Collaboration is a key to customer value exchange
Partnering with other brands and being willing to learn can make data work harder for both parties
Data protection laws are making it more difficult for companies to collect customer data, and many organisations are taking a hard look at what they are offering customers to entice them to part with their information willingly. Cracking the digital customer value exchange conundrum is shaping up to be one of the big differentiators in a cookie-less world.
A recent survey of 400 global marketing leaders found that 60% of marketers believe collecting first-party customer data with an appropriate balance of customer value exchange is getting tougher.
Roan Mackintosh, MD for Africa at Incubeta, says this echoes the challenge faced by local marketing professionals and South African brands, especially the bigger ones, that still struggle with the concept of how to reward customers for their data or engagement.
“If local companies hope to succeed, there needs to be more creative thinking about how to trade value. If a company is simply giving customers more of what they are already getting, can this really be a value-add?” he asks.
Scratching the surface
Personalisation is one of the main reasons why brands want to collect user data. McKinsey research indicates that “companies that grow faster drive 40% more of their revenue from personalisation than their slower-growing counterparts”. However, while there is growing awareness of personalisation and how important it is, brands are still just scratching the surface of its applications.
“Personalisation is better than it has ever been, and local brands are certainly paying attention to it. The problem, however, is that its execution often remains gimmicky. Having a brand recognise you in its communications or know that you shopped at its store last week can achieve only so much. In most cases personalisation is still used as an overlay to apply generic discounts, or at best, discounts on products I would ordinarily have bought anyway. Brands are still not viewing customers in terms of their full customer lifetime value. While companies are clearly thinking about personalisation, the execution remains superficial,” says Mackintosh.
Beefing up results through collaboration
One way for brands to make their data work harder is through collaborations with like-minded and synergistic brands, he says.
“Brands should be exploring symbiotic activations that pack a bigger punch. When two brands come together, they can leverage off what each has, and, even if the activation is small, the value exchange for their customers could amount to more than they could do in isolation. We often find that the start-up mindset of smaller companies makes them more willing to share and collaborate, while more established brands still have a more territorial approach.”
Mackintosh says brands need to adopt a test-and-learn approach and take a bolder approach.
“Brand affinity is not as pervasive as it used to be, so being overly precious about your brand may not be as relevant. Trying new things could have a far bigger benefit than you think, and you could find a customer value exchange use case that really moves the needle,” he says.
He points out that local brands don’t necessarily need the most expensive tech to tap into the analytics needed for amazing customer value exchange.
“Many companies are sitting on customer insight siloed in various tech platforms that they haven’t even considered leveraging. Understanding what data is available across the enterprise, and then integrating that, could hold the key to unlocking real personalisation opportunities. What’s more, if brands work with an experienced partner, cracking the customer value exchange challenge can become a possibility — and one that will set them up for future success,” he says.
The big take-out: Brands need more creative thinking about how to trade value, including exploring symbiotic activations that pack a bigger punch.
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