Digital technologies have rapidly become a key part of modern life- but the pace of change has left many consumers struggling to adapt. In a new series of articles, Bearing Point has identified five key ‘paradoxes’ to the way in which digital consumers should be handled. In this third article in the series, Sarah-Jayne Williams, Director at consultancy BearingPoint, looks at privacy versus empowerment, and how to target customers without violating their privacy…
In the real world, there’s no such thing as a free lunch. On the internet there is … provided you don’t mind everyone watching you eat.
Part of the reason that the internet has taken off has been the availability of ‘free’ services, supported by targeted advertising or by onward sales of data derived from these services. But many believe that this information harvesting has not been through fully informed consent. Well-publicised leaks of official information, increased security and cyber crime have led to a wider moral panic around identity theft. Conversely there are many innovations that use private data to offer genuine value to consumers. The question is how to innovate new services without crossing the line of consumers’ sensibilities – how to behave appropriately.
Apply Emotional Intelligence to digital customer management
In the domain of psychology, knowing how to behave appropriately with different people in different situations is a key feature of Emotional Intelligence (EI). The challenge then is this: how can a company be emotionally intelligent? How can it gauge customers’, sometimes contradictory, needs correctly and to support an image the customer is comfortable?
The main paradox here is that customers want the benefits of context sensitive communications (like the local offers provided by Vouchercloud) at the same time as not wanting a record of their movements to be stored.
An emotionally intelligent customer management strategy will target customers’ desires while at the same time respecting their privacy preferences to allow them to be in control of how data about them is used.
Humans have simultaneous needs: being able to act, and to keep private
Response to Google’s Street View encapsulates the challenge. An immense, technically brilliant feat; it has attracted bad publicity, attempts at legal action in Germany, government bans in Switzerland and the Czech Republic and fines in France. Reactions have varied, but the negative reaction has centred around privacy.
To answer this, we need psychology. In our day to day lives we have needs of being able to act (our empowerment) and of personal space (our privacy). These norms are a combination of physical and emotional components, and vary according to social and cultural context.
Any interaction we have with the outside world that is inconsistent with our own norms will feel wrong. Imagine for example if you enter a shop you once visited several years ago and the shopkeeper greets you like a long lost friend. You are waiting for a train and a station announcement starts describing your plans for the evening to the platform. A stranger gives you a hug as you enter the park. A long time friend acts like they have never met you before. Strange? Why? Because the scenarios violate our norms.
Such violations can be just as inappropriate in the digital world… a website you’ve never visited before greets you by your first name and asks if you would like to order something for delivery to your home address, which it already knows; while one which you regularly shop at does not recognise your details. As a customer, you may also be perturbed if you recognise that once your data is available online, it can be very hard to delete. In contrast, in the real world you can always avoid that strange, over familiar, shopkeeper.
This is a clear dilemma for companies. The digital world empowers companies to target their customers with a high level of precision. But how can they ensure that their digital customer management approaches do not overstep customers’ comfort zones? A good start to answering this is to understand what people are more concerned about sharing; that which makes them most vulnerable?
A further challenge is that everyone has different norms, and that norms change over time. Regular web users are now used to targeted advertising while a late adopter of email would probably consider the targeting invasive.
Until recently, most internet users were not aware their online behaviour was tracked, and still most do not know quite how much of it is. Times change. Research in the UK from the Information Commissioner’s Office, highlighted that a majority of people express concern about their personal details online, with 96% concerned that organisations do not keep their details secure.
In conclusion, in order to successfully target consumers in a way that does not infringe their psychological norms the following points should be observed:
1. Ensure behaviour when gathering customer data and privacy is appropriate to customer mindsets, for the type of product or service the company provides.
2. Understand target customers’ mindsets and sensitivities in relation to location tracking, cookies and data harvesting, and the mining of social networks.
3. Ensure company behaviour complies with legislation – even in new markets.
4. Watch, and learn from others’ mistakes, and successes.
5. Ensure push notifications based on context (e.g., geo-localization) are only provided to customers who explicitly opt-in.
6. Only gather private information that brings value to end customers. If possible, target customers using generic behavioural rather personalised approaches.
7. Use private information specialists (e.g., Paypal) or work to become a “Trusted go-between” for customers .
8. Consider using a key opinion leaders to normalise new behaviours (think for example, of Stephen Fry and his twitter feed).
This article is part three of a series looking at “Addressing Customer Paradoxes in the Digital World” from BearingPoint Consulting. You can learn more about this research and contact us about it from the BearingPoint website.
For the other NetImperative articles in the series, please follow these links:
Paradox 1: Digital vs. Physical
Paradox 2: Form vs. Function
By Sarah-Jayne Williams