In the last few years, there have been some significant shifts in consumers’ and businesses’ attitudes to data collection, with some negative impacts on the levels of trust that consumers have in the brands with which they like to interact.
The signs that customers are less willing to share information about themselves are easy to find. Significant numbers of customers would rather miss out on a deal than offer up a personal email address, and as consumers, we are inherently suspicious of any mention of ‘sharing data with trusted third-parties’.
Companies and brands are aware that they operate in a balance with their customers and prospects. On the one hand, building a personalised customer experience requires information about each user and their preferences. On the other hand, it’s easy to destroy brand loyalty with any number of missteps. These might include:
– asking for information that seems irrelevant to the context,
– using captured data in a heavy-handed way for further marketing efforts,
– sharing or selling user data to third parties,
– losing sensitive customer data in a data breach,
– being non-compliant with data governance regulations that pertain to the brand or the individual customer.
While the last two items on the list are fairly cut-and-dried, the first three are certainly subjective, and each customer will interpret them according to taste: data sharing with other companies may gift one customer with fantastic, related offers from companies they’re delighted to hear from. Yet, for another, data-sharing represents a betrayal of privileged information.
In a recent conversation with Tech Wire Asia, Harshana Ariyaratne, CMO at digital identity and privacy organisation Affinidi, shared some of his insights into online trust and brand loyalty-building.
Data collection over the years
Companies operating online have always collected data from customers, but the methods of doing so have changed. “I went to a brand’s website to buy a bag,” Harshana said. “I didn’t buy from there, but I’m still getting their ads; programmatic ads are everywhere I go on the internet. So for a while, it’s okay, when you have that need, but three weeks, four weeks, six weeks later? It starts to become a bit of a pain. In essence, you’re starting to lose a bit of trust in the brand.”
Plus, there are no stipulations as to how long a company can keep the information it has on an individual. In 20 years of living in Australia, Harshana used a particular telco “for about a year. Last year they had a massive data breach and had to email me to say my customer information had been leaked. […] I haven’t been a customer for 19 years, but they still had my information.”
Small wonder, then, that consumers are less willing to share any data at all – with the effect of making it very difficult for a brand to create any semblance of a personalised experience.
“Another conundrum that we face is that AI is going to be highly useful for us, but it will require data. Where does this data come from? The general consumers who interact with brands and organisations. So that’s why these laws are coming in to try and find a balance between building personalisation and efficiencies in business, and also protecting data privacy,” Harshana said.
The force of law
The increasing number of laws around the world that dictate the terms of data retention exert a negative pressure on the ability to create personalised CX or, depending on your viewpoint, a positive reinforcement of personal privacy. Companies are under significant pressure to protect their data reserves from accidental or malign breaches, with financial and PR costs when they fail.
“Holding data these days, is quite risky. And to be honest, I feel that with the advent of AI and cloud computing, the ability for nefarious individuals to access organisational data is getting higher. So organisations are starting to say, ‘Wait a minute, do I want to hold all of this data? Or should I only hold the data I really need?'”
The loyalty issue
In this environment, creating customer loyalty is fraught with pitfalls, and a formal customer loyalty programme throws the issues Harshana discussed with us into starker relief. Imaginative brands will forge alliances with complementary companies to offer a range of related offers and incentives and present them to specific customer groups. By definition, that involves further dissemination of sensitive customer data more widely, increasing the risk to the individual consumer (privacy) and all the brands taking part (data security and reputation).
In a multi-brand loyalty scheme there’s also the lack of granularity in terms of a consumer’s data-sharing preferences for each of the participating brands. Harshana said, “I think the key point to make to compare what’s happening today versus loyalty programmes in the future, is for the customer to be able to say, I will only share my IP [intellectual property] with the primary provider, but I see a lot of benefit coming from one of its partners. So, I’m going to share a little bit more with them, so that they can offer me better benefits as part of the programme. I think that’s the crux here.”
The answers are the individual’s
If we consider the personalised customer experience to be the reaction of the brand to the individual’s expression of their preferences, then their preferences for data sharing are not only part of that expression, but they also neatly solve the balancing act brands have to perform.
In any interaction, from a single purchase to participating in a multi-brand loyalty scheme, why not give the individual the right to dictate which information they are willing to offer, to whom and for how long? Harshana stated, “This is a new way of doing things. Customers buy into this vision, primarily because of two things: customer loyalty and trust.”
From there, it’s down to the consumer to release more information on a need-to-know basis, with time limits baked in if required. Harshana gave the example of a cash-on-delivery arrangement:
“In essence, I would willingly share my data if I’m getting benefit. For example, in retail, you will need to verify your mailing address if you want a cash on delivery option; in essence, a simple thing. I don’t mind verifying my address because for me, the service brings value. A brand would learn the customer’s address, but only for a set time – enough for the transaction to be fully complete.”
In a multi-brand loyalty scheme, the figurehead brand might be granted the most information from a scheme member, and the secondary brands could be given increasing amounts of information as trust between the consumer and the business grows. By offering more value to the individual as part of the scheme, the consumer would have the proof that contributing more information (like more detail on lifestyle preferences, for example) had value to them. Establishing a basis for trust right from the start of a relationship means companies can build the type of brand loyalty that otherwise would be dangerous guesswork.
Early instantiations of the Affinidi Trust Network are already emerging, popular with a new generation of consumers wary of the implications of sharing too much, too widely. We’ve talked with some of those early adopters in articles passim (here and here).
By placing the decisions in the hands of the individual consumer, brands can create a truly personalised customer experience because the customer is dictating its terms and its boundaries until they have proof of the value of the relationship and trust in the brand.
To find out more about the Affinidi Trust Network, the concept and practice of Verifiable Credentials, and the right platform on which to build true customer loyalty, Harshana suggested the company’s interactive, educational demonstrations.
“We have a programme of Discovery Workshops, completely free. We work through the Affinidi Trust Network in a series of proofs of concept and demos that can run through how to build loyalty in a decentralised, trusted and consented way. We sit with you and try to understand your pain points and how you are thinking about the business and your consumers and your data.”
