Relationship status: it’s complicated. This is how many brands currently feel about the introduction of GDPR and how it will affect their CRM. Relationships between brands and consumers, just like those between two people, are dynamic and need constant attention to satisfy both parties.
From May 2018, the way many marketers collect data and communicate must drastically change. With this in mind, businesses are inevitably concerned about the current strength of their connections with customers.
Our recent research on brand relationships among 2,500 UK-based consumers pointed out that one in seven people will not share any personal data with brands after GDPR. This is a significant change compared to a previous poll we conducted in 2016, when one in ten customers confirmed they wouldn’t be willing to share their information. If this trend continues, there will be a risk of the proportion stacking up to a fifth of all consumers by 2019. This would shift the relationship status for many brands from ‘it’s complicated’ to ‘single’.
The new formula for happily ever after
Brands need a new formula for successful relationships. I believe this comes down to: reassuring nervous consumers; recognising the customer now calls the shots in the value exchange; making brand communications truly relevant; and reframing the communication so customers understand and act on messages. Below, I explore each of the “four Rs” in more detail.
Reassure nervous consumers
Our survey found 70 per cent of respondents feel they’re not in control of how their data is used. To combat this anxiety, brands must demonstrate transparency from the start e.g. when customers register for email updates or newsletters. Making sure that you’re speaking to them in their own language, and explaining the value exchange after they part with personal information, can make the thought of entering your marketing funnel less daunting.
“Actions speak louder than words” and “first impressions count” might be relationship clichés, but getting off on the right foot will certainly set the tone for a fruitful, long-standing relationship.
Recognise who calls the shots
Most people understand that signing up for marketing communications will result in them regularly receiving information from brands. However, the balance of power has shifted towards customers, who are now more selective in terms of brands they want to engage and share data with. For example, people could receive up to 500 emails around Black Friday and Cyber Monday, but might only choose to engage with the most relevant few.
This “$300m button” story is a prime example of how one simple user experience change increased a $25bn e-commerce brand’s sales by 45 per cent. The web designers recognised customers were deterred from registering because the process was unclear. Simply removing compulsory registration resulted in this huge boost in sign-ups and purchases.
Brands would do well to avoid falling into the short-termist trap of driving sign-ups to hit sales targets, but this isn’t always effective in meaningful relationships and repeat purchase.
Relevance builds effective communications
Banging the relevance drum is no new trick for marketers. In a post-GDPR world, however, using data to pinpoint the right customers with compelling communications will only grow in importance. Our research revealed 70 per cent of respondents like receiving tailored offers based on past purchases, and twice as many people prefer tailored communications to non-tailored.
For instance, using data for geo-targeting might not work as well for high-street stores as it does for local businesses. One obvious example is organically grown communities, such as the rise of artisan bakers and brewers in East London. Brands here are physically close to people, so they can react to data they collect and send tailored offers. The result is a balance between the relevance of brand messaging, personalisation and convenience.
Reframe the communication
Meanwhile, marketers need to reframe their communications to simplify the process of acting on messages for customers. Emailing too frequently, and cramming too much information into one message, tends to hinder response. Communicating a consistent killer message is critical to remaining relevant. Time, as well as manner, can be highly relevant, too. Failure to understand individual customer journeys can leave brands shouting into the void.
Channel knowledge – understanding what the consumer wants and expects in each marketing medium – is also key. For example, above-the-line and digital out of home executions should boost brand awareness, whereas email and direct mail contribute to it, but are best used for calls to action.
Email is still a preferred channel for direct brand communication according to our research, with 67 per cent of customers favouring it over direct mail, social media, text messaging, phone calls or mobile apps. Customers are becoming more protective of their data, but when they want to hear from a brand, they will engage. It’s then a case of understanding them and talking to them at the right time, via the right channel, in the right manner.
The relationship between brands and customers is changing in the light of GDPR, but this presents a huge chance to change CRM for the better. Customers are becoming more anxious about their personal data, so we have the chance to reassure them by being transparent. They call the shots in the value exchange, thus reframing communications and serving them in a relevant and convenient manner is crucial.
It’s a formula will lead to more refined, trusted and meaningful marketing and, potentially, a relationship that remains happy ever after.
By Joshua Hull, Principal Planner, Amaze One
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