Consumer cultural differences when it comes to online customer dataPublished: Tuesday, 28 July 2015 10:11 by Katharine Hulls, VP Marketing
Online shopping is continuing to grow massively, as is the sharing of online customer data – consumers spend more time online than ever, in fact our research showed that 53% of German and 47% of UK consumers go online more than 10 times a week to shop, browse for different products and services or to manage an account they have registered with a brand.
As such, expectations of the online experience are growing. In the second in this four part blog series reviewing research undertaken by Teradata and Celebrus Technologies, which looked at the attitudes towards personalization and data privacy amongst consumers in the UK and Germany, we look at the differences and similarities between the two countries when it comes to the way both sets of consumers react to good and bad personalization.
Getting the balance right
Our research revealed that the vast majority (63%) of consumers across every age group like to receive personalized offers. However, there are clear differences in attitudes across the age groups. Unsurprisingly, it is those under 25 who are more excited by the personalization delivered by brands, with 79% of consumers aged 18–24 finding personalized brand communications helpful. However, as many as 26% of the 65+ age range said that personalized offers make it easier for them to find what they want – proving that regardless of age, personalization has its benefits.
These personalized experiences are working for brands – over two thirds (67%) of consumers said they would positively interact with a brand in response to a good personalized experience and share online customer data. Interestingly, the reasons for enjoying personalization are split pretty evenly across categories; 24% of consumers feel that personalized offers make it quicker and easier to find what they are looking for, while 23% enjoy receiving bespoke offers and/or coupons and 21% of consumers say that product or service recommendations give them new ideas.
The value of these positive interactions is clear, they increase sales. Over a third of consumers would purchase from that brand again and 27% would recommend the brand to friends/ relatives. They improve relationships; consumers are far more willing to engage with the brand following a good personalized experience, with 21% saying they would complete a product review and 15% would engage more readily with brand communications such as email or SMS.
Let’s not forget though that poor personalization can be damaging. Failing to communicate with the customer in the way that appeals most to them, or delivering a poor experience, can be seriously detrimental for brands.
For example, our research has highlighted that UK consumers are far less forgiving when it comes to a poor personalized experience than their German counterparts. 36% of UK adults claim that a bad experience would mean they would not buy from that brand again, 30% would complain to family and friends (very detrimental as ‘word of mouth’ has a significant impact on brands) and around a quarter (24%) would complain directly to the brand. When the same question was asked of German consumers 17% said they would not buy from the brand again, 20% would tell family and friends and just 11% would complain directly.
It is critical that brands get the balance right. With 55% of consumers citing email to be the preferred communication medium it is vital that brands do not abuse this channel - while consumers are happy to receive email it would appear that over-emailing, combined with poor personalization, will not only negatively impact a customer’s views of the brand, but is damaging to future relationships.
Know your customer
The positive and negative implications of personalization both in the UK and Germany are clear and the onus is on organizations to get the right communication to customers. Those that get personalization right can inspire consumers and have a positive impact on customer loyalty. However, attitudes to personalization differ significantly between nationality and it is important for brands to be aware of this, so as to ensure they are marketing to their target audience correctly.
The research also indicates that consumers are particularly concerned about their data being passed over to third parties – just 15% would be comfortable with data being passed on to other brands. This is mainly due to the fact that consumers feel that they will be spammed with irrelevant offers – in fact, 19% of German consumers report that whenever they have shared this kind of information in the past they have been deluged with spam. Brands can combat this by making sure that their data usage and sharing policies are clear to the consumer – if the customer knows what they are signing up to, and they can control their data, trust can be built and with that longstanding relationships.
The business cost of poorly judged and incorrectly directed personal communications is becoming significant. Consumers are becoming increasingly positive when it comes to personalization and brand interaction - due to brands getting better at using past consumer behavior and contextual information to ensure that the interaction is relevant. Consumers are therefore demanding individualization and they expect brands to at least be making a good attempt to treat them correctly. In order to get personalization right, brands need to understand and respond to their customers at an individual level; a broad segmentation approach is no longer sufficient.
For a full copy of the research results please click here to download the eBook: European attitudes towards personalization & privacy: The Consumer View