Data is the new paradigm in customer relationships. In fact, companies access and use customer data in more ways than ever before. Targeting customers with online ads. Measuring satisfaction and loyalty. Predicting what customers are most likely to buy next. At the same time, consumers have become more aware of how their information is being used. Data privacy debates continue to dominate the public discourse as governments worldwide roll out new regulations aimed at protecting the data sovereignty of their citizens.
Central to the debate is one core theme: Trust. The latest research suggests that consumers are willing to share more personal data with companies—as long as their information is safe from outside threats and used properly, meaning it’s not shared with or sold to third parties.
A recent Harvard Business Review article looked at how companies currently use customer data, taking a forward-looking view at how companies can use data to actually help customers—while ultimately benefiting the business too. For example, an insurance company that typically uses product-centric algorithms to calculate coverage and premium amounts could use customer data analytics to better understand driving behaviors aimed at improving safety and reducing accidents. “This is the essence of customer-centricity: using data to help people better achieve their own goals, rather than just using it to price or segment or target customers,” according to the article.
Predictive analytics is another way companies can put consumer insights to better use by understanding a customer’s intent, sentiment, and emotion to provide a better experience—in the moment. The HBR article stresses that understanding only what a consumer is “likely” to buy based on behaviors like website activity fails to capitalize on the personalization benefits deeper data analytics can deliver. According to the HBR article, “Companies that leverage data for the consumer’s benefit have a real opportunity to differentiate by targeting not just what we will click, but what is compelling on a deeper level; not just what we are likely to buy, but what is likely to spark joy.”
To help you get there, the article offers up three tips to get started on creating a new level of customer-centric relationships by cultivating customer trust. Take a look:
- Use the data you already have to benefit the customer. The article’s authors suggest going back to data you already have—data you may or may not even be using—looking for opportunities to delight your customers, rather than trying to improve offer conversions.
- Think about the customer across the whole lifecycle. Move beyond a transactional focus when examining ways to use customer data to their benefit. By looking at the entire customer experience—pre-sales and post-sales—companies can unlock more opportunities to deliver customer value along the full customer lifecycle.
- Prepare to refocus your operations. According to the article, as companies become more data-centric, their operations will need to shift from focusing on standard business processes to delivering more tailored experiences for customers. “Data will help with this—giving more real-time and rich insight into each customer that will enable employees to tailor their activities on the fly and deliver greater value,” according to the article.
How’s your company managing digital trust?
If you want to learn more, check out this recent APEX of Innovation post, which includes three questions executives can ask to gauge digital trust at their companies.