At the intersection of the 3 Ps (with apologies to Philip Kotler) – privacy, preference, and personalization – lies a huge new opportunity for competitive advantage that marketers are only just beginning to realize. And it’s made possible by increasingly robust consent and preference management technology that allows brands to take personalization to the next level.
Privacy and personalization have often been seen as incompatible. But the arrival of consent and preference management solutions gives marketers the opportunity to shift to a privacy and customer-centric approach.
What is consent and preference management?
Consent management is the process of asking people for permission to collect, process and store their data in order to perform marketing activities. When customers sign up or subscribe to something the brand offers – whether to receive notifications, newsletters or offers – they are giving their consent.
Preference management is when customers voluntarily give marketers information about their preferences, to receive better and more personalized communication and experiences. This is several notches above consent-based opt-ins, as it gives the marketer the ability to communicate at the time, frequency, channels, and topics that the customer prefers. This is not the inferred preference that marketers have worked with so far, but the actual stated preference of the customer. This data, offered voluntarily by the customer, is also called zero-party data. Needless to say, this is the strongest type of first-party data a brand could hope for.
Related Article: The Demise of the Cookie and the Rise of First-Party Data
Combine consent and preference to improve the customer experience
Although consent management has been in the spotlight since the GDPR came into force, it has been relegated to the compliance bucket rather than considered a marketing staple. Customer preferences, when incorporated, are generally stand-alone marketing initiatives.
However, consent coupled with preference reveals a whole new set of possibilities for customer experience-focused marketers.
The business case for implementing a transparent consent and preference management system seems strong. While consent management is about compliance, preference management can be about profitability. Together they add a new dimension to the customer experience.
When managing consent and preferences, marketers can expect to see one or more of the following results:
- Build brand trust and credibility.
- Guarantee the respect of data confidentiality.
- Improve marketing effectiveness by sending only the communication most likely to succeed.
- Enable the most effective personalization for exceptional experiences.
- Give the customer control over how the brand communicates with them.
- Engage the customer at the time of churn, offer alternatives to full opt-out, ask for feedback or reasons for churn.
Related article: Will there still be marketing after GDPR?
Who will manage consent and preferences?
So who will ring the consent and preference management chat? Quimby Melton, co-founder and CEO of Confection.io, a provider of privacy-focused data solutions, adds that while compliance is a must, it’s also a cost center. That’s why marketing, which now has a reasonably proven track record of turning data into profit, “stands the best chance of turning a compliance painkiller into a value-added vitamin. That is, marketing , who is also in charge of CX, is in the best position to start doing something meaningful with the release.
Susan Raab, managing partner of the CDP Institute and editor of the weekly newsletter Privacy to Market, also believes that the days of legal and IT client privacy policies are over. Due to increasingly complex new regulations and because customer loyalty is at stake, “businesses – and marketing in particular – need to address this issue with a privacy-by-design approach, otherwise they will constantly have to catch up. their delay and expose themselves to risk”.
CMOs considering taking the lead in strategic investing should consider confidentiality as it relates to the entire organization and aim to gain stakeholder buy-in and input from the start, said Raab. This also involves external stakeholders, first and foremost the customer himself. Until now, companies have tried to protect their “control over the process” and customers try to protect their data as a matter of principle. Melton calls this constant friction between customer and company a “naive war,” and said it’s time to approach it as a win-win situation. This is exactly where and why CMOs should step in and present the business case to give users greater control over their data while giving marketers better insights for decision making.
“This approach will reduce data storage costs, CMS usage costs, and the time teams spend chasing uninterested leads. By giving everyday web users more control over their data, we’ll create a set of more relevant and focused opportunities and better relationships with our clients,” he added.
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Consent and Preference Management System Considerations
Adding a consent and preference management system on top of existing complex marketing processes can be a challenge, even though it is closely tied to marketing and CX goals. Raab highlighted several connecting elements that marketers need to consider as they match their needs with the capabilities of the system. These include workflows for registrations and onboarding; website email; ongoing commitments such as subscriptions; internal and external data sharing and access; unsubscribes; expired customers; and whether users have sufficient options and opportunities to choose and change their preferences at any stage of the interaction.
For smoother deployments, either the existing marketing operations need to be thoroughly oiled before the privacy system (encompassing consent and preference) can be bolted down, or if built from scratch, consent and preference must be part of the strategy. and the stack from the beginning. However, as we move deeper into a privacy-driven reality, Melton warned, recording consent can be just as difficult as recording any other browser-level event (page view, click, etc). “Marketers should consider how effective their consent management solution will be in an increasingly stringent privacy situation. Consider solutions that can collect, store, and distribute data in ways that are not unaffected by client-side disruptions involving cookies, cross-domain scripts, and device IDs.
The vendor also needs a history of following regulations, the ability to educate customers on how changes may impact their business, and the ability to scale and meet future demands. For example, in an omnichannel world, systems also need to work and connect across multiple channels and devices, including web, mobile, CTV, and perhaps even IoT and smart wearables.
Finally, the industry context (geography-specific regulations, budgets and business priorities, current levels of integration, maturity of customer data) all play a role in the decision.
Related Article: Why Marketers Should Be Leaders in Customer Data Privacy
Staying ahead in a world where privacy is paramount
Ultimately, Melton said, CX is caught between three extremely powerful pressure points:
- Top-down pressures from policy makers (e.g. GDPR and compliance and regulatory requirements).
- Upward pressure from customers (“We want more privacy and control over our data”).
- Business interests that require reliable and accessible data (“We need data to do our best”).
With the confluence of consent and preference management, and the maturity of technology to enable and integrate these systems, marketers can finally get ahead of the tension between privacy and personalization. In fact, they can turn it into an opportunity to build better customer relationships and create a competitive advantage. Those who are able to perform a mindset shift to see data privacy from the CX lens will take pole position in this effort.