketing emails, they will likely feel uncomfortable sharing further information with you. If, instead, you use the information to create and offer a unique service or feature that has an easily recognizable benefit, expect the going to be easier. 

The privacy paradox 

However, if we take a broader look at the research on privacy concerns, it’s clear that something quite strange is happening. While consumers report that they are uncomfortable sharing their information, they are also increasingly demanding personalized marketing and e-commerce experiences.

In fact, according to recent research, 80% of consumers are more likely to make a purchase when brands offer personalized experiences, and 67% say it’s important for brands to adjust content based on their current context automatically. This personalization is – of course – based on data acquisition, and where the link between these two elements is clear, customers are far more relaxed about sharing their personal information.

In the real estate industry, the property is the most significant investment that most people will make in their lives. Understandably, they are reluctant to share information with real estate marketing agencies. Nevertheless, research suggests that 53.6% of real estate agents find that adding more locally-focused content to their real estate website makes it more appealing. Where they do so, their customers value the added convenience this brings.

In other words, brands face something of a paradox when it comes to personalization. It seems that customers don’t want to share their information but value personalized experiences that this can create.

Take a look at best practices! 

Solving this apparent paradox can be tricky. It relies on understanding why consumers are concerned about sharing their data. It’s important to recognize, in this regard, that most customers recognize the value of personalization and are happy to share data with brands they trust. They are hesitant to do so, and it’s usually because they don’t trust the company involved – 79% of consumers in the US say they are not too or not confident that companies will take responsibility for misused or compromised personal data.

Addressing this concern is an essential step that brands can take to balance data privacy concerns against the value of personalization. There are, however, several other best practices when it comes to doing this.

? Highlight your compliance with data privacy regulation so that customers can have confidence that their data is protected.

? Be transparent about how you use data, but not overwhelming. You should clearly explain how and why you use personal information, but don’t overreact. Research indicates that anxiety increases when people see a «sudden flood of privacy notices» and messages due to GDPR. They don’t feel good about blindly clicking consent pop-ups.

 ? Make sure that you use appropriate tactics in your personalization strategies. Sending personalized shopping recommendations is generally fine, but don’t use a customer’s name just to show that you know it – another report showed that 74% of consumers think that personalized push notifications are invasive, so avoid them.

? Above all, make sure that you use data to effectively target digital ads, rather than just using data to merge customer names into a generic ad. The power of personalization comes from tailoring your offer to your customers, not collecting huge amounts of data on everyone who visits your website.

The bottom line about brand personalization

While aligning your data privacy and personalization systems might seem onerous right now, there is a good argument for getting these issues sorted out sooner rather than later. We will likely see more and more data privacy legislation in the coming years. By thinking these issues through now, you can ensure you are ready not just for the future of data compliance but for the expectations of the next generation of customers. 

Derek Dowell, Real Estate and Digital Marketing Writer, has collaborated with our blog in this post.

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