Data is fast becoming a fundamental currency in brand-consumer relationships, with data being exchanged at almost every consumer touchpoint today. However, the efforts being made by brands to engage consumers on the value of data sharing often do not reflect this importance. All too often, the benefits delivered by sharing data are invisible to all but the savviest consumers – and how the data collected is being used remain a mystery and concern to many of them.
Microsoft’s recently-concluded Consumer Data Value Exchange Study found that while 41 per cent of global consumers consciously share personal information with brands, a larger percentage – 56 per cent – believe that brands collect personal information from them without their explicit consent. This 15 per cent gap in understanding of the brand-consumer data exchange can potentially put brands at risk of losing the trust of consumers over the use of personal data. And despite increasingly high levels of control given to consumers over the availability of their data online, the predominant perception remains that brands set the terms in the data value exchange and reap most of the gains as a result.
This common perception mounts a challenge for brands that rely on the collection and analysis of data to provide high quality products and services in order to compete effectively. If consumers continue to hold on to the perception of a brand-centered data exchange, and resist sharing data as a result, brands will be find it increasingly challenging to understand their consumers and provide targeted products and services that meet their changing needs.
If this is the case, how then can brands tackle the issue of consumer distrust to unlock deeper engagement opportunities with their consumers through the data value exchange?
Here are three key takeaways for marketers to ensure a fair data value exchange:
- Be transparent. Don’t hide from a data conversation with your consumers. Be upfront about the benefits of sharing data and make it clear what consumers gain from the exchange. In the process of doing this, you will correct outdated perceptions of what data is and what advantages sharing it can deliver, gaining the trust of your consumers as a result.
- Respect boundaries. Recognise different consumer groups’ needs and boundaries around data sharing, and craft your appeal to share data appropriately. Understanding the market you are dealing with will also help you determine whether to pitch the benefits of data sharing around the themes of ‘put me in control’, ‘improve me’ or ‘empower me’.
- Focus on consumer benefits and needs. Embed the concept of providing personal value to consumers before negotiating and asking for more data – and don’t be afraid to link the benefits of data sharing to deeper motivations and emotions. In addition, while some of the most successful companies in the world know that providing good value to consumers is critical, the ability of the brand to address deeper emotive needs of their consumers is also crucial to the long-term sustainability of the business. Our Consumer Data Value Exchange Study quantified three emotive needs when it came to benefits expected from sharing data – Order, Achievement and Discovery.
- Order: Easing mundane tasks through seamless integration of digital experiences meets consumer needs for Order and feeling on top of things. In our survey, 70 per cent of global respondents would share search termsfor a service that enabled fewer steps to get things done (e.g. automated services).
- Achievement: Applications that enhance productivity in both professional and personal lives deliver a sense of Achievement through reaching goals and improving individual performance. For example, 82 per cent of global respondents who would share activity data for a service providing suggestions for improvement.
- Discovery: Enriching lives through enhanced suggestions and relevant recommendations encourages a sense of Discovery, and accessing new experiences both online and offline. We found that 79 per cent of global respondents would share their gender for a service that inspires something new based on others like them.
In the longer term, brands that are able to build stronger brand loyalty and enable deeper consumer engagement will be those that succeed in negotiating for a clear and willing data exchange with consumers. And this can be achieved by being transparent, respecting boundaries and focusing on personal benefits and needs for consumers.