Responsible marketing delivers hard commercial returns by building trust with customers who are more worried than ever about their data and privacy.
It's well established that winning and retaining customer loyalty comprises multiple elements, possibly the most important of which is trust. The 2020 Trust Barometer from Edelman says trust is the make-or-break difference for brands. Hard won and easily lost, trust is now under threat in the face of the events of 2020.
The scale of the problem emerged from research dotdigital undertook among U.S. consumers in April 2021. Less than half (44 percent) said they trusted brands to store their data safely, while 25 percent said they didn’t. In addition, 28 percent said they didn’t feel their data was kept securely and their privacy was compromised when they gave personal data to brands, with a further 25 percent feeling that brands didn’t have the security systems or processes in place to sufficiently protect their data.
Our research reflects a year of COVID during which consumers said they had become more mistrustful of how companies use data (56 percent), while 51 percent said they had become more aware of how their data was used by brands as they had been shopping online more often.
These concerns are a threat to consumer trust in brands, exacerbated by the limitations of many current technologies that were built for a more permissive marketing environment. Brands themselves also have an additional challenge because of recent regulation — updates to the original 2018 Data Protection Act around cookies, Apple’s decision to enable users to opt out of tracking, a similar move by Google to let users take control of ad settings, and the Digital Services and Digital Markets Acts, which will attempt to standardize regulation across the whole EU, which inevitably means defaulting to the rules in the most restrictive country.
Brands therefore have to square a circle between the demands of new regulation that further restricts aspects of online marketing, and the need to make communications more personalized and intimate in order to ensure trust is maintained.
Euromonitor has coined the phrase private personalization to embrace the paradox of people wanting content and communication to be relevant to them and accept that there's a trade-off in sharing private information, and yet they still want their privacy guarded.
In our research, 40 percent said they wouldn’t mind giving up data if it made the online experience more personal, while 39 percent said they didn’t mind as long as there was a value exchange and they got something in return. A further 41 percent said they didn’t mind if brands used data to improve their customer experience/online shopping experience.
Clearly, marketing communications with consumers need careful handling if trust is to be maintained. Our research reveals what can go wrong and the consequences of marketing missteps. Forty-five percent of U.S. consumers unsubscribed from a brand’s mailing list because they received too many marketing messages. Thirty-seven percent of U.S. consumers had unsubscribed from a brand’s mailing list because they had received irrelevant marketing messages from the brand.
How they then act as a result of this directly impacts brands commercially. Nearly three-quarters of U.S. shoppers (72 percent) would be less likely to buy again from a brand which they felt had not been responsible with their data — this rose to 86 percent for consumers over 65, compared to 56 percent of 18–24-year-olds.
Fifty-three percent said they wouldn't return to a brand that had acted irresponsibly with their data in the immediate future, but may consider going back if they liked the product enough. Sixty-five percent would actively discourage family and friends from buying from a brand that had irresponsibly handled their data. And this is all without even talking about fines for breaching regulation; GDPR fines rose by nearly 40 percent between 2020 and 2021, according to research from global law firm DLA Piper. Penalties reached $191.5 million.
Responsible marketing describes a strategy for communications that places the customer at the center of everything a brand does, both in its communications to the wider world but also to each and every customer.
To enable this, brands need data on the behaviors and preferences of each customer rather than statistics on large segments. In this way they can demonstrate that they're acting responsibly while using a more personalized approach to build not just trust but new business, and over time to grow loyalty and lifetime value. Building data and privacy controls also mitigate the high cost of reacquiring customers.
Brands must therefore put data stewardship at the heart of their marketing efforts not only to reassure consumers, but to build the long-term meaningful relationships that drive loyalty.
For more actionable insights on consumer sentiment on data and privacy, download dotdigital’s latest report, “Rise of the responsible marketer” here.
Gavin Laugenie is the head of strategy and insight at dotdigital, an omnichannel marketing automation platform.
Related story: Where Meaningful Customer Data Can Drive Retail ROI
Gavin is an expert in the email marketing industry with over 10 years’ experience. He works with brands to solve complex marketing and technology problems. Leading the problem-solving charge, helping to connect the dots between the needs, wants and desires of the customer and their marketing goals.
He has worked closely with organizations in both the B2B and B2C sectors with experience in the travel, financial and retails sectors in both the UK and US, helping clients to build their email marketing programmes to drive increased customer lifetime value, loyalty and ultimately return on investment. Gavin is often sharing latest trends and discussing key industry topics through various means including public speaking and blogging.