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Customer Personalization Faces Trust Crisis

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Will companies be able to provide personalized experiences if the rich customer data they require dries up? Business leaders are caught between skyrocketing customer expectations and — after recent high-profile security breaches — faltering trust.

As Salesforce’s new State of the Connected Customer report reveals, leaders must take swift action to build trust. To retain continued access to customer information, they will need better technology and refined business practices.

If companies are to differentiate themselves through data-driven experiences, they need an ongoing stream of insights into individuals’ real-time behaviors and motivations and the different contexts that make up their day. But, troublingly, many customers have lost faith in companies when it comes to doing the right thing with their data. The research shows that 54 percent of customers don’t believe companies have their best interests in mind. The challenge isn’t that customers don’t want their data used, but that they don’t trust that companies will only use it in ways they’ve accepted or approved.

Customer Expectations Continue to Rise

Today’s customers understand the value of their data. Not only are they protected through an increasing number of initiatives like Europe’s new regulations known as  GDPR, but they also have a high bar for how their data is used and what they expect in return.

The research found that a healthy majority (67 percent) of customers say their standard for “good experiences” with companies is higher than ever. They expect, for instance, that company services will be available to them wherever they are, whenever they want and in whatever situation they are in. If that’s not the case for retailers, for example, they will simply go elsewhere to make purchases.

Against this backdrop, savvy companies are finding that customer experience is becoming a key competitive advantage, in both consumer and business sales. In fact, 80 percent of survey respondents say that the experience a company provides is as important as the products or services they’re actually purchasing. Today’s more connected consumers and business buyers are also less patient and less loyal. Seventy-four percent of business buyers say they’ll even pay more for a great experience.

Earning Trust Is the First Step Toward Meeting Customer Expectations

But before companies can earn the right to personalize, they first need to earn their customers’ trust. Trust is the single most important factor needed to unlock a better customer experience.

The research shows that 62 percent of customers are more afraid of their data being compromised than they were two years ago. About half of customers surveyed say companies do a bad job of protecting their personal information.

Part of this discomfort may stem from the simple fact that many customers feel confused about how companies use their personal data. If companies don’t explain how using customer data will deliver a better experience, or if those experiences aren’t directly relevant to a person, it’s understandable that they may not feel they’re in safe hands. This sense of unease can grow if companies fail to get explicit consent to use customers’ information — or fail to demonstrate their commitment to protecting it.

Customers Will Trade Data for Personalized Experiences

When customers understand how their data use creates a better total experience, they’re more likely to share it. Here’s a stunning fact: 79 percent of customers are willing to share their information with a company if they get personalized product recommendations or contextualized interactions in return. That might include the convenience of personalized shopping experiences, for example, or receiving consistent interactions across digital and real-world channels.

However, despite customers’ hunger for personalized experiences, marketers admit that only about a quarter of their messages evolve from channel to channel in a highly personalized way. That leaves plenty of room to improve.

Balancing Personalization and Privacy: Three Ways to Build Customer Trust

It’s clear that customer experience has become the new competitive battleground. To stand any chance of winning that battle, the first line of defense is earning customer trust. So what practical steps can you take to ensure that? I’d recommend at least three strategies:

Give customers control. Ninety-two percent of customers are more likely to trust companies with their personal information if they get control over what information is collected about them. The GDPR in Europe, for example, is a regulatory approach to giving people more control over their personal data. When people can see what’s being collected and can opt out or opt in, knowing they have full control of their data across touchpoints, they’re more willing to share data.

Make data use transparent. Another 91 percent of customers are more likely to trust companies with their personal information if they are transparent about how that information is used. Companies earn trust by being transparent about how customer information is used and explaining exactly how its use delivers a better experience.

Develop strong privacy policies. Demonstrate that your company takes data privacy seriously and that you have rigorous processes and governance models in place to protect customer data. Strong privacy policies and a commitment to safeguarding data underline the fact that you have customers’ best interests at heart.

For a closer look at this research, see the second edition of the State of the Connected Customer report.

This is the first part of a series exploring the future of customer experience. Vala Afshar is the Chief Digital Evangelist at Salesforce.

 

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