While most brands are only beginning to develop personalization capabilities, those that are further along are finding incontrovertible ROI. Given that consumer data powers the ability to create personalized experiences, capturing extensive information about customers is increasingly important.
The first essential “do” for marketers is to respect consumer privacy concerns. Brands walk a fine line in collecting personal data while building trust, with consumers giving mixed signals in assessing the tradeoffs between privacy and enhanced service from brands. Personalization also requires a fine-tuned sense of what type of targeting customers will find “creepy” and what they will embrace. One way to minimize the risks of coming across as creepy is to supplement data gleaned from consumer purchases and other interactions with information provided by consumers themselves.
DO: Make account sign-up quick and easy
DON’T: Fail to leverage implicit sources of data to reduce the consumer’s workload
Account sign-ups present a unique opportunity for data collection, but organizations must walk a thin line. By asking for extensive data, they risk scaring consumers away; on the other hand, this data provides the backbone for CRM programs and other personalization initiatives.
Across categories, brands present an average of 4.9 fields (typically email address, zip code, phone number, birthday, gender) during account sign-up. But some brands studied by L2 require more than 13 data fields to create site accounts; a fifth of Big Box brands require 10 to 12 data fields. Much of this data, and sometimes more, can be captured implicitly during the checkout process by tracking the attributes of products purchased, frequency of purchase, shipping address and so on.
Best in class: In the Sportswear category, New Balance and Foot Locker provide lengthy forms for customers to complete, collecting information like gender, address and athletic activities. By contrast, digital Genius Nike gathers this information implicitly at online checkout, eliminating a potential source of friction for customers.
DO: Incentivize consumers to complete optional data fields
DON’T: Fall short in providing real value in exchange for extra data
Most brands studied by L2 (94 percent ) enable users to offer additional information about themselves from the account environment. Beauty and Sportswear brands lead the way in data capture after a consumer creates an account, providing an average of six additional fields that can be filled in to further customize preferences — generally to get a snapshot of physical characteristics or workout preferences, respectively. BareMinerals, a leader in the explicit data capture space, uses gamification tactics and offers rewards for having a complete profile. Beyond such incentives, brands must communicate a positive use of consumer data by leveraging it to generate substantive value for consumers.
Best in class: L’Oréal Paris, which has invested substantially behind its suite of diagnostic tools, can extract more than 148 unique data points per consumer (hair thickness and eye color, favored lash looks, etc.) via its five unique consultative offerings. In return for her data, the consumer is served up relevant dynamic content and product recommendations. To further motivate completion of the various quizzes and then push consumers further down the purchase funnel, the brand is testing $2-3 category-specific coupons for each “consultations” completed on the site.
DO: Establish mechanisms to collect premium implicit data on an ongoing basis
DON’T: Rely solely on purchase history and the cadence of the purchase cycle for implicit data capture
While consumers may readily provide data during account sign-up or certain other occasions, preferences change over time — but people are unlikely to regularly update their account profiles. Savvy brands are finding ways to monitor how needs and preferences are evolving by building or acquiring robust digital platforms with consumer utility. Brands can thus insert themselves into the daily lives of potential customers while also capturing salient personal data: everything from the distances consumers are running to the foods they are eating. L’Oréal Paris , for instance, tracks the products that consumers are currently interested in through Makeup Genius, its augmented reality app.
Best in class: Thanks to its robust running app, Nike can create textured consumer profiles, including the location, duration, speed, and frequency of users’ runs — far more valuable data than a survey completed at a single point in time. Rival brand Under Armour offers fitness tracking app Record and has acquired a host of digital properties , including MapMyFitness, MyFitnessPal, and Endomondo.
DO: Seek ways to fill gaps in your data
DON’T: Overlook third-party data sources
Marketers may feel paralyzed by their lack of “perfect” consumer data, but there are opportunities to fill in some of these gaps using third-party data sets and thus easily execute on personalization initiatives. Third-party data sources can often unlock new opportunities.
Best in class: People moving to a new home are an important segment for broadcast service providers. Using a data partner, DirecTV identifies consumers who have recently moved or are about to do so, serving up content related to the moving process on the company’s desktop and mobile site. This personalized content has driven a double-digit conversion lift — even though the promoted offer is identical to that offered to non-movers.
DO: Capture customer metrics across channels with a robust loyalty program
DON’T: Stint in guarding against data breaches
Loyalty programs are evolving from a cost center into an invaluable tool for collecting data across marketing touch points and distribution channels while cultivating a direct consumer relationship based on mutual benefit. Amassing deep customer data enables meaningful personalized offers — while also potentially exposing brands to damaging data breaches — which in turn increase consumer loyalty.
Best in class: The North Face boasts a technology-enabled loyalty program that ties together online and offline platforms while taking measures to combat POS data privacy and security issues. VIPeak rewards customers who engage with the brand online, in stores, on mobile, at branded events (including an endurance challenge series) and across social media channels. The program, which acquired an estimated 400,000 members within its first year, has successfully captured 50 percent of all transactions, increasing member repeat purchase rates three-fold and doubling year-over-year retention rates.
For more on how brands are capturing consumer data and leveraging it to personalize experiences, download a copy of L2’s new Personalization report.