Sales and marketing have used big data and predicative analytics to drive customer engagements for as long as big data and predicative analytics have been around. And the opportunities become even greater when paired with e-commerce. The combination of the three creates an exciting ability to deliver exactly the right product, to the right customer, at the right time. By knowing what a customer buys, where they go, how they react, what they say, and what their friends and cohort are buying, marketers can excite customers with a product that is likely to delight them.
Or it may creep them out.
When a company appears to knows more about a consumer than the consumer thinks appropriate, the result is distrust, not delight. When a company guesses exactly what someone might want, at the moment they want it, there's a natural tendency to feel spied upon.
This feeling persists even in environments where consumers regularly give away information. In the consumer's mind, it breaks the sense of reciprocity that is at the heart of all social transactions. Consumers understand the quid pro quo of advertising. They expect to see targeted ads on Facebook in return for getting access to Facebook’s features. But when it comes out of the blue from a retailer, it is natural to feel taken advantage of.
Repeat After Me: Transparency, Reciprocity, Permission
It isn't hard to be less creepy. All it takes is transparency, reciprocity and permission.
Be up front about where the information that is driving the sale originated. Let the e-commerce experience extend the typical social proof message of “Other people like you might like this” into “and we know this because you clicked on some ads about it.”
When giving a recommendation, tell the consumer the data's sources. Did some data come from Facebook because they said it was alright to do so on Feb. 12, 2011? Tell them. At least they know where the data was mined.
Give consumers something in order to use their data in the first place. Offering a coupon or some other inducement in order to use (not just acquire) information, not only makes the sale more attractive, but makes it clear that you are giving them something in return for their information. Don’t assume the recommendation is valuable enough. Consumers know that their information is valuable — even using it needs some remuneration.
Always get permission from the consumer to use data that has been collected about them. Always. Each time it is used. It is not enough to ask permission to gather it. Most people won’t remember when they gave that permission and certainly won’t remember what it was going to be used for. Worse yet, is when information comes from a third party or partner. Permission is powerful since it places them in control and in the right frame of mind. It’s also polite. Saying “May we access the information from your previous sales to give you a recommendation?” shows that the seller respects their customers enough to ask before using information they might consider private.
Unfortunately, most big corporations have a hard time embracing these values. It’s not in their corporate DNA. Most companies prefer secrecy for a host of reasons related to intellectual property and legal issues. There is also a tendency to focus on what is legal versus what is right in the eyes of the customer.
None of that matters to consumers. Just because there is a legal right doesn’t make it right to do. An e-commerce system that appears honest and open with a customer about the use of big data — of their data especially — can enhance the relationship with a seller. It’s a not a technical issue. It’s a business choice that companies will have to make if they want to use predicative analytics and big data to sell products to customers.