Consumers can put a price tag on their data; What does this mean for marketers?
In a nutshell, it means they have high expectations for value and customer experience from the companies with whom they share their data. In fact, 62% of Canadians expect better experiences with companies who hold their personal data.
We recently released the global findings from the 2016 Aimia Loyalty Lens, a global study produced since 2014. It surveyed more than 15,000 respondents in nine countries to track customer attitudes to brands, opinions on data sharing and privacy, and engagement with technology. In addition to sharing behavioural trends, the study also provides actionable insights to help companies and marketers inform their customer loyalty programs and activities.
From this year’s edition, we discovered five key insights into consumer attitudes and behaviours.
1. The value of data is on the rise
Across all markets, the percentage of consumers who view their data as highly valuable has risen to 41% this year from 31% in 2014. In Canada, that percentage has climbed to 42% from 28% in that period. At the same time, six in 10 consumers expect better experiences with companies who they know hold their data. In fact, more than half (51%) of consumers worldwide get annoyed when companies don’t use what they know about them to offer better products.
2. Consumers do not value all types of data equally
We asked respondents to put a price on different types of data, and the results across all markets showed differences in attributed values that registered over a wide range. Most respondents valued online behaviour and contact information higher than lifestyle and personal information, but they had different views of how much their data is worth in absolute terms. For example, while Canadians valued online data, such as browsing history and purchases, at an average value of $50 CAD, almost one in four (22%) rated it to be worth $5 or less. At the same time, 30% of Canadians expect a more significant return of value on their data, rating it to be worth more than $100. Comparatively, Americans set a median value of $52 CAD and South Korea registered an average of $120.
3. Consumers are sharing more data than ever before
While 71% of consumers agree that “It is impossible to know who knows what about me nowadays,” their willingness to share data has increased by eight per cent since 2015. Additionally, when companies provide context around why they are collecting certain types of data and how it will benefit consumers, they are actually more likely to share highly valued information. For example, prior to receiving context, half (52%) of consumers will share their mobile number; however, after they receive an explanation, this number jumps to 69%.
4. Younger consumers have an enhanced willingness to share
Across all markets, between 47–67% of 18–24 year olds expect to hand over data in order to access certain free services. This difference in attitude was also apparent in their attributing less value to their personal data than other age groups. However, they also have expectations of receiving great value and customer experience in return.
5. Consumers are increasingly accepting digital wallets into their lives
In Canada, the percentage of consumers who are likely to use digital wallets on their mobile devices has increased to 43% in 2016 from 33% in 2014. Across all markets, the top two reasons for using digital wallets include cashless payments (63%) and the ability to store loyalty cards (58%).
So what does this mean for marketers?
Consumers view sharing their data as a cost of doing business and they’re aware of the value their data holds for companies. They expect reciprocal value by way of enhanced experiences. As such, companies need to start paying attention to this savviness, lest they risk consumers turning off the tap of data and taking their business elsewhere.
With that in mind, here are a few things to consider when evaluating whether your company is delivering on customers’ expectations.
Personalize the value proposition to meet customer expectations
If you’re collecting the right type of customer data, you can use it to offer relevant communications and experiences, as well as launch new lifecycle programs. Knowing their previous purchase history or lifestyle information, you can make educated decisions around the types of offers and promotions they’d care about. Otherwise, you risk alienating your customers and leading them to believe that you are not living up to your part of the value exchange. According to research from Aimia regarding consumer attitudes towards poorly targeted communications, consumers are shutting out brands that send them irrelevant messages. In fact, 73% of Canadian consumers will close their accounts, 71% will unfollow brands on social channels and 60% will delete apps. The rise of the deletist consumer has underscored that it is more important than ever for brands to show an understanding of their customers by demonstrating relevancy through personalized communications.
Be transparent and responsible about data
Customers assume that data being collected will be used to enhance their experiences. We found that 45% and 50% of Canadian and worldwide consumers, respectively, get annoyed when companies don’t use their data to offer better experiences. Companies should only ask for information that will be used to that end. It’s important to line up the exact use case for the data element with your ability to really monetize it and add significant value to the consumer, before you push hard to collect it. The repercussions for not thinking that through are clear in this study.
Rethink targeting using data
Although consumers are more willing to share their information, their behaviour and perception of the value exchange differ widely between as well as within markets. Recently, Aimia teamed up with Columbia University to learn what motivates consumers to share their information. The study uncovered four unique groups of consumers, each with their own attitude and behaviours toward data sharing with brands. With this knowledge, Aimia and our clients can tailor strategy and tactics on how to engage.
Become better custodians of customer data
Customer data is an invaluable asset that cannot be taken for granted. The safekeeping of data earns customers’ trust. Here at Aimia, we implement our TACT approach which stands for Transparency, Added value, Control and Trust to foster responsible data management and the ethical use and handling of data, and we encourage other companies to do the same.
Shift focus from “What can we do to our customers?” to “What can we do for our customers?”
Companies are starting to use data to shift from next better offer to next best advice, even if it includes an offer. Additionally, since consumers now interact with companies across various touch points (i.e. online, in-store, on mobile and social media), connecting all these experiences to create a single view of each customer can help companies better understand their needs and respond at each touch point.