Data conscious consumers: What about them and how to target them?
Data is big news these days. Tech behemoths like Google and Facebook make a lot of money from our data, and people are growing increasingly aware of how valuable their data is to companies of all sizes.
But as data becomes increasingly valuable for companies, consumers are starting to question how much data they are prepared to give away. Many people are becoming uncomfortable with the idea of giving away their personal information.
It’s easy to understand their concerns. Huge data breaches each the headlines on a regular basis. It seems like every week, a large and respected brand loses millions of passwords or credit card details.
As consumers become warier about handing over their data, this poses a challenge for brands. How can you persuade your customers that it’s in their interests to hand over their data? And how can you market to them more effectively as a result?
Focus on the value exchange
If a consumer sees little value in handing over their data, they will be far less likely to do so. As such, your focus should be on trading data for something of value.
This idea has been around for a long time. Every time you sign up for an email list in return for a voucher or free eBook, this is the value exchange at work. Some companies use the concept of gated content whereby the consumer is given access to valuable content on a website in return for their data.
One of the most common ways that companies use this value exchange is to provide a better experience for the consumer in return for their data. In this case, the consumer may provide an app with permission to access their location, and the app then provides them with directions or specific products based on where they are.
In short, value exchange needs to be evident in some form. You need to convince your customers that they will enjoy a better experience or receive something of value in return for their data.
Understand different types of data consciousness
Consumers are all different, and they have different ideas about how their data should be used. Some consumers are perfectly happy to hand over their data, while others hold the opposite view.
Brands need to understand the differences between consumers before they can start marketing to them effectively. Consumers can broadly be separated into three groups:
1. Data unconcerned:These consumers do not care how their data is used and they are happy to hand over more data more readily.
2. Data pragmatists: These consumers are more guarded about their data, but they are willing to give it away if they can see a clear value exchange.
3. Data fundamentalists: These consumers are not willing to give away their data under any circumstances.
According to research from the Data & Marketing Association (DMA), the percentages of the population in each group are roughly as follows:
- Data unconcerned: 25%
- Data pragmatists: 50%
- Data fundamentalists: 25%
Clearly, when it comes to your marketing efforts, you want to be targeting those consumers in the 75% of the population under the ‘Data Unconcerned’ and ‘Data Pragmatists’ groups.
So how should you do this? There are three key principles to focus on.
Personalization has long been an important concept in marketing. But these days, businesses need to go beyond basic information like the consumer’s name and location. The focus should be on hyper-personalization.
Hyper-personalization uses data like browsing behavior, purchasing behavior and real-time data to change the message you send to your customers.
The first thing you will need to do is collect the data. You need quality data to personalize effectively, and that means you need to know the types of people who buy specific products, how much they spend, the types of models they are interested in, which brands they like, and more. Look at Spotify’s annual ‘Wrapped’ campaign, where the company sends users an annual roundup of their yearly listening. At first sight it’s a fun, quirky way to see user data in action. But it also shows exactly which data is being collected.
Context also comes into it. Factors like location, the weather, important events, seasons and real-time pricing can all be used in your messaging.
You could launch a browser abandonment campaign where you target people who were looking at a product but did not make a purchase, perhaps offering them a discount if they buy it now.
In short, the more personalized you can make your messaging, the more effective it will be.
Other than personalization, businesses also need to focus on the convenience of your messaging. The hyper personalized communications need to be delivered through the right channels at the right times.
This means gathering data about the engagement techniques that work best for different types of consumers, and then using these to provide greater convenience for them.
With all this collecting of data, there is a genuine concern that your business will annoy your customers and they will opt out of your communications.
As a result, it is necessary be careful about how data is gathered and how consumers are contacted. Data conscious consumers will have strict preferences about how they want to be communicated with. This preference data is essential to avoid alienating them.
By setting up a preference center where customers are asked how they want to communicate and the types of messages they want to receive. This can be done at the sign-up stage or later if preferred, perhaps by sending an email requesting the information.
Brands must also work to clarify the value of signing up to a service. If you can’t explain why you want their details, you shouldn’t have them. Use the Abercrombie & Fitch app for inspiration. Users who download it are rewarded with points that can add up to substantial discounts, and there’s a clear correlation between performing an action (i.e. registering) and receiving a gift.
Give consumers the option to opt-out of communications as well. Consumers may decide they don’t want your weekly newsletter, but rather than unsubscribing from all your communications, they may want to keep the promotions. Having the option to choose different types of emails they want to receive can be helpful in this case.
By managing customers’ data preferences effectively, businesses can ensure the right messages get to them more often.
Gather data and use it wisely
Marketing is changing all the time. Customers are more data conscious than ever, and this shows no signs of changing. To reach the right people with the right messages at the right time, you need to focus on gathering as much data as possible, without annoying your customers, and understanding your customers’ preferences.
That way, you can continue to reach them with (hyper-) personalizedand marketing messages that generate sales for your company.
Author: Jason Lark