- February 23rd, 2016
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Data Depend-ents: How REI, Harley-Davidson And Starbucks Win Trust With Relevance
The ways in which consumers share their data has expanded dramatically over recent years, thanks to a proliferation of smartphones and the technologies they enable. Yet new Pew Research findings reveal continued demand for limitations on data use. How Starbucks SBUX -0.47%, Harley-Davidson and REI nail the territory between relevant and creepy.
Imagine being in the grocery store. You approach the Tide detergent. Your smartphone buzzes. There’s a coupon, special to you: $1 off Tide.
Are you happy? Chagrined? To many consumers the answer is, “That depends.”
This is the key takeaway of a recent survey by the Pew Research Center that attempts to gauge consumer attitudes about sharing personal data versus maintaining privacy.
“These findings show how people’s decisions are often context-specific and contingent,” the report states. “A phrase that summarizes their attitudes is, ‘It depends.’ ”
Turns out, this ambiguity has been fairly consistent for a number of years. We conducted a similar study in 2012 following the release of my book “The Loyalty Leap,” the results of which showed that consumers were willing to share data in some cases, for certain benefits, yet most did not trust companies with their data.
However, much has changed since then. The ways in which consumers share their personal information has expanded dramatically, thanks to a proliferation of smartphones and the technologies – such as iBeacon tracking – they enable. Shoppers want these expanding options, but they still demand limitations on how their data is collected and used.
For retailers, this expectation gives rise to a disarmingly simple rule: Be relevant, not creepy. This task is achievable – but success hinges on surgical execution.
Hitting A Moving Target
Relevance is not the same thing for all people, however, and therein lies the rub: Retailers could gain a better idea of what is relevant to their shoppers if they had the insights. Some customers, however, are wary of sharing more data because they don’t think it is being used to benefit them.
According to the Pew study, 47 percent of respondents felt it was OK for retailers to track their shopping habits through loyalty programs if that meant getting relevant promotions and discounts. Thirty-two percent found this unacceptable, while 20 percent said, “It depends.”
According to our 2012 research, which was revisited in 2014, similar loyalty-related expectations were prevalent. Sixty-three percent of the 2012 respondents said they would be willing to provide companies more personal information if it meant receiving relevant product and service offers. That figure rose to 67 percent in 2014. In 2012, 61 percent of the respondents said they’d share more personal information in exchange for relevant communications, a figure that rose to 62 percent in 2014.
Yet perplexingly, 78 percent of the respondents to the 2012 survey, and 67 percent to the 2014 survey, said they did not feel they received any benefit whatsoever in return for sharing their personal information.
That the figure improved indicates retailers are getting better at executing their analytics. But one figure remains troubling: In 2012, just 42 percent of consumers said they trusted companies with their personal information. In 2014, that trust figure rose to 48 percent – still far from ideal.
REI, Walgreens And Others Keep It Relevant
The Pew survey gauged consumer sentiment by presenting a few scenarios ranging from retailers tracking shopper activity to employers installing security cameras. Each scenario presented a benefit, to which survey respondents were somewhat exacting.
“The answers depended wholly on the circumstances of the offer, the levels of trust in those collecting and storing the data, and the person’s sense of what the aftermath of data-sharing might look like,” Pew states.
Put another way, retailers are trying to pin down an oscillating opinion that on one day may find a brand relevant and the next, potentially creepy. Remaining on the relevant side of the pendulum takes a nearly pitch-perfect voice, and knowing why a retailer’s customers choose it over others. What daily issues is it resolving?
There are excellent examples to follow. I’ve categorized them as follows:
Be human, and perk-y: Starbucks’ rewards program, My Starbucks, is gaining legendary status for its ability to speak to its customers in a voice so familial it is hard to tell which came first, the customer or the Starbucks. That relaxed communication, along with meaningful benefits such as early peeks at new products, builds trust. Caribou Coffee’s Perks program, meanwhile, sidesteps attempts at nailing the perfect reward by surprising its members with free drinks and other unexpected treats that are doled out randomly.
Partner to capacity: Two heads can be better than one – as long as they think in complementary ways. Retailers can limit the amount of data they need yet better understand their customers when partnering with a company that serves the same segment but in a different capacity. Harley-Davidson’s alignment with Best Western yielded Ride Rewards, a program that provides bikers key benefits toward their long-haul trips, from lodging to bike-washing stations. Everything the program offers addresses an identified need of its members, which are nearing 150,000.
Go beyond the store: One way to show shoppers that a retailer does not gather their data purely to benefit the business is by offering perks that help others. REI’s Member Benefits program charges a fee – $20 – but in return offers members bonuses that are specific to their preferences yet outside the store, such as bike and ski services and discounts on ski lift tickets. Similarly, Walgreens’ Steps With Balance program rewards members for healthy activities, not just spending money.
Technology is consistently changing the public’s perceptions of what is relevant and what is creepy, and thanks to social apps, it can turn a single misstep into a national disaster. It’s better to err on the side of caution when it comes to customer information.
A retailer’s future could depend on it.
This article originally appeared on Forbes.com, where Bryan serves as a retail contributor. You can view the original story here.