The death of the cookie is a distant memory. The final newspaper has been printed. There has been an explosion of digital touchpoints; almost everything is now addressable. The world is more connected than ever as people rely on smart technologies to help monitor and manage their busy schedules.
With this digitisation, consumers are generating a tsunami of data that gives a detailed picture of who they really are, their channel preferences, buying habits, attitudes, and even their emotions. Data allows brands to understand and connect with their customers in ways we couldn’t have imagined ten years ago.
However, in this new landscape, brands have to take greater care to better understand and communicate with customers through first-party data. Brands that have acted irresponsibly are learning the hard way, dwindling into nonexistence due to endless regulatory fines. Those brands that have been able to make sense of this data influx and unlock better experiences for customers are prospering like never before…
As if this was one of Derren Brown’s latest social experiments, ‘you are back in the room’.
In thinking about what the world might look like in 2030, the above might sound overwhelming, but we only need to look back on how much has changed over the last decade to realise it isn’t that far-fetched.
Yet, as someone who has been urging clients to think about prioritising and setting strategic goals to guide the collection of and investment into first-party initiatives for many years, numerous brands still don’t have a plan in place. I’m not alone in this. Boston Consultancy Group recently found that only around 30% of companies are able to create a single customer view, and only 1-2% are using data to deliver a full cross-channel customer experience.
Thankfully, there is still time to course-correct, but the time to act is now. 2030 may seem far off, but it is just around the corner. There are still many unknowns, but the last thing you want is to be left behind.
As companies embark on this journey, there are many factors to consider. A critical yet often overlooked component is the value exchange brands create with their customers. This does not mean sending a generic discount offer via email every month. An authentic value exchange should put the customer at the core, offering something that delivers a meaningful, tangible, and individualised experience. Without this, it doesn’t matter how sound your strategy is, how much you invest, and your tech infrastructure. If your customer doesn’t see the value in sharing their data, you have failed before you began.
So, why will the value exchange be even more critical in the future?
In 2030, the power will be in the hands of the consumer. They will have complete control and choice over the data they give to brands. I envisage users being able to do this centrally within an app on their phone or smart device. In this app, they will have full visibility of their unique digital footprint. They can turn on and off what they decide to share with each brand at the ease of a swipe. The wild-west of brands, tech partners and third parties being able to harvest and use your data without your consent will be a thing of the past.
With the power in the user’s hands, what will get them to swipe right and allow that data to flow freely? There are three things that brands will need to consider now if they are to succeed in the future:
- Brands need to identify what data they want to collect and why. Brands need to be thinking about what data is essential rather than nice to have. To help answer this, ask what data is necessary to achieve business outcomes, not just now but in the long term. There is an abundance of signals brands could be harnessing to benefit themselves and their customers. For example, insurance brand Vitality uses its customer’s biometric health data captured through smartwatches to tailor their services. This allows them to reduce their own risk whilst rewarding their customers with cheaper premiums.
- Provide complete transparency on how the brand intends to use its customers’ personal information. Only 21% of consumers trust established brands to keep their personal information secure. This is a challenge for advertisers, with trust being a critical component in whether a customer decides to share their personal information or not. Brands need to move away from asking for everything under the sun and refrain from giving generic privacy policies. Instead, they must provide absolute clarity and openness on the intended uses of each data point. Not just because it’s the ethical thing to do, but also because it makes complete business sense; Research by Europanel demonstrated that a 1% increase in brand trust was correlated to 3% growth in value.
- Work out what a value exchange means for your individual customer. Just 17% of users surveyed by Econsultancy find it worthwhile ‘most of the time’ to share their data with brands for what they get in return. That is a staggering 83% who do not feel a real tangible value exchange exists. If brands are to be transparent with consumers about what this new influx of data will be used for, they must also help them understand what they are getting back in return. What’s more, it needs to be something that will stand the test of time rather than just a one-off welcome voucher. This approach may have worked previously to get customers through the door, but in this new world, it will be easier than ever for customers to opt-out and even harder to get them back once they are gone.
Exciting times lie ahead for our industry, filled with opportunities and potential risks. Brands are moving closer to the edge of a precipice as they look to understand whether they can meet the expectations of the increasingly data-savvy consumer. Getting it wrong means they risk losing the opportunity to build longer-lasting relationships with their customers. However, those that get it right, that create a modern-day value exchange, one that adapts to the ever-changing needs of today’s consumer and offers benefits over time, will flourish. Which path will you and your brand choose?