Why hyper-personalization demands a fair value exchange
Brands need to respond not only through the creation of tailored deliverables, but through accountability for how they choose to earn and cultivate consumer trust.
Retailers today face an interesting challenge, and competitive opportunity brought on by the growing customer demand for personalized products, recommendations and experiences. To successfully achieve this personalization, the delivery process for brands involves a necessary exchange, one that can be notably problematic if not handled properly.
Many consumers are prepared to take part in this exchange – relinquishing their personal information in order to receive desired commodities (tangible or intangible.) But brands must also take responsibility for negotiating this as a “fair value exchange,” by gaining trust and maintaining customer security, in order to be successful.
How generation plays in
As customer experience professionals studying this increase in demand for hyper-personalization closely, it is clear to us that there is a generational factor at play. A recent Gongos survey of participants across the millennial, Gen X and baby boomer generations found that over half of millennial consumers were willing to share their fingerprints and facial details with retailers if it meant:
- a more convenient experience (55%) percent)
- customized products and services (55 percent)
- real-time promotions (52 percent)
Comparatively, Gen X and baby boomers reported lower numbers in all three of these delivery methods, with baby boomer willingness never exceeding 20 percent.
The opportunity for brands
The openness of consumers to give away highly sensitive personal data indicates a strong desire for personalization and a very powerful opportunity for brands. As consumer expectations for tailored treatment continue to escalate, the increased value of personal data also becomes evident. Possible delivery methods to personalization include products and services, but also experiences and promotions. While the above data offers a fairly balanced representation of the different delivery methods desired by millennial consumers, the growing desire for experience alone (especially compared to their older counterparts) has been well documented.
This vast opportunity for companies today is not something to be taken for granted, given the high risk of compromising consumers’ information, and subsequently their trust. Looking back at massive data breaches like Facebook and Target, it makes sense that consumer confidence has become more guarded in recent years. Brands simultaneously hold the ability to build and destroy their customers’ trust, and it is essential for them to understand this in order to have successful customer relationships. These bonds can require years of positive actions to be cultivated, and sometimes only a single incorrect action occurring in a short time period can harm or neutralize trust.
Need for authenticity
Customer sentiment today (particularly among millennials) highlights the strategic imperative for retailers to authentically deliver personalization to their customers, and in a time-sensitive manner. Maintaining that flow of information will require brands to respond, not only through the creation of tailored deliverables, but through accountability for how they choose to earn and cultivate consumer trust.
It often helps to understand that personalization is not always linear. Correctly pinpointing the forms that provide the most value to consumers is an ongoing process. Brands should also remember that implementing and continually fostering a type of “fair value exchange” with consumers is generally necessary to ensure their survival. If personalization is done effectively and in a trustworthy manner, brands can look forward to long-term positive results such as stronger loyalty, deeper engagement and meaningful growth.