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Personalization Plus Privacy: Balancing Elements of Customer Experience

Today, consumers increasingly crave a personalized experience, expecting brands to tailor offerings and service experiences with precision and insight. However, this expectation comes with some tension: consumers also demand unwavering protection of their personal data, even as they ask companies to use that data to personalize.

 

This dual mandate creates challenges for Customer Experience (CX) leaders, who must navigate the thin line between personalization and privacy while fostering continued brand loyalty, trust, and positive experiences.

 

Personalization Over Privacy?

 

In today’s consumer world, personalization is on the rise, and it’s only growing in importance. Research from Zendesk found that 76% of customers expect personalized experiences during their brand interactions, including engagement through their preferred contact methods, account type or status, and product recommendations based on purchase and/or search history. 71% of customers in the same survey, meanwhile, say they expect companies to have internal collaboration or tracking methods so they don’t have to “repeat themselves.”

 

Perhaps most intriguing of all is one more discovery from the Zendesk study: customers aren’t as concerned about privacy as they were a few years ago, especially when it comes to collecting data to personalize their experiences.

 

These statistics show just how important personalization is to today’s customers. They don’t just want it, they expect it, and CX leaders must navigate this new set of expectations in order to attract and retain customers. When companies bring in CX leaders who can navigate these challenges, however, they reap the benefits. McKinsey reports that a positive customer experience yields 20% higher customer-satisfaction rates, a 10 to 15% boost in sales-conversion rates, and an increase in employee engagement of 20 to 30%. They also found that personalization, at scale, can lead to sales increases of 1 to 2% for grocery stores, and even higher for other retailers, while reducing marketing costs by between 10 and 20%.

 

With that being said, McKinsey’s researchers also report that just 23% of customers feel that companies are doing a good job with personalization. Those numbers indicate that CX leaders still have some distance to go before they find the right balance and their desired results.

 

Striking the Right Balance

 

As CX leaders test out different approaches to personalization, customer attitudes about privacy are always on their minds. It can be a challenge to walk that tightrope – especially when customers themselves seem to hold contradictory views. According to data compiled by Statista, approximately 48% of American consumers acknowledged that brands using their data for personalization in marketing did make it easier to find the products and services that interested them the most. At the same time, however, 47% said data collection and personalization feels invasive – nearly the exact same percentage. It’s an intriguing dichotomy that highlights how many customers are of two minds about the use of data for personalization, and it poses a unique challenge for CX leaders to develop ways to manage those attitudes.

 

One answer might lie in greater data protections. Zendesk’s CX Trends Report found that 62% of consumers want more personalized experiences, but just 21% say they “strongly agree” that businesses are doing enough to protect their personal data. Early adoption of data-driven personalization could sometimes feel like the Wild West of CX: with little information out there, businesses could manage data collection and usage at will, without significant pushback from regulatory bodies or customers. Now, there’s much more scrutiny, and companies must reassure customers that their data is safely stored and used.

 

Instead of focusing on collecting a high quantity of demographic data, CX leaders may choose to focus on intent-based and historical data. Information about actions can “feel” less intrusive while providing more concrete insights that drive user behavior and, in turn, drive better results for companies. Emphasize quality over quantity of data. This approach has the added benefit of being more affordable, since CX teams don’t have to waste time and energy on sifting through vast amounts of data just to find the proverbial needle in the haystack.

 

Another effective approach is to incorporate more customer control into the overall customer experience. Give customers more power over their own data: what is shared, what is used, and how it’s used. Opt-in models versus opt-out (and, clear opt-out processes when necessary) convey to customers that you’re putting them in the driver’s seat. Companies might also provide features for customers to do their own personalization – account settings and preferences, or voluntary surveys that come with some kind of incentive. The key is emphasizing to your customers that their experience matters, but so does their privacy.

 

Today’s rapidly-advancing technologies make data collection easier, but regulations and changing attitudes also are putting up more expectations of privacy. Solving that conundrum takes a strong CX vision, agility, and a willingness to keep up with the latest improvements to stay ahead of the curve. The CX Practice at Blue Rock Search can help you find that person for your organization – contact us if your organization is in search of your next transformative CX leader.

 

By Dawn Russell

 

About the Author

As Managing Director and CX Executive Search Practice Leader for Blue Rock, Dawn brings her Social Talent Black Belt skills and deep analytic abilities to bear, developing quality talent pipelines for a variety of diverse industries focused on Customer Experience. Dawn is the only Managing Director at Blue Rock Search that is equally knowledgeable in three of our five specialties, including Customer Experience, Franchise, and Human Resources.

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