Marketing in the value exchange economy: Do brands need to think differently about brand trust?
Consumers don't exactly understand the value of what marketers are giving them in exchange for access to personal data and information, a panel discussion on brand trust concluded.
The Covid-19 crisis has inevitably impacted customer behavior, shaking up the industry and the ways marketers respond - yet there are steps brands can take to earn, maintain, and regain their audience’s trust. The Drum’s associate editor Sonoo Singh moderated a panel discussion during the Digital Transformation Festival with Microsoft Advertising, Kimberly-Clark and iProspect, questioning how marketers need to balance consumers’ desires for a personalized, frictionless experience, with the increasing call to treat their data with dignity.
According to a recent Microsoft and iProspect report ‘In Brands We Trust: The Intersection of Privacy and Trust in the Age of the Empowered Consumer ’ – a global report that includes 16 countries across North America, South America, the European Union, Asia and Africa - only 24% of consumers see the value of personalization as the result of sharing data, and just 15% feel they’re getting good value from granting access to their data.
'In brands we trust. Or do we?' digital panel at Digital Transformation Festival
So how do you resolve the disconnect between a marketer’s intent and a consumer’s expectation?
“Consumer behavior and consumer expectations often don't quite meet,” said Christi Olson, head of evangelism for search at Microsoft, referencing a recent Microsoft survey looking at how consumers perceive privacy, data and security. “Consumers want personalization; they like personalization, but they don't necessarily understand what marketers are doing to deliver it or what they’re doing with the data collected.”
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The disconnect between a marketer’s intent and a consumer’s expectation is stark, so Olson sees a real need for brands to be “more” clear and transparent about their plans for using data, then use that information to deliver personalized experiences. And that is especially critical, she added, as consumer behaviors continue to change during the pandemic, with many customers using more digital technologies to support working from home and handing over their information as a consequence.
Echoing her sentiments, Jeremy Hull, VP innovation at iProspect added that greater trust needs to be established between consumers and marketers. “It's important that we're demonstrating that consumers can trust us with the information that we're collecting.” Of the pandemic, he said: “Trust is more important now than ever for consumers in a world where everything has been up-ended.”
The pandemic has forced people – including marketers – to change their habits so brands need to act more cautiously to continue appealing to consumers, warned Hull. “Any [data] breach in loyalty with a brand right now has the potential to be much more impactful in evolving consumer behaviour.” According to the report, 85% of consumers say their relationship with companies changed following a data breach, and 65% said they stopped doing business with that company altogether.
According to all three panellists, brands should also consider whether they’re being overzealous or over vigorous in the way they’re collecting data, especially when consumer habits are adapting so rapidly.
The survey reveals that digital natives are increasingly understanding the value exchange of data, as millennials see more value in personalization but expect to get more from agreeing to share their personal data than consumers in other age groups. So, are their perceptions of search and privacy changing when it comes to personalization?
“Digital natives understand data much better,” explained Olson. “They understand about giving access to their information and have higher expectations for what they get back. But they are just as concerned as people in the 55+ age bracket.” She calls it “purposeful personalization” where marketers understand what their consumer value and ensuring that it’s reflected in the personalized and tailored experiences, that meet consumer expectations.
But it's not just about ‘consent and collect’, for Josh Blacksmith, senior director- global consumer relationships and engagement at Kimberly-Clark. “It's about what are we going to do with it after we have the data that's truly going to deepen the relationship. AlI too often, I see marketers chasing a number in terms of a first party target, instead of really focusing on the consumer experience they’re trying to drive.” He proposed a value exchange framework that pushes against things like utility and community exclusivity and instead gets marketers to work on deepening relationships beyond economic incentives.
Hull added that marketers need to reframe how they approach consumers when configuring this value exchange. And that marketers should work on being “more relatable rather than focus on the transaction at stake”, otherwise brands could risk alienating people too early in the customer journey.
The panellists agreed that despite avid data collection from businesses, some brands are still failing to improve the consumer experience. Highlighting some of the data from the research, Olson added that 92% of consumers surveyed expressed concern over how their data was used, with 72% revealing that they had stopped using a product or service because the trust between consumer and marketer had been broken.
Delivering on the customer experience imperative
“There's this assumption that all data is great data and more data is always better,” said Hull. “But there's too little time across the industry as a whole to interrogate the data quality or the data source, especially if you're grabbing data from multiple sources and mashing it together.”
The problem with cookie-based data, added Hull, is that it's not iterative; it's additive. So, it may not be completely accurate or factor in the interests or the changing circumstances of the consumers.
He gave one hilarious example where a data source confused his living situation and had him down simultaneously as a renter, homeowner, home buyer and looking to refinance his house all while being single, engaged and married at the same time. “There was no logic in the data curation to allow for transition from one state to another,” said Hull.
Brands need to reprioritise the customer’s experience, according to Blacksmith. “We need to make sure we're delivering value that feels as though we’re enriching the consumer’s lives.”
How can brands create lifetime value opportunity?
He suggests marketers work on getting consumers to understand the value proposition of their brands within their portfolio, rather than the one brand they have bought into. That way it could create a lifetime value opportunity.
And what about brands meeting privacy guidelines like GDPR and CCPA – do they lead customers to trust marketers? The panellists agreed that trust is not simply earned only from data collection transparency, but only by creating products, content and communications that are both meaningful and consistent.
Blacksmith explained that legal regulations may guide marketers to being more open about their intentions, but the changes don’t affect consumers much. “It’s all jargon.”
He said: “It's on us to ensure that we're moving forward; that we're protecting the consumer first, above all else, and making sure that we are transparent in terms of how we're planning to collect and leverage the data.”
Hull agreed: “There’s a lot of misunderstanding about what data privacy means and how data is collected. There's not a lot of clarity among consumers about what their rights are” but businesses can create a new industry-wide baseline especially during the pandemic to regain consumer trust.
Olson concluded with advice for brands – asking marketers to make sure their customers understand why data is needed and what they get in return. If consumers are not able to see the benefits of sharing data, then brands need to rethink what they’re doing so they can deliver purposeful and meaningful personalization in exchange for the data.
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