Businesses succeed in the market when they innovate, excel operationally and understand their customers on an individual, one-on-one level. That differentiator has made its way to the top of chief marketing officers’ (CMO) minds across the globe as the most strategic way to compete. This is especially true today, now that brands have access to more customer data than ever before.
That said, the brand-customer relationship has also become more complex. Between the slowly recovering economy, data breaches and digital disruption, striking the right balance between personalized customer experiences and consumer data protection has become a delicate art that needs to be handled with care. The opportunity is there for businesses, but the challenge is first understanding the consumer culture and applying the most relevant and effective tactics. European consumers can be especially sensitive to how their personal data is being utilized by marketers. By contrast, North American consumers are more accustomed to sharing their personal information with marketers in order to receive more relevant recommendations and tailored communications. So how can marketers gain trust from the more reluctant consumer culture?
The power of personalization
When shopping and service experiences are friendly and a consumer is treated as an individual – as someone the brand knows personally – consumers return and spend more. A brand’s knowledge and application of a consumer’s behaviors and preferences is critical in establishing and nurturing long-term relationships. Businesses have the ability to leverage their own first-party customer data – which is the most reliable and valuable data source – to personalize customer experiences.
Delivering such powerful experiences at every point in time a brand engages with a consumer is a game-changer, and equally critical for brands to retain customers as to acquire them. Whether communications are personalized with profile, historical or situational data, this type of customer experience is what continually sets a brand apart. While personalized experiences have become the norm for consumers in North America, concerns over privacy and business use of customer data continue to be a challenge for consumers in Europe. As a result, CMOs across regions need to understand how to apply appropriate practices that deliver results.
North American versus European consumer culture
Global brands today know that consumer cultures and online shopping behaviors differ greatly between North America and Europe. North American consumers absolutely demand personalized experiences from brands, and are comfortable with receiving tailored messages, recommendations and related products or content based on their personal data. The majority of these consumers have no problem pulling out their smartphones to shop on the go, while watching TV or during lunch hours at work.
Alternatively, only 55 percent of European adults purchase products online. Data protection and privacy concerns are always present, and Europeans prefer to remain anonymous online. Typical American advertising calls-to-action such as “Shop now” or “Buy today” are perceived as too aggressive, thus making them ineffective in the European market. The European consumer seeks education with complete transparency as to what exactly he is viewing or consuming. For instance, the content discovery company Outbrain recently received a ban from the UK’s Advertising Standards Authority because the articles it recommended to the consumer based on his previously read content were not identified as advertisements.
Solving the privacy-personalization paradox
In order for the European market to truly appreciate personalized experiences, the digital marketing and media industry needs to educate consumers on the value and benefits of sharing their online behavior. Brands should begin a new customer relationship by requesting minimal personal information to gain initial trust and credibility. By using that information strategically, marketers can engage the customer with personalized messages that provide valuable information. Once that initial foundation is built, then a brand can start to build a more in-depth customer profile by gaining further customer insights.
This methodical approach reduces the risk that a customer will be put off by overly aggressive or intrusive personal messages. Brands will have a higher success rate with European consumers if they successfully manage initial customer interactions. That seems to be supported by findings from Redshift Research and Salithru, which says that 64 percent of UK shoppers are more likely to open a branded email if it contains recommendations based on previous shopping behaviors, 60 percent if it contains a personalized communication, and 56 percent if it contains special offers based on preferences. Brand experience shows that transparency helps to achieve the delicate balance between personalized offers, content and experiences and respect for customers’ privacy concerns.