Customer Experience

By adaptive - March 21st, 2014

Leveraging behavioural marketing can be a power tool in a marketer’s armoury, but privacy concerns are preventing more widespread use of this technique

According to research by Silverpop carried out by Forrester, nearly two-thirds (62%) of marketers are avoiding doing more behaviour-based campaigns because of concerns surrounding privacy. This form of marketing is well understood, with nearly the same number of respondents stating they understood the benefits.

Said Lori Wizdo, principal analyst with Forrester Research: “When prospective customers interact with companies they expect more — more personal, more relevant and more timely communications. Marketers need to constantly and automatically evolve their programs based on how their buyers react to their marketing messages. Behavioural marketing is no longer an option — it’s table stakes.”

Key findings in the study, “Hone Your Competitive Edge with Behavioural Marketing” include:

• Marketing automation correlates with marketing success. Marketing technology is broadly deployed to manage core-marketing processes. But top performers are leveraging technology differently. They are early adopters, with 71% claiming to be “at the forefront when it comes to exploiting marketing technology,” compared with 64% of companies that did not meet plan. And top performers are more likely to be in the process of expanding their use of deployed marketing technologies.
• Both B2B and B2C marketers have accepted multichannel marketing as a best practice. Marketers are familiar with the concepts and practices of multichannel marketing. While only 36% of our survey respondents assessed themselves as mature practitioners of multichannel marketing, a significant 52% were in transition. Only 2% of respondents had no plans to implement multichannel marketing.
• Behavioural marketing is only slightly less mature as a practice. Only 32% of our survey respondents assessed themselves as mature practitioners of behavioural marketing. But 57% reported that they were in transition, and only 4% of respondents had no plan to practice behavioural marketing.
• Both behavioural marketing and multichannel marketing have positive business impact. Mature multichannel marketers in business-to-business (B2B) companies reported that 46% of the sales pipeline was marketing sourced, while mature behavioural marketers reported 42%. Both are far above the average of 35%. We found similar results when we asked business-to-consumer (B2C) marketers what percentage of revenue can be attributed to automated digital programmes. Mature multichannel marketers reported that 49% of the revenue could be attributed to marketing, and mature behavioural marketers reported 47%, compared with the average of 41%.

“Data is the lifeblood of today’s successful marketers,” said Ellen Valentine, product strategist at Silverpop. “Often, marketers find they have a ton of data – whether it’s from an online preference centre or Web browsing information, or even a call centre or a brick and mortar store—but they aren’t properly leveraging it to create highly personalised marketing campaigns. All of these touch points are pieces of behavioural data marketers can use to stand apart from the rest of the marketing clutter, honing in on specific, recent behaviours to deliver the ultimate personalised communication. To create an awesome experience for customers, marketers must treat them as individuals – and leveraging behaviours with automation technology is the way to do this at scale.”

Use of social marketing technology varies greatly among UK marketers. Not surprisingly, companies that identified as technology early adopters led the pack in use of social marketing tools. Both manufacturers and smaller businesses brought up the rear. B2B marketers consistently underestimate just how 'social' business buyers are. Forrester’s research finds that 86% of business buyers engage in social activity for their work; 55% cite online communities and forums as influencers on their decisions.

In addition, TRUSTe state: “The potential impact of this concern over business privacy practices is significant as consumer trust is falling. Just over half of US Internet users (55%, down from 57% in 2013) say they trust businesses with their personal information online. Furthermore, 89% say they avoid companies they do not trust to protect their privacy, the same as in January 2013. 70% said they felt more confident that they knew how to manage their privacy than one year ago, but this can cause consumers to take actions, which negatively impact businesses.”

The TRUSTe report concludes:

• Consumer online privacy concerns remain extremely high with 92% of US internet users worrying about their privacy online compared with 89% in January 2013.
• Consumers are far more concerned about about companies tracking their activities (58%) than the government (38%).
• Consumer trust is falling. 54% of consumers (down from 57% in 2013) say they do not trust businesses with their personal information online.
• Online privacy concerns mean consumers are less likely to click on ads (83%), download apps (80%), enable location tracking (74%).

Steve Wilkinson, managing partner, UK & Ireland client service at EY that surveyed attitudes towards privacy across social networks said: “The rise of digital natives – those that have grown up with an inherent understanding of technology – means that today’s customers understand the dangers of sharing information online and try to protect it by restricting the access private companies have to their personal data.

“What our survey shows is a shift in attitudes and practices towards how consumers treat their personal data, and the access they will allow to their data, both now and in future. Despite well-publicised government missteps towards data privacy, consumers still appear more willing to share personal data with public sector organisations. On the other hand, there is a growing trend to revoke the access that private companies have to such information. As a result, we are likely to see a change in which bodies have the greatest access to customer information in the next five-to-10 years.”

There has certainly been a move by consumers to look closely at the personal information that they are handing to brands and retailers to gain the best deals. Privacy is still a major concern, none more so than across the leading social media networks. Marketers need to tread carefully, but because behavioural marketing can be such a powerful tool, it must remain part of the marketing mix of all corporations. Paying close attention to the security that surrounds the collection and usage of this personal data is the way forward for any marketer that has thus far avoided this form of marketing activity.

[Image Source: Freedigitalphotos.net]