In today’s digital world there’s an oversaturation of brands vying for consumers’ attention, which means there’s a high benchmark when it comes to customer engagement. Consumers expect to receive the ‘VIP’ treatment in the interactions they have with brands - whether it’s highly personalised recommendations during their online shopping experience, or seamless, tailored customer service when they need to get in touch. These are becoming basic expectations among today’s digital-savvy consumers and non-negotiables for online brands looking to maintain that all-important customer loyalty.

While ‘to personalise or not to personalise’  is a question some brands may be debating - there’s really no question about it. In fact, our latest research revealed that consumers will take decisive action - both good and bad - if their encounters are successfully or unsuccessfully personalised. Over half (51%) of European consumers say they will become repeat buyers after a good personalised experience, while 49% will tell a friend or family member, and a third (33%) will become a member of the brand’s loyalty programme for deals and rewards. However, an impersonal experience can be a deal breaker for many, with European consumers becoming less likely to make a purchase (36%), stopping engagements with the brand entirely (19%), or even buying from a competitor instead (18%).

Needless to say, timely, personalised engagements and establishing that desired “VIP” effect will build the strongest brand-consumer relationships.

What many consumers may not realise, however, is that the fundamental enabler to delivering such personalised and enhanced communications is tied to something they are often reluctant to share with brands: their first-party data. Indeed, brands need customer data to build an accurate and detailed profile of each and every customer – including their preferences, habits, and previous history with a brand. Without it, brands cannot effectively tailor their communications and marketing techniques to the standard consumers expect.

And it’s not just a lack of willingness; consumers are concerned about the sharing, use, and protection of their personal data. In fact, our report found that over a fifth (22%) of European consumers are less comfortable about their personal data being used for personalisation purposes compared to last year.

This conundrum creates a ‘Catch 22’ of personalisation versus privacy, and a disconnect between brands and consumers. Given the background of consumer scepticism with data sharing, how can brands navigate these murky waters to strike the right balance with their personalisation strategies? 

Overcoming the hurdles 

While this seems an impossible scenario, hope is not lost for brands that want to tackle this head on to get the best of both worlds. Whilst brands must recognise the value that personalisation strategies can deliver for customer engagement, the real task to prioritise is building trust with customers and being transparent about how they plan to use their data. On that basis, there is a lot of myth busting work for brands to do to reassure their customers and communicate the mutual gains of data transparency. Businesses can rebuild consumers’ trust in the data-exchange, by taking the following steps:

1. Embrace the transition to first-party data: Over a third (36%) of European consumers feel personalisation has become less targeted over the last 12 months, doing nothing to deliver that desired ‘VIP effect’. With generic or irrelevant ads on the rise, brands must turn to first-party data to ensure the right ads reach the right people. Not only is first-party data consensually shared with businesses by customers, helping to alleviate consumers’ distrust and scepticism, but it also provides the most up-to-date and valuable insights when building personalised experiences. A win-win for brands and consumers alike.
2. Emphasise the value exchange: Data collection isn’t solely beneficial for businesses; there are real gains for consumers too. Make sure to communicate the personalisation and CX benefits, and emphasise the interdependent relationship between data and personalisation as an enabler of that.
3. Be transparent: Part of communicating that value is also being honest with how and why data will be used and disclosing when you are collecting it. That way consumers won’t feel deceived.
4. Prioritise data privacy, protection and ethics:  Having robust strategies, processes, and credentials in place to securely manage and store swathes of customer data is essential.
5. Give consumers autonomy and honour customer preferences: Ensure opting out of data sharing practices is an easily accessible option to provide customers that much-desired control of their information. Customers like to know they’re in the driver’s seat. Respecting their boundaries will ultimately better your reputation as a business, too.
6. Don’t overdo it: Only retrieve the data you truly need. Gathering excess data not only creates unnecessary volumes of data to store, process and interpret, but means there’s more data for businesses to protect too.

The Catch 22 of data sharing and personalisation is a challenge requiring a multi-faceted approach. Brands that respect consumer concerns with data, while also delivering on the promise of personalisation, will be better poised to succeed given the backdrop of the highly competitive marketplace brands are operating in. By navigating this delicate balance, companies can forge stronger, more meaningful relationships with their customers, built on a foundation of trust, transparency, and customer empowerment.