In the current digital landscape, Australian consumer brands face a critical challenge: balancing privacy and personalisation. According to Google[1], 90% of leading marketers say personalisation significantly boosts profitability, while 71% of customers desire personalised experiences. Yet, 76% of customers are frustrated when these expectations aren’t met. This tension is at the heart of a heated privacy vs personalisation debate.
Personalisation, in a broad sense, requires collecting and analysing customer data to tailor experiences. However, this must be undertaken while respecting privacy laws and customer preferences. It’s a delicate balancing act, but the rewards can be substantial: companies that get it right can see up to a 40% increase in revenue from their personalisation efforts, according to a McKinsey study[2].
Walking the privacy-personalisation tightrope
Privacy and personalisation, while seemingly at odds, are deeply interconnected. Personalisation is not just a marketing tool; it involves using engagement touchpoints throughout the customer journey to optimise channels with the right messages such as offers and promotions, both online and offline. This approach caters to customers’ needs and enhances their buying experience.
Understanding how much data customers are willing to share for personalised experiences is crucial. Consumer perception and trust are influencers of this willingness. Navigating this landscape calls for diligence, transparency, and an unwavering focus on customer needs.
The role of transparency
Transparency in data handling is always crucial. It builds trust when brands clearly articulate why they collect data and how it benefits the customer. Customers appreciate knowing what’s happening with their data. According to SmarterHQ’s Privacy and Personalisation report[3], 90% of customers are open to disclosing their behavioural data in exchange for perks that make purchasing easier or cheaper. However, this doesn’t mean customers shouldn’t be informed about the behavioural data they are handing over to brands.
Brands should have a transparent dialogue with their legal teams to understand the implications of privacy laws on their marketing strategies. This transparency should extend to the consumer level, where customers are clearly and concisely informed about how their data is being used. This approach not only increases trust but also boosts retention, loyalty, and customer lifetime value.
Harmonising privacy and personalisation
Aussie brands must adapt to a new landscape where privacy is not just a compliance requirement but a core aspect of customer trust and brand reputation. This adaptation requires a deep understanding of privacy laws, staying informed about the latest regulations, and ensuring that all marketing strategies comply with these laws.
Brands should seek guidance from their partners to explore ways to limit the type of data they require. For example, it is not entirely necessary to store Personal Identifiable Information (PII) in a platform to deliver personalised messages. In fact, some thought leaders in the industry see a future in which PII data will not even be utilised to deliver personalised experiences.
More importantly, brands are realising the importance of agile customer engagement platforms (CEPs). These platforms set standards for privacy and personalisation, helping brands attain the best of both worlds. For example, an agile CEP can allow a retailer to use data a customer has shared to send personalised product recommendations via email while also tailoring in-store promotions based on past purchases.
Achieving the perfect balance involves understanding how much data customers are willing to share for a personalised experience, and more importantly, what it is reasonable to ask for. Ultimately, privacy and personalisation don’t have to be competitors; in fact, they can be considered allies. And when in sync, they can significantly enhance customer engagement and loyalty.
Michael Ricciardone is country manager for Australia & New Zealand at MoEngage.
[1] Econsultancy and Google, Marketing and Measurement Survey