The Balancing Act of CX: Privacy Awareness and Personalization

Yandong Liu

January 15, 2024

The delicate balance between consumer data privacy and personalized marketing is a tightrope all brands have to walk.

We all want special treatment, right? In fact, 71% of consumers expect brands to deliver a marketing experience tailored especially for them. And, in return for a valid value proposition – like increased customization, discount promotion codes, free samples, or early access to products – 90% of consumers are willing to share their personal information. What’s more, 76% say they will use another brand or business if they don’t see value in their experience.

The conundrum is consumers are becoming more privacy-aware and concerned about data collected on them. So while businesses want to keep their customers close to maintain loyalty and offer that intimate experience that keeps them returning, they also don’t want to scare them off by revealing that they know too much about them.

In my experience, the brands that lead with honesty and transparency about the data they collect and why it matters will be the ones that keep customers coming back – and beating the competition.

Why a personalized customer experience is so important

First, let’s discuss why an individualized customer experience is integral to a retail marketing strategy. Consumers expect the same unique experience that brands like Netflix offer them when it comes to ecommerce and online shopping. 80% of consumers are more likely to purchase from a brand that provides customized experiences, and 56% of online shoppers are more likely to return to a website that recommends relevant products, proving the importance of a highly tailored customer experience.

Part of an intimate ecommerce experience can include offering product recommendations based on previous purchases or interests, which can eventually lead to higher sales and increased brand loyalty because the consumer feels like the brand knows them. A custom shopping experience also supports brand differentiation. Not every online brand or business is going to offer that tailored shopping journey, so being able to provide something unique to the customer will help you stand out from the competition.

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Email is out; messaging is in

The most privacy-safe channel for personal brand interaction is SMS. But today, most brands conduct marketing campaigns by sending impersonal blast emails and ads without expecting a response – or being able to receive one – a fruitless one-way exercise. A better alternative is a full commerce experience that is special to each shopper, from start to finish.

That’s why messaging is the perfect channel to provide that end-to-end experience – it’s highly secure, so consumers can feel confident that their privacy needs are being met. It’s also highly personal and asynchronous, and the entire transaction lifecycle – from product discovery to sales to customer support – can be completed in the chat, not being bounced to other websites or apps. 53% of marketers say messaging remains a top three conversion channel, allowing businesses to deliver their message to the right people at the right time. Providing that one-on-one relationship with a consumer through messaging will be critical for brands in 2024 to offer unparalleled two-way marketing campaigns, and increase sales and brand loyalty while still addressing consumers’ privacy preferences.

Leading with honesty and transparency

From the very first customer interaction, brands need to be honest and clear about their data privacy policy.

This means allowing consumers to control how much of their data is being collected, while also being transparent about how their data is being used. However, 92% of organizations admit they need to do more to assure customers about this. Clearly, there’s still much work needed.

Some consumers take control of their own data privacy by “rejecting all cookies” when first entering a website. If they choose to opt out of sharing their data, they need to understand that they are trading off privacy for an exclusive experience. However, we know consumers are willing to share their data with brands and businesses if it means they will receive a more tailored experience – in fact, 66% of consumers want marketing ads that are tailored to their interests. The key is leading with honesty about how their data is being used to set expectations and ensure all customer experience and privacy needs are being met.

Brands need to find alternative ways to reach customers to provide them with a personalized experience while still being aware and respectful of their privacy concerns. Using highly private and secure channels that are still user-friendly and consumable, is an important strategy to consider and will help maintain and grow brand loyalty and customer satisfaction. Ultimately, continuing to find the balance between offering an individual customer experience while educating consumers about their privacy rights will be vital to brand development and the customer experience over the next year.

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